2010-11-04 / News

Weaver’s Cove encounters setbacks with state of Massachusetts

By Dan Wright

For followers of the Weaver’s Cove liquefied natural gas issue, I write to provide a chance to catchup and sort through some of the information you may have been gathering. I write on my own account and the views expressed below are not necessarily the views of the LNG Threat Committee.

Until Weaver’s Cove Energy, which is owned by Hess LNG, makes the decision to withdraw its permit application from the Federal Energy Regulatory Commission (FERC), this issue will remain very much alive. Fortunately, Weaver’s Cove was handed a setback.

There have been recent accusations of hypocrisy and misinformation leveled at opponents of the Weaver’s Cove proposal. The irony of these accusations is that they are themselves imbued with misinformation. For example, one writer suggests that it is hypocritical to request that Hess move its project offshore because this means using more of the cryogenic “pipe-in-pipe” LNG pipeline incorporated into the current proposal, which pipeline opponents have emphasized poses a threat to local populations. In fact, the offshore technology identified as an alternative to the Weaver’s Cove proposal does not involve “pipein pipe” technology. Instead, it involves re-gasifying the LNG offshore and piping it ashore using a more conventional pipeline. This technology is currently in use off the coast of Massachusetts and poses relatively little risk to the densely populated areas ashore.

There was also the absurd accusation that the Congress of Councils on Sept. 8 was not intended to be a public event; ironically, a member of the public who attended the event leveled this. Public awareness was one of the primary goals of the event and it was well attended. The morning schedule allowed for the presence of the speakers and press, as well as the public.

It was also suggested that there is some sort of environmental hypocrisy in considering existing shale gas resources while opposing the Weaver’s Cove project. In fact, it would be irresponsible to fail to consider these resources. As FERC’s research office reported on Oct. 21, shale gas production has increased dramatically in the past five years, now accounting for 20 percent of U.S. production, and that trend is projected to continue. This has helped reduce U.S. gas prices, which are now well below the international average, and Rhode Island gas prices, which are projected to fall signifi- cantly this year. Yet in Narragansett Bay we have a critical natural resource faced with degradation and impairment due to a proposal whose primary benefit is purported to be lower gas prices for the region. Aside from Hess’ profits, what reason is there to proceed if alternative resources are already achieving this benefit?

An Oct. 21 FERC report notes that prices in the Northeast continue to be higher than in other parts of the country during the winter months, although the difference is shrinking and pipeline capacity in the Northeast is expanding rapidly. But in the short term, FERC notes that LNG may continue to “play a role” for New England. However, the FERC report says nothing about a need for new LNG terminal capacity, but instead states: “New England has access to more than 3.2 [billion cubic feet per day] of LNG terminal capacity, including two new offshore terminals in Massachusetts Bay and the Canadian Canaport terminal.”

For opponents of Weaver’s Cove’s proposal, all of this is welcome news. If this trend continues, the project may lose economic viability for Hess, who may wind up abandoning it. But we are not there yet, and Weaver’s Cove’s application is still pending.

Fortunately, the Weaver’s Cove application was dealt a separate setback on Oct. 21, when FERC denied Weaver’s Cove’s request for a determination that a particular condition of the permitting process has been met. Due to questions about control over a piece of property within the exclusion zone at the land-based portion of the proposed facility on the Taunton River, Weaver’s Cove will need a Massachusetts state court ruling in order to establish title to the property, a portion of which appears to belong to the state of Massachusetts. This means that the project may be subject to further delay, and possibly a roadblock if Massachusetts should fail to cooperate in fulfilling the requirement.

We will see how Weaver’s Cove reacts to the latest information from FERC. It has remained undaunted in the face of previous setbacks, so stay informed and do not assume that this threat will go away on its own.

Dan Wright is chairman of the Jamestown LNG Threat Committee

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