The Long Island Association (LIA), whose membership includes more than 5,000 New York businesses, labor unions, academic institutions and nonprofits, has thrown its conditional support behind the controversial deepwater liquefied natural gas (LNG) terminal proposed for Long Island Sound by Broadwater Energy LLC.

The proposed 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. The Federal Energy Regulatory Commission (FERC) last year issued Broadwater a favorable draft environmental impact statement, concluding the proposed $700 million facility would not cause major environmental impacts (see Daily GPI, Nov. 20, 2006).

However, the project has been mired in controversy. In February, Sen. Hillary Clinton (D-NY) sent a letter to FERC asking the agency to reject the proposal (see Daily GPI, Feb. 9). And in January, the entire Connecticut congressional delegation expressed its "strong and united opposition" to the project in a letter to FERC (see Daily GPI, Jan. 17).

However, the LIA stated, "It is clear that for its long-term economic health Long Island will need new energy sources and supplies for power generation as well as growing residential, business and institutional uses. While Long Island should put greater emphasis on conservation and the use of alternative and renewable sources of energy, it is not likely that the region's energy needs can be satisfied by those methods alone." Because "it is likely that the replacement or re-powering of the region's aging electric generating plants likely will require additional natural gas...Long Island's reliance on natural gas will increase."

As a practical matter, noted the LIA, "our region needs more LNG. The only way to transport natural gas to Long Island from more distant global sources, where it is in plentiful supply, is in LNG tanker ships." Also, "a persuasive study" conducted by the Long Island Power Authority (LIPA) indicated a $10 billion direct economic benefit to New York City and the Long Island area rate- and taxpayers over an initial 10-year period. "That would have a significant positive effect on the region's economy."

In its conditional support, LIA said Broadwater has to contract with LIPA to supply gas at a "significantly" discounted price. "That will produce savings on electric rates for all Long Island homeowners and businesses," the LIA said. "In addition, Broadwater must establish and maintain an Environmental Benefit Fund, a Commercial Fisherman's Fund, a Community Benefits Fund, a Safety and Security Fund, and it must also make payments in lieu of taxes to the Town of Riverhead [NY].

"Assuming that all of these conditions are met, and that Broadwater agrees to these conditions in writing following negotiations with the LIA, the LIA will recommend to the Federal Energy Regulatory Commission and to New York State that the Broadwater Energy proposal to locate a liquefied natural gas terminal in Long Island Sound be approved."

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