The embattled Islander East Pipeline took another punch in the stomach last Wednesday when a federal appellate court in New York affirmed a lower court's decision that blocks the Connecticut-to-Long Island project from going forward.

The U.S. Court of Appeals for the Second Circuit in New York upheld an August 2007 ruling by the U.S. District Court in Bridgeport, CT, which set aside a decision by the secretary of the Department of Commerce that overruled Connecticut's objections to the project (see NGI, Sept. 3, 2007).

U.S. District Judge Stefan R. Underhill said at the time that the commerce secretary had failed to adequately address the impacts that the 45-mile pipeline project would have on Connecticut, and ordered the agency to reconsider its decision. Connecticut argued that the proposed Islander East failed to comply with the state's coastal zone management plan. Islander East appealed the decision in September.

"The [latest] decision places the case back in the hands of the secretary of commerce, who must now justify his predecessor's 2004 override of [the Connecticut Department of Environmental Protection's] denial of the proposed pipeline. Islander East will have to wait for the secretary of commerce's revised decision and for the U.S. District Court to rule before it can appeal to a higher court," said Connecticut Attorney General Richard Blumenthal, who has spearheaded the state's opposition to Islander East.

The court ruling "effectively [pushes] the proposal back to its own one-yard line, forcing a do-over after the secretary of commerce's fumble," he said.

Islander East, which is jointly sponsored by Spectra Energy and KeySpan, was disapponted by by the court ruling, but it does not plan to give up, said spokesman John Sheridan. "We feel the project is still alive. It's a project that's needed."

As for an appeal, the Justice Department on behalf of the Commerce Department can either accept the recommendation of the Second Circuit decision, which remands the case to Commerce, or it can seek rehearing, Sheridan said. "We're going to wait to take direction from the Justice Department."

The $180 million project, if built, initially would deliver 285,000 Dth/d of gas from New Haven, CT, across Long Island Sound to Suffolk County near Yaphank, NY, with a lateral to be constructed to Calverton, NY. Additionally, Algonquin Gas Transmission, a subsidiary of Spectra Energy, would loop about 13.7 miles of existing pipeline in Connecticut and add a new compressor station in Cheshire, CT. As a result of these upgrades in Connecticut, Algonquin would interconnect with Islander East. Approximately 22 miles of the pipeline would be built on the floor of Long Island Sound.

The Islander East proposal has been at the center of a lengthy and labyrinthine legal dispute since it was first approved by the Federal Energy Regulatory Commission in September 2002 (see NGI, Sept. 23, 2002). The state of Connecticut initially interrupted the Islander East project by claiming that it was inconsistent with its Coastal Zone Management Act statute, which gives states the right to block projects that they view as detrimental to their coastal areas. But former Commerce Secretary Donald Evans in May 2004 overturned the state's decision (see NGI, May 10, 2004).

©Copyright 2008 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.