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Connecticut Officials Seek Broadwater Rehearing

April 7, 2008
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Connecticut is asking FERC to rehear and reconsider its decision last month approving Broadwater Energy LLC's controversial floating liquefied natural gas (LNG) project and associated pipeline to be located in Long Island Sound, Gov. M. Jodi Rell and Attorney General Richard Blumenthal said Thursday.

Blumenthal said he expects the Federal Energy Regulatory Commission (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.

"We are fully prepared to take whatever steps are necessary to ensure this environmental injustice never comes to be," Rell noted. "If [our] request is met with indifference, as has been FERC's response to all of our previous requests on Broadwater, we will move on to the next venue -- a federal courtroom," she said.

"On the brink of a full-scale legal war, we're urging FERC to correct itself and sink Broadwater before the courts order it," Blumenthal warned. "My office will fight all the way to the U.S. Supreme Court if necessary to compel FERC to follow the law."

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). Rell called the decision "nothing short of a disgrace."

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). The project would be located approximately nine miles off the shore of Long Island, NY, and 10 miles from Connecticut.

In issuing the decision, FERC Chairman Joseph Kelliher expressed regret that the Broadwater proceeding had become so controversial. "I respect public opinion, and we have gone to great lengths to respond to the legitimate concerns raised by the public. Doing so has been made more difficult by the attitude of some public officials in the region, who have chosen to exploit and inflame public fears. These public officials have done a great disservice to the citizens in the region," he said.

"There have also been charges that [the] FERC environmental and safety review has been inadequate. Those charges are manifestly false," Kelliher said.

FERC is "first and foremost a safety agency," but "we are not unmindful of the need for additional supplies in the Northeast," particularly in the areas -- Long Island, New York City and Connecticut -- that would be served by the Broadwater terminal, he noted. Absent greater natural gas supplies, consumers in the Northeast will face substantially higher gas prices, according to Kelliher.

Broadwater Energy filed its application with FERC in February 2006, and immediately it drew widespread calls for federal regulators to reject the LNG terminal project (see NGI, Feb. 6, 2006). FERC staff in March pointed out that the Broadwater terminal would not be the first commercial project to operate in Long Island Sound. The shorelines include a number of industrial and commercial areas, some of which have been operating for decades; and an estimated 4,000 to 7,000 commercial vessels transit the sound annually, staff reported. In addition, KeySpan's Northport and ConocoPhillips' platforms have been operating there for more than 30 years.

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. 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 wane. Conversely, gas consumption is projected to increase in the Northeast region in the coming years, underscoring the need for LNG import supplies.

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