A New England business-trade organization announced yesterday that it supports the development of new LNG facilities in the region to help stabilize the rising costs of energy.
A New England business-trade organization announced yesterday that it supports the development of new LNG facilities in the region to help stabilize the rising costs of energy.
The New England Council issued a report that said high energy prices are hurting the regional economy and that the time to add new LNG infrastructure is now.
"Given the lead time it takes to permit and construct new natural-gas infrastructure facilities, actions deferred or undertaken now will significantly influence the region's economic growth for years to come," said James T. Brett, president and chief executive officer of the council.
The New England Council represents the interests of large institutions and businesses, including colleges, hospitals and manufacturers. It focuses on federal issues that affect the cost of doing business in New England, such as transportation and energy, Brett said in an interview.
But the council stopped short of recommending any of the particular LNG proposals that have been put forth in New England.
Two have been proposed locally. KeySpan LNG has proposed a $100-million expansion of its Providence facility so it can receive deliveries of fuel by ship instead of by truck. Weavers Cove Energy and Hess LNG have proposed building a new LNG terminal on a 68-acre site in the northern section of Fall River.
Both proposals are opposed almost unanimously by elected officials in Rhode Island and Massachusetts.
Among the arguments against the KeySpan proposal by Attorney General Patrick C. Lynch and Providence Mayor David N. Cicilline is that it will hurt economic development in areas along Narragansett Bay.
Brett said he was not aware of that argument against LNG proposals. The report, he said, looked at how the region's economy as a whole would benefit from additional LNG.
The report said that additional supplies of natural gas are needed before 2010 for three reasons: a growing reliance on the fuel to generate electricity in New England; high and volatile prices for natural gas, which put the region at a competitive disadvantage; and the region's constrained pipeline system, which is already operating at 90-percent capacity.
The council's report also said that alternative ways of getting more natural gas to the region, such as building and upgrading the pipeline infrastructure, would likely mean expensive investments that would ultimately drive up the cost of natural gas. And the permitting and construction lead time is several years, on average.
Conservation will slow demand growth, but it won't make up for the natural-gas supply shortfall the region will face before 2010, the report said.
Delays in making decisions about LNG proposals will be costly, the report added. It estimated that a two-year delay in construction of new pipeline capacity or LNG facilities will cost New England customers about $3 billion by 2010 in higher prices.
The study does not discuss some of the safety concerns raised by opponents of LNG facilities, such as the potential for terrorist attack on an LNG tanker. The report said the council is "confident of LNG technology's overall safety" because of its track record, positive judgments from independent assessments and ongoing "rigorous" regulatory oversight.
"It is the responsibility of this open (permitting) process to assure safety, assess environmental issues and equitably resolve local concerns on a case-by-case basis."
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Source: Knight Ridder/Tribune Business News
