2005-10-06 / News

Proposed LNG site a matter of cost and profits

By Dotti Farrington

The liquefied natural gas battle is basically a matter of cost and profits for capitalists versus the concerns of consumers, according to panelists at a Sept. 27 forum held at Portsmouth High School. Jamestown town officials attended the meeting.

A representative for the New York City-based Hess Company, which wants to build a new LNG terminal at Weaver’s Cove in Fall River, Mass., said the location was the best for his company because it is the cheapest available in New England. A representative for Save The Bay, Rhode Island’s largest environmental advocacy group — which opposes the specific location, not the development of LNG resources in general — said business and Federal Energy Regulatory Commission officials have failed to evaluate New England’s needs and options on a regional basis.

Last week’s meeting, billed as a fact-finding conversation, featured Gordon Shearer, chief executive officer of Weaver’s Cove Energy, and John Torgan, who patrols Narragansett Bay for Save The Bay. The discussion was co-sponsored by the Newport County Fund of the Rhode Island Foundation and the Newport Daily News as part of its series on community concerns.

Recent LNG activities

The forum, the filing of the greatly discussed legal brief against a proposed LNG facility in Fall River, a dispute about the status of the review of an LNG facility by the R.I. Coastal Resources Management Council, and talk about an LNG for Boston Harbor are among recent developments in the proposed plans for LNG facilities in New England.

At the forum, Shearer acknowledged other possibilities, especially offshore operations, but he said they were too expensive to serve New England’s needs. Shearer also said that any LNG operation based anywhere was not guaranteed to serve customers in that area, but would be made available to wherever the best price is. For instance, if the hurricane ravaged Gulf Coast needed LNG from elsewhere and would pay higher prices, Weaver’s Cove would sell its LNG supply there, according to Shearer.

Even more, bigger tankers?

Shearer said that the permit given to Weaver’s Cove by the FERC in July does not limit the number of tankers and number of trips through Narragansett Bay, although the company’s current intended plan calls for one tanker at a time making about 70 roundtrip deliveries a year. In response to questions from the audience, Shearer added that if Weaver’s Cove could increase storage in Fall River, it would schedule more tankers and more tanker trips. He noted that more storage at Fall River was not practical at this time.

The LNG industry is now building even bigger tankers than the 900-foot ships generally designated for travel in Narragansett Bay, Shearer said. The newest tankers draw too much water and are too high for the bridges in the bay, Shearer said.

That the Fall River port needs to be dredged so that the “smaller” tankers can use it has been discussed extensively. At last week’s forum, Torgan called the dredging plans environmentally unsound.

The 75-minute discussion was orderly and respectful, except for a few minor outbursts from about a dozen anti-Weaver’s Cove pickets, mostly from Fall River. They carried 2by 3-foot signs denouncing the LNG plans. Two signs read: “Stay the FERC out of Fall River” and “Keep the HESS out of Fall River.”

Among other issues, the opponents referred to “excessive profiteering” by Hess and its supporters. The panelists were quite civil during the discussion, jabbing each other only occasionally, such as when Torgan challenged Shearer’s claim about the exhaustiveness of the Hess search and the degree of suitability for consumer benefits of the Fall River site.

Attending the forum, which was held between 4:45 and 6 p.m., were about 50 people. Representing Jamestown were Town Council Vice President Julio DiGiando, councilman William Kelly, and councilor Barbara Szepatowski, who is the town’s liaison to all LNG activities and meetings. State Representative Bruce Long, (R-Jamestown, Middletown) also attended the discussion.

The forum panelists agreed that New England has a major seasonal need for energy and that LNG was an appropriate, if not preferred, source for the energy, but they disagreed about the location for a facility. Shearer acknowledged that Fall River, over any other option, had significant cost saving benefits for his company.

Torgan spoke against locating a storage facility for highly volatile LNG in a densely populated city, and using supertankers that would disrupt already existing boat traffic in the bay. A remote site, especially an offshore location, would solve all the security, environmental and economic problems that are involved with the Weaver’s Cove plan, Torgan said.

The FERC approved the Fall River site in late June, but Rhode Island and Massachusetts state, county and local officials, as well as federal legislators, are appealing the FERC decision, contending that the FERC ignored safety factors. The FERC has acknowledged the appeal but not announced a timetable for acting on it. The next regularly scheduled FERC meeting is Oct. 20.

Shearer expressed confidence that the FERC would uphold its decision and cited Congressional affirmation of the FERC’s authority over states’ rights. He said his company was determined to proceed despite widespread opposition its plan to build a storage facility. Construction is expected to start within a year and be completed by 2009, Shearer said.

About costs to communities, the CEO said Hess would contract with towns for safety and emergency services, but no one is allowed to pay or reimburse the Coast Guard or other federal personnel for services, meaning that taxpayers will pay for those costs of protection.

Torgan criticized the FERC for creating a fight over state rights versus federal authority.

“FERC does not play well with others,” he said. He credited Rep. Long for his ongoing work with others to protect state rights.

Torgan referred to opponents’ hopes that the plan can be stopped in other ways, especially through denial of a Massachusetts permit to dredge the Taunton River and Mount Hope Bay to enable tanker access to the Fall River port.

NIMBYism

Shearer said New Englanders are concerned about “not in my back yard (NIMBY)” while Gulf Coast residents vie to get LNG terminals, especially in the aftermath of the recent hurricane destruction. He also said that New Englanders need and want more energy and have not done well with conservation, creating an inviting situation for energy providers. He said New Englanders have rejected coal, nuclear, wind and solar sources of energy. He said that even though they seem to embrace the concept of LNG, they still are NIMBY about it. He noted that LNG provides for 55 percent of the electrical power for New England.

Legal filing

Washington, D.C., attorneys filed an amicus (friend of a party) brief dated Sept. 26 with the FERC on behalf of Newport, Bristol, Tiverton, Middletown, and Portsmouth as communities along the transit route of LNG tankers en route to the proposed Weaver’s Cove Energy terminal. The brief said that the “strong opposition” of the towns “was entirely consistent with the opposition forcefully advanced by the governors and attorneys general of Massachusetts and Rhode Island, and by other elected representatives.”

The lawyers wrote, “The Towns were moved to make this filing because of the unconscionable indifference displayed to their interests, and to the health and well-being of their citizens.”

Katrina cited

They said the need to oppose the project is “underscored by the recent tragic events occasioned by Hurricane Katrina. The assumed ‘ability to cope’ that underlies the (FERC) rationale for approval, notwithstanding the recognized possibility of an accidental or intentional breach of LNG containment and the cataclysmic conflagration that likely would result, was never realistic. The ineffectiveness of the response to Katrina should leave no doubt about the lack of national preparedness to cope with a major regional calamity — a reality that surely will not go unnoticed by those who wish to do our Nation harm. Those of us familiar with the local circumstances never were under the illusion that the security of LNG transports could be ensured or that the Region could respond adequately to the aftermath of a LNG tragedy. There surely is no occasion for the Commission’s indifferent optimism and now is not the time to invite yet another regional catastrophe.”

Jamestown’s role

Jamestown did not join in the amicus brief because the Town Council determined that hiring the Washington, D.C., law firm would violate town rules on competitive selection of lawyers. State Attorney General Patrick Lynch originally said that the town could be a party to the legal action without cost, but later he said the town would have to pay up to $25,000 to hire the law firm.

Jamestown town council members have been emphatic about their opposition to the LNG plans, and continue to be prepared to spend town money to fund opposition. But they decided they could not join in the brief proposed by Lynch.

The situation has led to a fierce debate between Lynch and town officials who still have not settled their differences. Council members called for a united effort against the LNG plans, but Lynch repeated criticisms of the councilors.

CRMC battle

Among numerous governmental permits any LNG waterfront terminal needs is approval by the state Coastal Resources Management Council. Weaver’s Cove maintains it has the CRMC authorization through the CRMC’s lack of action on its application. The CRMC maintains it notified Weaver’s Cover that its application was incomplete. Weaver’s Cove filed Aug. 18 for a clarification on the matter. The CRMC rejected the claim that Weaver’s Cover was no longer subject to its review. On Sept. 26, Weaver’s Cove filed an extensive document with the FERC claiming that the CRMC no longer had claim to review its plans because of technicalities about filing dates and notifications.

Another LNG option?

A new proposal made by the AES Company of Arlington, Va., to locate an LNG import terminal on an uninhabited island in Boston Harbor is being cited by some officials as a better site than Weaver’s Cove. The company wants to build its facility on Outer Brewster Island, an abandoned former military site 10 miles from downtown Boston and more than two miles from the nearest homes in Hull, Mass.

Currently, there is a functioning LNG import terminal in Everett and two proposals for offshore facilities near Gloucester.

The immediate response from Shearer was that the new Boston Harbor proposal would not end work at Weaver’s Cove and represents one more solution for New England’s energy needs. The CEO suggested that the recent Gulf Coast hurricane damage shows that several terminals are needed.

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