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Over Lawmakers' Objections, Kelliher Plans to Participate in Broadwater LNG Case

March 20, 2006
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After consulting with the agency's ethics official, FERC Chairman Joseph Kelliher has signaled that he will not recuse himself from voting on the proposed Broadwater Energy LLC liquefied natural gas (LNG) import project and associated pipeline facilities, despite calls by three congressional Democrats from New York to do so.

In a letter to Kelliher on March 9, Sens. Charles Schumer and Hillary Clinton, and Rep. Tim Bishop, pointed out that Kelliher had previously worked for the same law firm -- LeBoeuf, Lamb, Greene & MacRae LLP -- that Broadwater Energy and Broadwater Pipeline LLC have retained to represent them before the Federal Energy Regulatory Commission.

While not accusing Kelliher of any impropriety, the lawmakers urged the chairman to recuse himself to "avoid even the appearance of any conflict of interest" while the agency deliberates the fate of the proposed LNG import terminal to be located in Long Island Sound between Connecticut and Long Island, and an associated gas pipeline project.

"My paid employment with the firm lasted little more than two months, from October until December 2000, and I left the firm more than a half-decade ago," Kelliher responded in a letter. None of the cases he worked on at the law firm involved natural gas, noted FERC spokeswoman Tamara Young-Allen.

"Based on my brief employment with LeBoeuf, Lamb, Greene and MacRae, and the length of time that has passed since my brief employment, the designated agency ethics official concluded, 'I do not believe a reasonable person would question your ability to act impartially in performing your duties as [it] relates to the Broadwater matters. More importantly, the [Office of Government Ethics] regulations clearly do not require you to recuse yourself from participation in the Broadwater matters,'" Kelliher said.

Federal ethics laws require new Commissioners to recuse themselves for one year after joining FERC on matters that they were involved in prior to coming to the agency. Given that Kelliher has been at FERC since 2003, the "cooling-off period" would have ended for the chairman in 2004 for all energy cases that he was involved in prior to joining the agency.

"The significance of the impact that Broadwater would have on the safety and environment of the Long Island Sound cannot be understated and the people of Long Island need to know that there is now even a chance that other considerations may be involved in FERC's decision-making processing," Schumer said. "I think recusing himself from any decisions related to Broadwater is the wisest course of action for Chairman Kelliher."

The controversial Broadwater Energy offshore terminal would include a floating storage and regasification unit with an average sendout capacity of 1 Bcf/d and peak sendout of 1.25 Bcf/d. Broadwater Energy, a joint venture of TransCanada Corp. and Shell, would operate the facility, while Shell would own the capacity and supply the LNG. If approved by FERC, the $700 million project is expected to go into service in 2010.

The regasified gas from the proposed project would be transferred to the Iroquois Gas Transmission System in Long Island Sound and delivered to New York and Connecticut markets, according to Broadwater Energy.

In related action, Connecticut Attorney General Richard Blumenthal earlier this month urged FERC to reject the Broadwater LNG project, noting that the risks of serious accidents or terrorist attacks were substantial. "A careful, honest overall evaluation will show that Broadwater is the least safe, most dangerous and damaging proposal, and it should not be approved."

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