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LNG opponents keeping pressure on projects Proposals keep running into safety questions, local community challenges Larry Persily Petroleum News Government Affairs Editor
Voter rejection of a liquefied natural gas receiving terminal in Maine isn’t stopping companies from pursuing other coastal sites to feed the nation’s demand for more gas, nor are opponents of LNG terminals pulling back on their efforts after the victory.
It’s hard to find a proposed LNG terminal that doesn’t have some local opposition. Most if not all of the 30-plus terminals proposed to serve East Coast, Gulf of Mexico and West Coast markets face similar arguments, with safety concerns at the top of the list.
The debate is still under way in Maine, even after voters March 10 blocked plans by TransCanada Corp. and Conoco-Phillips for an LNG terminal at Harpswell, 15 miles up the coast from the state’s largest city, Portland. Another proposed terminal site is under consideration at Sears Island, Maine, about 90 miles north of Portland, in Penobscot Bay.
State officials have confirmed that two companies are looking at the island as a possible terminal site, though the state has declined to name the companies and no firm has publicly announced its interest in the location.
“(Searsport) is in an earlier stage than Harpswell, but the people that are interested in it have continued to be involved in preliminary discussions with (the state Department of Transportation) … the landlord for Sears Island,” said Lee Umphrey, spokesman for Maine Gov. John Baldacci. “But as I said, it’s in the early stages.
“The experts say that Maine has the capacity for one LNG operation,” Umphrey said. “What the governor has said all along is that the best LNG proposal should be the one that is selected, after it goes through the community process.” Opponents battle second site in Maine Friends of Sears Island is leading the opposition to an LNG terminal at the site, Maine’s largest undeveloped island. “Locating an LNG terminal on Sears Island is like placing an atomic bomb in the middle of Acadia (National) Park,” the organization said in a recent letter.
Also in New England, public officials from Massachusetts and Rhode Island are joining the call to slow down efforts to build gas terminals along the coast.
Massachusetts Democratic Reps. Barney Frank and James McGovern have joined Mayor Edward Lambert Jr. of Fall River, Mass., in urging that the Federal Energy Regulatory Commission “take the proper amount of time” in reviewing an application for a terminal on former Shell Oil property in the city of just under 100,000 residents.
Weaver’s Cove Energy LLC has applied to FERC to build a $250 million, 68-acre regasification and storage terminal at Fall River, capable of handling 400 million to 800 million cubic feet of gas per day.
The congressmen in their letter to FERC called for a thorough analysis of “this potentially dangerous facility.”
The company hopes to receive FERC authorization in time to start construction for a late 2007 start-up date. Rhode Island legislator wants to ban LNG tankers Targeting the same project, a Rhode Island legislator has introduced a bill to ban LNG tankers from his state’s waters. If passed into law, and if it were to survive a federal challenge and expected litigation, the legislation would block tankers from getting to the proposed Fall River, Mass., LNG terminal. The only way to reach Fall River by water is to go through Rhode Island’s coastal waters.
The Democratic lawmaker, Rep. Raymond Gallison, said public safety is more important than interstate commerce.
Also on the East Coast, Florida Gov. Jeb Bush has decided that two companies looking to build receiving terminals in the Bahamas must answer more environmental questions before winning state approval to build their pipelines to Florida’s shore.
Bush decided earlier this month to hold back state approval, despite a recommendation from the Florida Department of Environmental Regulation that the state give its go-ahead to the companies. The Republican governor said he is concerned about his state taking on the role as a natural gas hub.
“If Florida becomes a point of entry for natural gas from the Caribbean to service the eastern United States, I’m not sure that’s a great deal for us,” Bush said, according to the Miami Herald. The governor and his Cabinet are scheduled to discuss the issue again in April. Coral reefs at issue for Florida projects Scientists, environmentalists and others have questioned the possible harm to coral reefs and fisheries habitat from natural gas pipes running up the coast, in addition to the fire hazard from gas leaks.
Bush said he is concerned about the number of pipelines possibly coming into South Florida. In addition to AES Corp. and Tractebel Calypso Pipeline Co., a third firm, El Paso Corp., is seeking federal approval for a pipeline to bring gas to Florida from a receiving terminal in the Bahamas.
AES Corp. is the furthest along of the trio; it has its FERC permit in hand. AES wants to build a 54-mile pipeline from the Bahamas to near Port Everglades. Tractebel has an agreement with Florida Power & Light to run a 90-mile pipe from Freeport, Bahamas, to Port Everglades.
The companies would pay a fee for crossing state land and the coral reefs.
Bush’s unexpected decision to delay state action prompted Don Bartlett, AES project manager, to walk out on the meeting with the governor, the Miami Herald reported.
LNG proponents face the same safety and environmental questions on the West Coast, most recently at Eureka, in Northern California, where San Jose-based Calpine Corp. wants to build a terminal to handle up to 1 billion cubic feet per day.
The company is looking at a site near the municipal airport, at Humboldt Bay. The city is considering an exclusive agreement with Calpine for the property. California meeting draws 1,500 About 1,500 people showed up for a March 16 public hearing on the proposal for the city to reserve the property for Calpine while the company works to put together permits and community support for its project. The city council was unable to accommodate all of the people who wanted to testify and continued the meeting to March 18.
The reception was better in rural Louisiana where more than 300 residents gathered at a town meeting earlier this month to learn more about Cheniere Energy Inc.’s proposal for a $450 million LNG terminal.
Supporters said it was the largest community gathering they had ever seen, with the audience estimated at one-third of the area’s population.
“It will put people back to work. It will also mean tax revenue,” Cameron Parish Sheriff Theos Trahan was quoted in newspaper reports of the meeting. “We’re excited about it and happy they’re here.”
The Houston-based company wants to build a two-tanker terminal, regasification plant and 10 billion cubic foot storage facility on the Louisiana side of the Sabine ship channel, just across the border from Texas. Cheniere is looking forward to starting operations in 2007.
Editor’s note: See update on Calpine project on page A3.
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