From: Tom Incantalupo, Newsday, Melville, N.Y.
Published December 1, 2004 12:00 AM

Group Concerned about Legislation's Wording, its Affect on Energy Facilities

Dec. 1—A public advocacy group founded by Ralph Nader is warning that language quietly added by Washington lawmakers last month to appropriations legislation endangers state and local influence on the siting of energy facilities within their borders, such as the $700-million floating natural gas terminal proposed for eastern Long Island Sound.

Meanwhile, some industry experts are questioning the need for the more than 30 liquefied natural gas terminals proposed in the United States, many of which are controversial, although demand for natural gas is rising. Four liquefied natural gas terminals are in operation now.

And the Federal Energy Regulatory Commission is expected within a few days to formally put out a call for public comments on the Long Island Sound proposal, an agency spokeswoman said.

The Nader group, Washington-based Public Citizen, said the language inserted by House-Senate conferees into a $388-billion omnibus spending package is aimed at clarifying jurisdiction over energy production facilities.

Tyson Slocum, research director for the Nader-founded Public Citizen's energy program, says it appears to be in response to a legal challenge by California's Public Utility Commission to the federal government's authority over such facilities, a dispute that arose in connection with an liquified natural gas terminal proposed onshore at the port of Long Beach, Calif.

The conferee report says, "Because LNG liquified natural gas terminals affect both interstate and foreign commerce, LNG facility development requires a process that also looks at the national public interest, and not just the interests of one State ... Any dispute of LNG siting jurisdictional authority now will be counterproductive to meeting our natural gas needs in the future."

Slocum contends that while the language does not change federal law, it could hobble efforts by states and localities to influence the siting of energy production facilities within their borders.

"It sends a clear signal to federal judges," he said. "It's definitely aimed at chilling efforts by states to have adequate say in these matters."

Also upset about the language is Patrick Lynch, attorney general of Rhode Island, where a proposal is being considered for a shorefront terminal that a Lynch spokesman says is within a few hundred yards of I-95 and within half a mile of a major hospital and a densely populated neighborhood.

"Such language is a direct usurping of a sovereign state's rights and ability to control its own destiny," Lynch wrote in a Nov. 26 letter to Rep. Patrick Kennedy (D-RI.), seeking his intercession.

The Long Island Sound proposal, by Broadwater Energy Corp. of Houston is for a 1,200-foot-long terminal moored in New York waters midway between New Haven, Conn., and Wading River. The facility would be operating by 2010, off-loading liquefied natural gas from ships.

Promoters say the gas is needed to meet rising demand in the New York area.

Monday, Broadwater won approval from the Federal Energy Regulatory Commission to use a "pre-filing" process in which the agency studies the project and seeks public comment on it before a formal application is made by Broadwater.

Robert Ineson, a natural gas expert based in Houston for the consulting firm Cambridge Energy Research Associates, said rising natural gas prices and demand have made imported liquefied gas competitive, despite the extra cost of the liquefaction, which is necessary to reduce the volume of gas for shipping.

But, he said, terminals now under construction or proposed in the United States, Canada and Mexico would add 40 million cubic feet a day of capacity, almost four times what his firm projects will be needed by 2010.

"Certainly," he said, "not all of them are needed."

Few local groups have expressed opposition to the Broadwater project, but several have raised questions about its environmental effects and potential safety and security risks. Said president Thalia Bouklas of the Affiliated Brookhaven Civic Organizations, "We'd like to have some kind of forum to hear people on both sides of the issue."

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© 2004, Newsday, Melville, N.Y. Distributed by Knight Ridder/Tribune Business News.

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