Wednesday, June 14, 2006

We Got A Little Gas...

This is an issue that will reverberate around the country as oil prices firm up around the $70 a barrel level, and natural gas prices climb higher in response.
Troubled waters
Citing an old state law, Levy seeks to ban liquefied gas facilities such as one proposed by Broadwater Energy

Newsday Staff Writer

June 14, 2006

Citing an 1881 state law, Suffolk County Executive Steve Levy yesterday filed local legislation aimed at barring a liquefied natural gas facility in the Long Island Sound like the $700-million project proposed by Broadwater Energy.

A top Broadwater official promptly branded the proposal "a gimmick" -- and maintained that under federal law, the county lacks the power to intervene in the project.

But legislative resistance to the 1,200-foot-long offshore terminal is mounting on other fronts, with growing concerns for possible safety and environmental problems. Assemb. Thomas DiNapoli (D-Great Neck) and Kenneth LaValle (R-Port Jefferson) have proposed a bill that would require new protections of coastal waters and block the secretary of commerce from overruling New York's secretary of state on such projects, who oversees the state's coastal program, on how those protections are established.
So what precisely is this project in question?

An offshore LNG facility, where liquified natural gas would be shipped in, and warmed up until it became gaseous and therefore able to travel down a pipeline.

Where is this gas coming from? Ahhhhhhhhh, there's the nub. See, the US has some of the biggest natural gas reserves on the planet, but with the price of oil (until recently) very cheap, there was no short-term (read: profitable) incentive to develop the fields, or refineries or pipelines (some of you using MCI long distance service actually have your telephone calls routed down old gas lines).

This gas would come from abroad. Now, this project is not happening in a vacuum. Already being constructed are two pipelines from eastern Canada that presumably will deliver sufficient natural gas to the region for it's anticipated growth in demand. A report released by Synapse Energy Economics back in January indicates that applying conservation and efficiency programs already in existence could provide for 75% of that growth through 2015, so coupled with the two new pipelines, would be more than sufficient for meeting New York and Connecticut's gas needs.

Further, a proposed pipeline from northern New Jersey, which already has LNG facilities in place and gas refineries (thus that smell by exits 10 and 11 on the Turnpike) could combine with these protocols to provide energy well into the mid-21st Century.

And this is before taking into consideration any environmental and security impacts of the project. While this facility would not be anchored into the sea bed (it would be a man-made island) there are navigation concerns, as well concerns about manfactured alterations to the barrier reef islands that protect Long Island from storm surges and strong ocean surf.

Believe me, with global warming raising the sea levels and hurricanes becoming more frequent and therefore more likely to directly impact Long Island, this is no small concern.

The obscure law that Executive Levy has cited is "Chapter 695 of the Laws of 1881," which extends Suffolk County's jurisdiction over the "Waters of Long Island Sound." Although this facility would be built on the other side of Long Island, Levy believes he can convince a court that the act was intended to protect the tidal waters of Long Island.

My sense is that this facility is going to be built, but if Levy and others, including environmental groups, can put up enough roadblocks, it is conceivable that Broadwater will fold its tents and leave.

Not a bad thing, in this case.