Three weeks after winning Federal Energy Regulatory Commission approval, a large floating liquefied natural gas terminal and regasification facility proposed for construction in Long Island Sound was rejected by New York’s state government.
Sec. of State Lorraine A. Cortes-Vazquez said on Apr. 10 that the Broadwater LNG project, a joint venture of TransCanada Corp. and Shell US Gas & Power Co., is not consistent with six policies under New York’s coastal zone management plan. The installation aims to deliver up to 1.25 bcfd of gas. FERC approved the project on Mar. 20.
Gov. David A. Paterson said that his concerns regarding the LNG project include its size, potential disruption of commercial and recreational fishing, and alleged failure to guarantee low-cost gas to Long Island consumers.
He reactivated the state’s energy planning board after 5 years to prepare a comprehensive strategy that would examine renewable technologies but not rule out LNG or other traditional sources. Paterson, who chaired the state’s renewable energy task force when he was lieutenant governor, said that Broadwater might not be needed.
‘The best option’
In response, John Hritcko, Broadwater senior vice-president and the project’s director, said, “We continue to believe that the Broadwater project, as proposed, is the best option for New York State to meet its growing demand for clean, affordable, reliable natural gas, and does so with no near-shore or onshore impacts.” Sponsors will review specific aspects of the state’s decision before deciding on their next steps.
At first glance, this looks like an impasse. But the federal LNG project permitting process lets Broadwater’s sponsors ask US Commerce Sec. Carlos Gutierrez if New York’s action actually follows its coastal plan. The state also has proposed two alternative sites in the Atlantic Ocean on the other side of Long Island.
Bill Cooper, president of the Center for Liquefied Natural Gas in Washington, said that Paterson’s idea of having an energy task force develop a comprehensive strategy for New York is hardly new. “People in the Northeast agree they need more natural gas. The question still is where to put the facilities,” he told me.
‘Certainly, there’s demand’
Markets determine the need for projects, while the federal and state governments protect the environment and surrounding communities, he said. “Certainly, there’s demand for the gas Broadwater would provide. You have only to look at the New York city-gate spot prices through each winter to see this.”
FERC’s Mar. 20 approval of the Broadwater project does not necessarily mean it will go ahead exactly as proposed, he added. The decision provided a working document with more than 80 conditions which developers will have to meet before the federal energy regulator issues a construction permit. “The important point is that the process apparently is moving forward. And yes, developers of other LNG projects are watching closely as it does,” Cooper said.