Monday, November 13, 2006

Weaver's Cove LNG in Deep Trouble


The proposed LNG terminal for Fall River has taken several major hits in this past week. First of all, the election will help take the momentum away from those who would force risky energy development into communities against the political will of the region. There are no guarantees, but it's likely that a democratic Congress will actually listen to the Governors and Delegations of Rhode Island and Massachusetts when they say they don't want Hess/Weaver's Cove in Fall River. Those "environmental" agency officials who are pawns of the oil and gas industry will be replaced, if we're lucky, with reasonable people who will work to plan a sustainable energy future for the Northeast instead of kowtowing to industry pressure from a greedy few.

Also, several proposed offshore LNG development projects will now get a leg up on the land-based competition. See today's Boston Globe story below on that...

It seems that between the Canadian Maritimes' facilities that can pipe LNG to New England and any of the proposed offshore facilities, there is no need to site any LNG terminals that would unduly risk the environment, the safety of our cities, or the rights and responsibilities of states to have a role in siting. A regional soultion has always been the most sensible soultion to the need for gas, and if they have any clue at all, Weaver's Cove and Hess will finally realize that their damaging proposal is a non-starter and that they should go back to the drawing board. JT

Romney may swing debate on LNG sites

Offshore approvals could slow land plans

By Beth Daley, Globe Staff November 13, 2006

In his last days in office, Governor Mitt Romney could dramatically alter the controversial debate about where to put new liquefied natural gas terminals as he decides the fate of two gas ports in the deep waters off Gloucester.

If Romney allows construction of one or both of the ports, 8 and 13 miles southeast of the fabled fishing city, they would get a head start on nearly a dozen proposed land-based LNG terminals from Rhode Island to Eastern Canada.

The offshore facilities could supply much of New England's projected natural gas needs for the immediate future, say some energy analysts, so their approval could delay -- if not outright kill -- the land-based projects.

The land terminals, including ones in Fall River and on a Boston Harbor island, have provoked stronger opposition from communities and politicians than the offshore ones because of safety concerns.

Federal laws give Romney no final say over the land-based projects, but he has veto power over the offshore proposals. In the past, he has said he favors offshore LNG over terminals on land because they are far from people in case of an explosion. But a spokesman last week said Romney is reserving final judgment until a public comment period is completed and a final state environmental review is released next month.

The US Maritime Administration, the lead permitting agency for offshore LNG, wrapped up public hearings last week on one of the projects, called Northeast Gateway. Tomorrow, the last hearing will be held on Neptune, the other project. Written comments on both will be accepted for several more weeks. The governor then has until Dec. 26 to make a decision on Northeast Gateway and Jan. 2 -- his second to last full day in office -- for Neptune. If he does nothing, the projects will automatically be approved.

New England needs at most two new LNG ports in the next five years to meet the region's growing energy demand, analysts predicted, and the offshore projects can be built much faster -- less than a year, compared with three years for land terminals. Natural gas consumption in New England is expected to grow some 25 percent by 2021, according to the Northeast Gas Association.

The Fall River proposal, known as Weavers Cove, has been approved by the federal government, but it remains mired in legal challenges and has faced intense public opposition because thousands of residents live nearby. "Clearly the offshore proposals will affect other projects and Fall River," said Neal B. Costello, a Boston lawyer who represents energy companies and is not involved in the current LNG proposals. "If these offshore projects do go forward, Weavers Cove is facing not only a political hurdle but an economic one."

A Weavers Cove official said last week that they still would build even if the offshore projects are approved because the proposed Fall River terminal is necessary to meet energy demand in the future.

Some analysts say it is too early to predict which LNG projects will be winners and losers because there are so many variables -- from the securing of long-term supplies of gas from overseas to lawsuits to stop construction.

A large LNG facility called Canaport is under construction in New Brunswick, and its plans to push gas into the New England market could erode the need for new LNG receiving ports or terminals. Some analysts say the Fall River terminal is needed because it will have the infrastructure to receive, store, and transport supercooled gas on peak demand days. The offshore ports are designed primarily to deliver vapor into the system that can't be stored, analysts said.

"The offshore projects will compete, but it won't necessarily drive Weavers Cove out," said John Meeske, president of Energy Market Decisions Inc., an energy firm in Hopkinton. "It could delay for a few years a land-based terminal, but it doesn't necessarily mean it will not be built, because demand continues to grow."

If Romney grants approval, Northeast Gateway officials say, they could be operating by December 2007. Neptune, proposed by Suez, the conglomerate that owns an Everett LNG facility, plans to go on line in 2009. Construction of an offshore terminal would not result in the closure of the land-based terminal in Everett.

The two offshore LNG ports would act as permanent floating factories. Ships from overseas would dock and regasify supercooled gas on board before pumping it into a pipe system connecting to the mainland. As soon as one of the massive ships -- some almost 2 1/2 football fields in length -- completed its weeklong unloading, another would take its place. Each ship could hold enough super-cooled gas in its tanks and labyrinth of pipes to heat about 30,000 homes for a year.

The only existing offshore LNG port -- in the Gulf of Mexico -- is run by Northeast Gateway's parent company, Excelerate. However, eight other offshore proposals are under review around the nation by the Maritime Administration, and two others in the Gulf of Mexico have been approved.

The governor's final say over offshore LNG lies in the Deepwater Port Act of 1974, which granted refusal rights over proposed offshore oil ports to adjacent coastal states. That law was amended in 2002 to include natural gas.

"The point hasn't been lost on me that a governor cannot stop a proposal like Weavers Cove, which clearly endangers the people he represents, but [the law] allows him to prevent one offshore," said Mayor Edward Lambert of Fall River. "It's incongruous."

The offshore proposals are opposed by fishermen who fear a loss of fishing grounds and others who worry about impacts to the federally endangered right whale and other marine mammals. But they have not generated the same outrage that Weavers Cove or other on-shore sites have.
In fact, state environmental officials have praised the offshore projects' water intake system, which has dramatically reduced the amount of ocean water needed to warm the LNG to about 5 million gallons a day from an originally proposed 54 million gallons.

The projects could exclude fishermen from about 7 square miles of fishing grounds, but federal officials say they are researching whether boats could steam through the closed zone to other fishing areas.

Beth Daley can be reached by e-mail at bdaley@globe.com.

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