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Source: The East Hampton Star

Feds Tank Broadwater

Commerce Dept. says environmental costs too high

BY JENNIFER LANDES

Posted: April 17, 2009
Originally Published: April 16, 2009

It all started with a letter.

Plans to place a floating gas barge the size of one of the former World Trade Center towers in the middle of Long Island Sound appear to have been finally and resoundingly quashed by the United States Department of Commerce.

By barring the issuance of any federal permits for the construction of the barge and an attached 21-mile pipeline, Secretary of Commerce Gary Locke upheld New York State's objection to Broadwater Energy's proposal to place a liquefied natural gas terminal about nine miles off Rocky Point.

One of Gov. David A. Paterson's first significant acts in office was to reject the project. The New York Department of State also ruled that the project was inconsistent with six Long Island Sound Coastal Management Program policies that had been approved by the federal government. These included minimizing the damage to the environment caused by development, protecting scenic resources, protecting the ecosystem, providing public access to the Sound's shoreline, and promoting sustainable use of living marine resources in the Sound.

Broadwater appealed these decisions to the Department of Commerce in June.

Because the project was to be placed in an undeveloped part of the Sound, the department decided that it would "significantly impair its unique scenic and aesthetic character" as well as "undermine decades of federal, state, and local efforts to protect the region."

The department said it based its decision on information provided by the Federal Energy Regulatory Commission, which had approved the plan, and on briefs and documents offered by the parties, the opinions of interested federal agencies, and a brief filed by the attorney general of Connecticut.

The Department of Commerce concluded that "the record does not establish that the project is consistent with the objectives" of the Coastal Zone Management Act of which the Long Island Sound Coastal Management Program is a part. The department agreed with Broadwater Energy that the project "furthers the national interest in a significant and substantial manner," but not in a way that outweighed the project's effect on the environment. Nor did it find that the project was "necessary in the interest of national security."

John Hritcko, a senior vice president of Broadwater, left open the possibility of an appeal in a statement the company released on Monday. "We will review the specifics of the ruling before making a decision on our next steps." Broadwater is a partnership between Trans-Canada Corporation and Shell Oil, which is based in the Netherlands.

The company has argued that bringing in liquid natural gas from foreign countries and revaporizing it here for distribution through a new pipeline would reduce energy prices on Long Island. Opponents said that once in the pipeline, most of the gas would be going elsewhere and that there were other ways to increase supply through existing pipelines and other proposals for similar gas terminals in the region.

National environmental groups generally support such proposals because of the benefits of using natural gas in power plants over burning coal. On Long Island, however, the Citizens Campaign for the Environment was fierce in its opposition. Reacting to the announcement, Adrienne Esposito, its executive director, called it a victory for states' rights and grassroots opposition.

Assemblyman Fred W. Thiele Jr., who was a vociferous opponent of the project in the State Legislature, said that "although there is obvious potential for a court appeal, the likelihood of success is close to zero. The State of New York and the state's Department of State said it doesn't comply with the coastal zone policy, and the federal government's Department of Commerce is saying there is no national security issue to override it."

Ms. Esposito agreed. "Even if Shell Oil continues the battle in court, it will be tied up for years to come. This chapter has closed."

Mr. Thiele said he was surprised the company would even mention an appeal. "The courts will give great deference to the state or federal government . . . at some point you have to stop throwing good money after bad."

Representative Tim Bishop called the decision "the final nail in Broadwater's coffin."

Not a single government official in the area that would be affected was in favor of the proposal, although at one point it appeared to some observers that in his refusal to take a stand on it, former Gov. Eliot Spitzer was inclined to approve it before he left office. Mr. Thiele credited Mr. Paterson's rejection with providing the most significant argument against the plan.

After he spoke to Mr. Locke on Monday, Senator Charles Schumer said in a statement, "We certainly need more affordable power on Long Island. Unfortunately, Broadwater refused to commit that any of the natural gas brought to its terminal would be discounted for Long Island ratepayers and refused to address the security and environmental concerns related to the Sound."

East Hampton Town, which was party to a lawsuit against the project, cited concerns including potential damage to the Sound's fisheries from the discharge of heated chlorinated water, which is necessary for the terminal's processing of natural gas, and the regular movement of huge tankers through the Race, an area between Block Island and Fishers Island. The tankers require a one-mile safety zone and might have chosen a route into the Sound that would have taken them close to Montauk.

Supervisor Bill McGintee, who once alluded to the specter of the Exxon Valdez oil spill in his assessment of the project, said marine traffic between Montauk and Block Island and the harm to the fisheries were major concerns for the town.

"A larger issue was that providing security would have been very difficult for the Coast Guard. By its own admission, it couldn't do it." Mr. McGintee said the burden would have fallen on the town's marine division, which would have been unfair to the taxpayers.