CCE IN THE NEWS

Source: Newsday

Broadwater starts to fight state rejection of gas barge

April 28, 2008

Broadwater Energy said yesterday that it plans to fight on for approval of the bitterly-controversial liquid natural gas terminal that it proposes for Long Island Sound.

The Houston-based joint venture between Shell and TransCanada said it had taken the first step toward appealing New York state's April 10 rejection of the 1,200 foot-long shiplike structure.

"We have built-in a time frame within our planning process for appeals and further review," John Hritcko, Broadwater's Long Island-based project chief, said in an interview. "It's what you have to do when you're proposing major energy infrastructure."

The appeal will be to the U.S. Department of Commerce, which can overide the rejection last month by New York State, even though the proposed site is in state waters. If the commerce department sides with Broadwater, opponents, including New York and Connecticut, could go to court to try to stop the project.

The first step announced yesterday was to ask the Federal Energy Regulatory Commission, which approved the project in March, to prepare a consolidated record of the case, including arguments by proponents and opponents, and turn it over to Commerce officials for their consideration.

Hritcko said Broadwater has until May 12 to file an appeal with Commerce and that the agency then has about a year to make its decision. Energy regulatory commission spokeswoman Tamara Young-Allen said it hopes to have the consolidated file ready by May 12.

Technically, New York's refusal April 10 came in the form of a determination by the state's Department of State that the project is not consistent with New York's Coastal Zone Management Program, which is administered by the state department under a structure provided for by federal Coastal Zone Management Act of 1972. The commerce department in turn administers that act.

A commerce department spokesman said its National Oceanic and Atmospheric Administration would handle the appeal and that such cases sometimes involve public hearings.

In a statement, Hritcko said, "Despite the recent determination by the [department of state], we firmly believe that Broadwater is the best way to deliver a new supply of clean, affordable and reliable natural gas to the region without the onshore and near shore environmental and safety impacts associated with other alternatives."

There is a precedent not far from Long Island for the Commerce department to overrule a state. In 2004, the federal agency overturned Connecticut state environmental officials' rejection of the proposed 50-mile-long Islander East gas pipeline project that would run from Branford, Ct., to Yaphank and supply natural gas to Connecticut, New York City and Long Island. Connecticut promptly sued and the matter is pending in a federal court.

Broadwater's Hritcko said company officials were prepared for a years-long court battle if that's what it takes to get their plant approved for a mid-Sound location north of Wading River.

Gov. David Paterson, who came to Long Island April 10 to announce the state's opposition to Broadwater, said an appearance in upstate Troy yesterday that he wasn't surprised that the energy company had decided to fight. "That's their decision," he said.

"Certainly there will be a review. I respect that they still feel they have a better idea. But we just felt we could not take that risk."

On Long Island, executive director Adrienne Esposito of Citizens Campaign for the Environment, a leading Broadwater opponent, said she wasn't worried about the appeal. "It's over," she said. "Shell Oil is just lashing out like a wounded beast in its death throws."

Connecticut Gov. Jodi Rell urged in a statement that the commerced department reject the appeal. "I believe any objective analysis of this project will conclude that Long Island Sound is no place for a giant industrial barge," she said.

The New Haven, Ct.-based Connecticut Fund for the Environment said it wasn't either by Broadwater's decision and said the appeal "does not change the overall problem – that for multiple reasons, this is not the right project for this area."

Meanwhile, state and local officials and environmentalists in New York and Connecticut have in recent weeks formally asked the Federal Energy Regulatory Commission to reverse its March 20 decision approving Broadwater's application with conditions, on the grounds of potential environmental damage to the sound and a contention that the commission violated federal law by making its decision before New York State officials had made theirs. The commission normally rules on such requests within 30 days of the deadline for filing them, which in this case was April 20.

Broadwater Energy had hoped to have the facility in operation in 2011, taking on super-cold liquified natural gas from tankers, heating it to return it to a gaseous state, then shipping west via a new 25 mile-long pipeline to have been laid on the sound floor.

That pipeline would connect with an existing one that runs across the Sound from Connecticut to Northport.

A consultant's report released in July by the Long Island Power Authority said the billion cubic feet of additional gas from Broadwater would have saved New Yorkers a total of $14.8 billion in natural gas and electricity costs between 2010 when the facility would begin operating and 2020. The report did not promise rates lower than they are now, however -- only lower than what they would have been without Broadwater -- about 17 percent lower in the case of natural gas.