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New York Governor, Zoning Officials Oppose Broadwater LNG

New York Gov. David Paterson said Thursday that he opposes construction of Broadwater Energy LLC's controversial floating liquefied natural gas (LNG) project and associated pipeline in the middle of Long Island Sound, saying "privatizing open water would be fundamentally wrong," and issuing an executive order to establish a planning board to find alternatives.

"One of my goals as governor is to protect Long Island Sound by preserving it as a valuable estuary, an economic engine for the region and a key component to making Long Island's quality of life one of the best in the country," Paterson said. "Broadwater does not pass that test. Shame on us if we can't develop a responsible energy policy without sacrificing one of our greatest natural and economic resources."

Paterson said he had several concerns with the Broadwater proposal, including possible disruption of commercial and recreational fishing and the lack of any guarantee of low-cost gas for Long Island. The project would mark "the first time in the history of Long Island Sound that a section of open water this size was handed over to a private company to the exclusion of the public," Paterson said. "Privatizing open water would be fundamentally wrong and serve as a dangerous precedent for industrializing a body of water that people have spent years and millions of dollars trying to clean up."

Paterson said alternatives to construction of an LNG facility in the Sound exist. He said he will begin aggressively pursuing increased gas pipeline capacity to Long Island and the downstate region, and will examine alternative natural gas proposals, including LNG. In an effort to develop comprehensive alternatives, the governor said he has issued an executive order to establish a state energy planning board charged with preparing a state energy plan and has directed the state's two major power authorities to aggressively pursue energy conservation. Paterson also announced that the Long Island Power Authority (LIPA) will be issuing a request for proposals for a major source of solar power for Long Island.

LIPA CEO Kevin S. Law applauded Paterson's opposition to the LNG facility, saying the governor "has wisely decided that the potential risks associated with the Broadwater project are too great for the Long Island Sound. The Sound, an estuary of national significance that generates billions of dollars annually for the region, is simply too precious a resource to jeopardize...I will do everything in my power to help him find more environmentally prudent solutions to the energy issues that challenge us on Long Island and throughout the state."

Broadwater Energy received a second piece of bad news from the Empire state Thursday when the New York State Department of State (NYSDOS) announced a negative consistency determination in Broadwater's Coastal Zone Management Act application, finding the project is not consistent with the state's coastal zone policies.

"We are disappointed and concerned with the NYSDOS' decision," said Broadwater Energy regional project director John Hritcko. "We specifically designed this project to be consistent with the state's coastal management policies and offered a number of additional commitments that would further enhance the state's coastal resources.

"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," Hritcko said.

Paterson's announcement came one week after Connecticut's Gov. M. Jodi Rell and Attorney General Richard Blumenthal said they had asked the Federal Energy Regulatory Commission (FERC) to rehear and reconsider its decision last month approving the Broadwater project (see NGI, April 7). Blumenthal said he expects FERC to deny the state's request to fix what he says are "fatal flaws" in the agency's decision, and once it does, the state will file an appeal in the U.S. Court of Appeals.

When Broadwater Energy filed its application with FERC in February 2006 to build the LNG terminal project approximately nine miles off the shore of Long Island, NY, and 10 miles from Connecticut, it immediately drew widespread calls for federal regulators to reject the project (see NGI, Feb. 6, 2006). The proposed Broadwater offshore terminal, which received an environmental nod in January, would have an average sendout capacity of 1 Bcf/d and peak sendout of 1.25 Bcf/d (see NGI, Jan. 14). Broadwater Energy, a partnership of Shell Oil and TransCanada Corp., would operate the facility, while Shell would own the capacity and supply the LNG. The project, which is targeted for service in December 2010, would cost approximately $700 million to build.

The LNG would be delivered by tankers, temporarily stored on the floating LNG facility, vaporized and then transported in a new 21.7-mile subsea pipeline that would have an offshore connection with the Iroquois Gas Transmission pipeline that extends across Long Island Sound. Broadwater estimates that an average of 118 tankers annually (two to three per week) would be needed to meet the project's planned sendout volume. The tankers would enter Long Island Sound from the Atlantic at the eastern end of the sound and travel down the middle to the terminal, away from Long Island and Connecticut harbors and not approaching the New York harbor.

Broadwater estimates that approximately half of the natural gas sendout from the offshore LNG terminal would be delivered to New York City, about 25-30% to Long Island and the remaining 20-25% to Connecticut.

Bowing in part to pressure from Rell, Blumenthal and other state officials, FERC in March imposed more than 80 environmental, security and safety conditions in its order approving the Broadwater LNG project (see NGI, March 24). The Commission's approval came a week after a state task force issued a report that Rell said was a "scathing indictment of FERC's single-minded focus on approving the Broadwater platform no matter what the evidence shows" (see NGI, March 17).

Also last week, four senators whose states have been proposed as sites for controversial LNG projects -- including presidential hopeful Hillary Clinton (D-NY), Joseph Lieberman (I-CT) and Chris Dodd (D-CT) -- introduced legislation to repeal a provision in the Energy Policy Act of 2005 (EPAct) that gave FERC exclusive authority to site onshore LNG terminals (see related story). According to Dodd, "giving FERC the authority to review and approve new locations for LNG facilities was ill-advised," and in approving Broadwater, FERC "[ignored] both the valid safety and ecological concerns as well as the protests of countless concerned citizens from both New York and Connecticut."

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