In an effort to undermine Hess Corp.'s long-standing plan for the Weaver's Cove liquefied natural gas (LNG) terminal in Fall River, MA, Rhode Island-based Save The Bay is hoping to persuade the diversified energy giant's investors from backing the project through an open letter. Weaver's Cove Energy, a joint venture of Hess Corp. and Poten & Partners, said the letter is "factually incorrect" and is typical of the environmental group's campaign to attack the project through the press.
The nonprofit environmental organization sent a letter to "all major shareholders" of Hess on Tuesday, contacted industry analysts and will run an abridged version of the letter to Hess shareholders in Wednesday's regional edition of The Wall Street Journal.
"Hess' management appears to be blindly forging ahead with this project against the will of two states and in the face of insurmountable permitting obstacles," said Jonathan Stone, executive director of Save The Bay. "However, we're confident that management will listen to shareholders when they understand that their money is being squandered."
The environmental group has fought the Hess proposal for more than seven years, maintaining that it would require extensive dredging, permanently destroy fish habitat and cost jobs as it disrupts mixed use of the Bay, rendering much of Narragansett Bay off-limits to the public.
"Management has badly miscalculated its estimation of the time and expense required to obtain the necessary permits for this project, has misjudged how quickly competing projects would come online, and underestimated the resolve of the citizens of Massachusetts and Rhode Island," Stone wrote in his letter to Hess shareholders.
Citing a variety of permitting, political and economic reasons for abandoning their plans, Stone concludes, "In the parlance of the energy industry, Hess Corporation's Fall River terminal project is a dry hole. Your money is being wasted."
Weaver's Cove Energy CEO Gordon Shearer told NGI that the letter is typical of the campaign that Save The Bay has been using the last several months. "About 50% is factually incorrect, another 25% of it is simply unsubstantiated opinion and maybe the remaining 25% has some substance," he said.
"We're essentially on a permitting hold along with all the other LNG projects before FERC because of the Commission's desire to have everyone prepare new vapor dispersion models to handle accidental spill scenarios," Shearer added. "We're in the same boat as everyone else."
He said that about a month ago the Federal Energy Regulatory Commission (FERC) sent letters to 14 different LNG companies requesting that the new models be on file. "Until that is done, the permits don't move. Going through that process and getting DOT [Department of Transportation] clearance is time consuming. It has to be done properly and carefully and that is where we are in the permitting cycle."
Save The Bay's action comes two weeks after a bipartisan letter to the top members of the Appropriations Subcommittee on Energy and Water Development was sent by U.S. Senators Jack Reed (D-RI), Sheldon Whitehouse (D-RI), John Kerry (D-MA), and Scott Brown (R-MA), urging them to prohibit FERC from using federal funds to evaluate an LNG terminal in the city of Fall River.
Save The Bay said congressmen Barney Frank (D-MA) and James McGovern (D-MA) have inserted a provision into a House appropriations bill by stating that "no funds made available by the act may be used to take any action to authorize the construction of any liquefied natural gas terminal or its infrastructure to be located within five miles of the city of Fall River, or to authorize vessels carrying liquefied natural gas to serve such terminal."
In September the Coast Guard said Weaver's Cove Energy's fall-back proposal to site an LNG terminal in the middle of Mount Hope Bay off the coasts of Rhode Island and Massachusetts and transport the LNG onshore may be doable without interfering with other commercial and recreational vessels (see Daily GPI, Sept. 10).
While FERC approved the Weaver's Cove LNG project in Fall River in 2005, it has yet to approve the offshore berth in Mount Hope Bay (see Daily GPI, July 1, 2005). According to the Coast Guard, both bays would remain safe for users -- as a result of the Coast Guard's vessel traffic management practices and recommended mitigation practices -- "while minimizing adverse impacts to other vessel traffic should the proposed waterfront facility and offshore berth be fully approved and constructed."
The good news came only days after the Coast Guard denied -- for a third time -- Weaver's Cove Energy's appeal of its original proposal to bring LNG tankers up the Taunton River to Fall River (see Daily GPI, Sept. 8). Weaver's Cove LNG project backers have been through a tortuous battle with FERC, Congress, the Commerce Department, the states, the courts and the Coast Guard to get the project built (see Daily GPI, Sept. 11, 2006, May 15, 2007).
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