CCE IN THE NEWS

Source: The Day

Broadwater To Appeal N.Y. Permit Denial

April 29, 2008

Broadwater Energy announced Monday that it will challenge New York state's denial of a key permit needed to park a first-of-its-kind floating natural gas terminal in Long Island Sound.

Broadwater, a partnership of TransCanada and Shell US Gas and Power, said it has taken the first step toward filing an appeal to New York's finding that the project did not comply with the Coastal Zone Management Act with the U.S. Department of Commerce. A Commerce Department division, the National Oceanic and Atmospheric Administration, handles appeals to state-level decisions on whether a proposed project complies with the coastal act, a 1972 federal law that gives states authority over projects that impact its coastal areas.

The New York Department of State decided on April 12 that the Broadwater project failed to meet six of 13 criteria for consistency with the coastal zone act, and cited two offshore sites where a floating terminal for liquefied natural gas would be preferable alternatives to the sensitive estuary environment of the Sound. The terminal, which would store and process liquefied natural gas imported from overseas for energy markets chiefly in New York, was to be located in New York jurisdictional waters of the Sound roughly halfway between Riverhead on Long Island and Branford. It would be 1,215 feet long and 200 feet wide, capable of supplying 1 billion cubic feet of natural gas daily through a subsea pipeline that would connect to a main gas line that crosses the western Sound. The gas would go mainly to New York City, but also to Long Island and Connecticut markets.

John Hritcko, senior vice president and regional project director of Broadwater, said he expects the appeal would be filed by May 12. As a preliminary step, Broadwater asked the Federal Energy Regulatory Commission to provide documents on the project to the commerce department. In March, FERC approved another of the key permits Broadwater needs for the terminal, despite objections from both Connecticut and New York officials and environmental groups.

Connecticut Attorney General Richard Blumenthal and the Connecticut Fund for the Environment have asked FERC for a rehearing.

Hritcko declined to describe the main arguments Broadwater would use in its appeal, other than to say,“we have plenty to work with.” The terminal was designed to be consistent with New York's coastal zone policies, the company said in a statement. The need for a new supply of natural gas to the region, Hritcko added, has only intensified in recent months as energy prices continue to rise.

In order to have the coastal management decision overturned, Broadwater must prove that“the activity is consistent with the objectives of the (coastal zone management act) or is otherwise necessary in the interests of national security,” according to information on the Commerce Department Web site.

According to the New York decision, Broadwater did not meet the following six criteria: fostering community character; protecting scenic resources; protecting and restoring the Sound; providing public access and recreational use of the Sound; projecting water-dependent uses; and promoting sustainable use of marine resources.

Of 40 appeals filed with the Commerce Department to coastal zone decisions since 1983, 27 ended with the state decisions being upheld. The Commerce Department overrode 13. Another 31 were dismissed, 61 were withdrawn, and 5 are pending.

One recent ruling involved the Weaver's Cove LNG project proposed for Fall River, Mass. Commerce twice dismissed the company's appeal to state findings that the project did not comply with coastal laws.

Anson Franklin, spokesman for NOAA, said the appeals process typically takes nearly a year.

New York Department of State officials did not return a call requesting comment on Broadwater's pending appeal. Groups that have opposed Broadwater, however, said they remain confident that New York's decision will be upheld. And even if it is not, they would continue the fight in federal courts, they said.

Adrienne Esposito, executive director of the Citizens Campaign for the Environment, noted that New York state has never lost an appeal to one of its coastal zone decisions. She also noted that the governors and administrations of both states are united in their opposition, even though the two governors are from different political parties.

Esposito and other opponents say they believe Broadwater feels an urgency to have its appeal reviewed before the Bush administration leaves office next January and a new administration that may be less favorable to energy projects like this one takes over.

”This federal administration and its Secretary of Commerce are short lived and certainly will not have the final say on Broadwater,” said Blumenthal, calling Broadwater's pending appeal, a“long, costly and doomed legal battle.” He vowed that his office would“aggressively battle Broadwater before the Department of Commerce, FERC and in the courts.”

Leah Schmaltz, legal and legislative affairs director for Save the Sound, part of the Connecticut Fund for the Environment, said the appeal had been expected, but that the focus now needs to be on finding“real solutions to the energy problems of the region.”

”It is time to have those discussions, not continue to rehash the same bad plan,” she said.

Gov. M. Jodi Rell in a statement Monday called on the Commerce Department to dismiss Broadwater's appeal