The new Rhode Island law that prevents tankers carrying liquefied natural gas (LNG) from using the state’s waters to deliver the chilled fuel is unconstitutional and conflicts with the safety-security efforts of the U.S. Coast Guard, an official with the Center for Liquefied Natural Gas (CLNG) said Tuesday.

The bill (H 6731) was passed by the Rhode Island General Assembly in June and enacted into law in late July. “The U.S. Constitution dictates that the state cannot legislate in an area in which Congress intends to regulate,” said Bill Cooper, executive director of CLNG and a long-time energy lawyer, at a conference in Boston.

“Furthermore, the U.S. Coast Guard has already implemented a pervasive safety and security plan for Narragansett Bay, and the new law conflicts with it. A state law can’t conflict with a federal determination on the same subject,” he said.

A similar law in Massachusetts, which was enacted in 2004, is now being challenged in court by the Departtment of Justice on constitutional grounds. The Coast Guard in July warned Rhode Island lawmakers that they had overstepped their authority by restricting LNG tanker traffic in state waters, but no one — either in the energy industry or the Coast Guard — has challenged the state law yet.

There have been “several discussions throughout the industry exploring the possibility. But to my knowledge no one has stepped forward” and filed a lawsuit, CLNG’s Cooper told NGI.

The Rhode Island law extends the Coast Guard-mandated exclusion zone around LNG ships to include the shoreline, and structures and materials on it, making it impossible for LNG tankers to enter even the widest areas of Narragansett Bay, which serves as the waterfront for two of Rhode Island’s largest cities — Providence and Newport.

The law was specifically intended to block the construction of the controversial Weaver’s Cove LNG terminal project in Fall River, MA, a $250 million facility that would provide 800 MMcf/d of peak sendout capacity, 400 MMcf/d of baseload supply and 200,000 metric tons of LNG storage. The terminal would be located at a former petroleum import terminal on the Taunton River, which feeds into Mount Hope Bay and the Narragansett Bay.

Weaver’s Cove spokesman Jim Grasso said the Rhode Island law wouldn’t affect the Weaver’s Cove project. He argued that the state law was preempted by federal law, specifically the Commerce Clause of the U.S. Constitution, the Natural Gas Act of 1978 and the Energy Policy Act of 2005. Rear Adm. David P. Pekoske, commander of the First Coast Guard District, also agreed that any state law in this instance would be preempted by federal law.

The Rhode Island law was the latest of many obstacles that have been thrown in front of the proposed Weaver’s Cove LNG terminal, a project that has elicited considerable opposition from local, state and congressional leaders that has spilled over into the courts. The Federal Energy Regulatory Commission approved the project in July 2005 despite the protests.

Opponent Rep. Jim McGovern (D-MA) responded to FERC’s approval by adding language in a transportation authorization bill, later signed into law by President Bush, that blocked the demolition of the Brightman Street Bridge connecting Fall River and Somerset, MA. This action would make it impossible for large LNG tankers to navigate the Taunton River and reach the Weaver’s Cove facility in Fall River (see Daily GPI, Aug. 10, 2005). Weaver’s Cove, which is sponsored by Poten & Partners and Amerada Hess Corp., countered with a proposal to build smaller LNG tankers to get around the constraints of the Brightman Street Bridge (see Daily GPI, Feb. 14).

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