FERC Friday issued a favorable final environmental review of Broadwater Energy LLC's controversial liquefied natural gas (LNG) project and associated pipeline to be located in Long Island Sound.

"If the proposed project is found to be consistent with the public interest and is constructed and operated in accordance with Broadwater's proposed mitigation methods and the mitigation measures recommended by [the Federal Energy Regulatiry Commission (FERC)] and [the] Coast Guard, we conclude that it would result in limited adverse environmental impacts," said the staffs of FERC and several cooperating agencies in the final environmental impact statement (FEIS) on the proposed offshore terminal and pipeline facilities [CP06-54].

The primary reasons for the favorable decision were 1) Broadwater's floating LNG storage and regasification unit (FSRU) would be located at least nine miles from the nearest shoreline and would be distant from population centers; 2) the project would result in fewer environmental impacts than any alternatives considered; and 3) the U.S. Coast Guard preliminarily determined that, if specific risk mitigation conditions are implemented, the project waterway would be suitable for use by LNG tankers going to and from the proposed FSRU.

In addition to the Coast Guard, cooperating agencies included the U.S. Army Corps of Engineers, Environmental Protection Agency, the National Oceanographic and Atmospheric Administration's National Marine Fisheries Service and the New York State Department of State.

The proposed Broadwater offshore terminal would include an FSRU with an average sendout capacity of 1 Bcf/d and peak sendout of 1.25 Bcf/d. 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 FSRU, vaporized and then transported in a new 21.7-mile subsea pipeline that would have an offshore connect with the Iroquois Gas Transmission pipeline that extends across Long Island Sound. Broadwater estimates that an average of 118 tankers annually (2 to 3 per week) would be needed to meet the project's planned sendout volume.

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. Currently, New York City, Long Island and Connecticut get about 85% of their natural gas via pipeline from the Gulf of Mexico and Canada, areas where production is expected to decline, the FEIS said. Conversely, gas consumption is projected to increase in the region in the coming years, underscoring the need for LNG imports.

The LNG project has been the target of controversy since its very inception, with most of the opposition coming from Connecticut's congressional delegation, Attorney General Richard Blumenthal and other state officials (see NGI, Jan. 22, 2007, April 30, 2007).

The FEIS was issued a few days after Blumenthal urged New York state regulators to reject the proposed Broadwater project, claiming that a recently proposed alternative would be safer and cause less environmental damage while providing more natural gas.

Blumenthal said the alternative LNG facility -- BlueOcean Energy LNG off the coast of New Jersey -- requires the rejection of the Broadwater plan because it is a safer alternative, according to New York law (see NGI, Dec. 17, 2007).

The attorney general filed comments with the New York Office of General Services Division of Land Utilization, which is considering a key permit for the Broadwater project. He said the New York State Environmental Quality Review Act (SEQRA) mandates consideration of alternatives, including the newly proposed BlueOcean Energy LNG project. SEQRA says the office must reject Broadwater if an alternative is safer with less environmental impact and provides comparable service, Blumenthal maintains.

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