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Transportation Bill Erects Road Block for Weaver's Cove LNG; Opponents File for Rehearing

About seven lines of text added by Rep. Jim McGovern (D-MA) to the recently enacted Transportation Equity Act erects a major road block in front of the proposed Weaver's Cove LNG import terminal in Fall River, MA. The new law makes it illegal for the Brightman Street Bridge, connecting Fall River and Somerset, MA, to be demolished to allow LNG cargo traffic up the Taunton River to the terminal.

President Bush signed the legislation last Wednesday, and two days later the City of Fall River joined the attorneys general of Massachusetts and Rhode Island in seeking rehearing of FERC's approval of the $250 million LNG project, which would provide 800 MMcf/d of peak sendout capacity and 200,000 metric tons of LNG storage in New England (see NGI, July 4). Also filing amicus briefs were the cities of Bristol, Newport and Portsmouth, all in Rhode Island. The Conservation Law Foundation, a large environmental group based in Boston, was expected to separately seek rehearing of the order as well.

The cities, attorneys general and others pursuing an appeal have many arguments explaining why FERC made the wrong decision in approving a project that could have disastrous consequences in the event of a terrorist attack. However, all of those arguments appear to be moot in light of the language in the Transportation Equity Act.

Project sponsor "Amerada Hess has said all along that they need that old bridge to be demolished so they can fit their LNG tankers through, so we have included language in the highway bill preserving that bridge and designating it as a pedestrian walkway, bicycle path and emergency access route," Michael Mershon, press secretary for McGovern, said prior to the signing of the bill last Wednesday.

"The project just can't happen now because the bridge is not coming down," said Eric Poulin, a press aide for Fall River Mayor Edward M. Lambert Jr. "This is not a matter of federal preemption."

The new law barring the destruction of the bridge is a "fatal flaw" for the project, he told NGI.

Weaver's Cove Energy, the joint venture of Amerada Hess and Poten Partners that is planning the terminal, issued a statement saying the language in the new law is "inconsistent with the original justification for the new Brightman Street Bridge.

"It certainly appears to be at odds with the permits issued for the new bridge, which require the demolition of the old bridge to ensure the safety of shipping traffic in the Taunton River."

Weaver's Cove Energy spokesman Jim Grasso said permits previously issued to the Massachusetts Highway Department require the old rusty drawbridge to be taken down because it's a safety hazard.

"The Coast Guard and the Army Corps of Engineers have made a determination that the span between the piers is just not wide enough for today's shipping traffic, excluding LNG cargoes," said Grasso. "They have made the determination that those piers jeopardize the safety of existing shipping traffic on the Taunton River." He said it is unclear at this point how the two conflicting decisions will be reconciled.

"We are disappointed to learn that this language was slipped in through the back door in an effort to stop the LNG project," Weaver's Cove Energy said in its statement. "We are evaluating all options, legal, political or otherwise, that are available to us, and we will continue to pursue development of the Weaver's Cove project."

If the company is somehow able to overcome this large new obstacle to its project, however, opponents believe they still have a solid case for rehearing. Fall River hired three Washington, DC, lawyers, formerly with Swidler & Berlin, to handle its case. They are Edward Berlin, Lester Hyman and Robert Taylor.

In an interview with NGI, Berlin said he believes they have a pretty good case on why this decision should be overturned. One of the most egregious errors, he said was the Commission's decision to exclude expert testimony on LNG cargo safety. FERC made a big mistake in allowing a dangerous project to go forward without even knowing many of the facts about how safety will be assured, he said.

"There are lots of things that are yet unknown about this project," said Berlin. "We don't know whether a security plan can be developed for the safe transport of LNG carriers up these very narrow and heavily congested waterways. We don't yet know whether or not an evacuation and emergency response plan can satisfactorily be put together. We don't know a whole host of answers to a lot of environmental issues: for example where the spoils from 2.5 MMcf of dredging materials will be placed.

"In our judgment the Commission simply cannot make the public interest determination that's required of Section 3 of the Natural Gas Act with all of that information unknown."

Berlin said FERC simply ignored experts, including former Antiterrorism Advisor Richard Clarke and all the local safety officials in the region, regarding the potential for a terrorist attack and the impact it would have.

"The critical issue is can terrorist attacks be prevented and if they cannot be prevented can you accurately protect the health and safety of the contiguous population," said Berlin. "Remember this is the first time post 9-11 where we have ever considered putting an LNG facility in the midst of a populated downtown area. And it clearly is the first time -- since this is not even the case with Distrigas at the Everett, MA, facility, where there would be a need for tankers to traverse 21 miles of inland water ways in very close proximity to densely populated areas."

Another fatal error FERC made when it approved the project in June, he said, was its decision to defer critical determinations on safety to other agencies, such as the Department of Transportation and the U.S. Coast Guard. On the same day in the KeySpan LNG case, the Commission took the opposite view and determined that KeySpan, even though it was entitled to grand fathering under the DOT's safety regulations, nevertheless did not satisfy FERC's public interest standard.

But all these arguments may be unnecessary, Berlin noted, in light of the new transportation law that preserves the Brightman Street Bridge. "With the Brightman Street Bridge in place, it is our understanding that it is not possible to get tankers to the Weaver's Cove site," he said. "We are asking the Commission in light of that to in effect have almost in the nature of a show-cause proceeding, to ask Weaver's Cove why the application should not be dismissed as moot.

"Quite frankly it would be most unfortunate if the Commission has to grapple with [our rehearing request] or worse yet, we have to go to court to challenge the Commission... if in fact this project isn't going anywhere."

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