Why Did Broadwater Lose?

In the Bush era when citizen protests go unheard in Washington, it is truly remarkable that the Broadwater LNG project failed. Federal regulators had, as usual, ignored citizen protests and ruled in favor of mega-business interests. But Broadwater lost locally and regionally. You only had to be at Sunken Meadow last week when Governor Patterson nixed the project to see that just about every state, county and local politician was there to support what they clearly saw as a popular decision.

News stories gave short shrift to the reasoning behind the decision, which was a finding by the New York Secretary of State that Broadwater was inconsistent with the state's coastal zone management plan. That finding said the project violated 6 state policies, including "sustainable use of living marine resources" and fostering a pattern of development in the Sound that "enhances community character" and "preserves open space," among other things.

Nevertheless, the decision was political, and proponents see the loss as another case of NIMBY-ism. John Hritcko, Jr., Broadwater VP, told me just before the decision last week that "with any energy infrastructure project--whether LNG, a pipeline or a windmill--you're going to have trouble siting it." And it's true that some of the local politicos as well as Adrienne Esposito, director of Citizens Campaign for the Environment, spoke favorably about another LNG project that would involve construction of an artificial island in the Atlantic Ocean off the New Jersey/New York coasts. But environmental groups in New Jersey have serious concerns about that project as well.

So what was the political calculus behind the Governor's decision? Why was the opposition successful in the face of Broadwater's intensive, professionally managed campaign for approval? I'd like to invite everyone who cared about Broadwater to offer their own ideas about why it failed. If not NIMBY, then what? How was the opposition able to kill Broadwater?

Will Broadwater Walk Away?

With Govenor Patterson expected to reject Broadwater this afternoon, the question is whether the company will walk away or continue fighting to build the project.

Yesterday, I posed that question to Broadwater Energy's Regional Project Director, John Hritcko. We were sitting around a polished wood conference table at the company's Riverhead offices just off Old Country Road behind the Taco Bell.

"Until we see the decision and the basis for it, we can't decide," said Hritcko, noting that the company had just filed a new response to 17 environmental shortcomings pointed out by the state's Department of Environmental Conservation. The company may appeal if it believes "we can work with it," but would withdraw "if you don't think you'll ever reach agreement."

The appeal would be made to the U.S. Secretary of Commerce, who would determine whether New York's decision is consistent with the requirements of the Coastal Zone Management Act. New York has never had such a decision overruled, and Adrienne Esposito of Citizen's Campaign for the Environment believes the state would defend itself vigorously if challenged.

If the leadership does decide to withdraw, it will be a testimonial to the strength of public concern about Long Island's environment and the gut-deep understanding of the value of Long Island Sound to all of us. Broadwater pulled out all the stops to gain approval, as Karl Grossman points out in his latest column in East End newspapers. Former elected officials including even Rudy Giuliani couldn't throw enough political weight to override the opposition, even with skilled PR help.

The good news is that, unlike LILCO, Broadwater can't walk away and leave Long Islanders holding the bag. I'll never forgive the former LILCO execs for ordering a low-power test at Shoreham just before they were forced to give up on the project. With that low-power test, they were able to move more of the cost of the plant into the rate base for computing what we all pay for electricity, thus driving up our rates. And, at the same time, they contaminated the facility at Shoreham with radiation so that it became a hazard, unusable for other purposes, and requiring security measures for generations to come.

This time, at least, Broadwater's parent companies, Shell and TransCanada, will have to eat what they spent while underestimating the passion of Long Islanders for our environment.

Cordaro: Broadwater opponents "emotional & hysterical"

Former LILCO engineering veep Matthew Cordaro didn't like it when I challenged him to prove that the Northeast needs not only the Broadwater Liquid Natural Gas project proposed for Long Island Sound but also 2 others that could be put in the Atlantic Ocean south of Long Island.

These days, Cordaro inhabits the world of academia as the head of Long Island University's Center for Management Analysis, and Newsday and other news media quote him as an objective expert on Broadwater.

When I told him that his projections for strong demand growth are contradicted by relatively low estimates made by federal agencies, NY State and Keyspan, he complained that I was debating him. But he finally explained his demand prediction of strong demand this way: "It's just knowing. My information goes beyond what's being projected." The Northport and Port Jeff electric plants would need lots more gas to switch from oil, he said, a desirable change because it is less polluting. I said a spokesperson for Keyspan had just told me they were already using gas at these plants because it's currently cheaper than oil, so where's the need for dramatically more supply? (They are capable of using either fuel, and make the decision based on price.)

He then talked about the fact that 2/3 of the homes on LI (and much of the Northeast) are heated by oil, and that when we all switch, we'll need lots more natural gas. I reminded him that this would require homeowners to invest in expensive new heating equipment, not something most folks will do unless it's cost-justified. Well, he said, he is talking about a long-term change. Indeed.

I asked him what he thought about U.S. Rep. Tim Bishop's idea that a national commission should decide which of the 40 new LNG terminals proposed nationwide should be built, rather than letting the "market" decide. Not necessary, he said, because private companies "wouldn't build these facilities if they weren't sure they needed them," and, anyway, "if they want to overbuild it's to the advantage of the consumer." But what of the downside, to the enviornment of the Sound, to the fishing industry, etc.?

"The downside is minimal," he contended.

I asked him if he is a paid consultant for Broadwater, and he insisted that he receives no money from them.

"My whole motivation is to prevent another Shoreham, and for Long Island not to shoot itself in the foot again. Everyone had the same kind of objections based on emotion and hysteria that caused Shoreham to be shut down."

Obviously, Cordaro is unrepentent about the Shoreham fiasco that has cost, and still is costing Long Islander's billions of dollars. It seems we simple folks just worry too darn much about fish and the people who catch them for us, and about our right to have a say over public property and what is done there. We should just leave our energy decisions to experts like him.

Natural Gas Gone Wild: Construction Boom Biggest in 60 Years

Yes, it surely is ironic. A few years ago when companies like Shell Oil and Chevron Texaco made plans to build 47 new Liquid Natural Gas terminals, it seemed that domestic supplies would be short.

But domestic producers also saw the need and moved to meet it.

The result is the biggest construction boom in natural gas infrastructure in the Southeast/Gulf Coast region since the late 1940s and early 1950s. (This region is the hub of major pipelines that move gas all over the country, including the Northeast) According to a report from Natural Gas Intelligence Press, there are 25 gas pipeline projects under way and 11 storage projects. The storage is being built because now there is an expectation of a surplus of supply coming from domestic operations and just four new LNG terminals in the area.

All of this is causing turmoil in the industry and is expected to bring about volatility in prices and other effects.

This underscores, once again, the madness of not having a coherent national energy policy.

It also highlights the question of whether there is really any need for Broadwater.

As I've written in earlier posts, overbuilding of LNG terminals is expected to leave them operating at below 50 percent capacity for years to come

New Gas for NYC/LI Ready Without Broadwater

While everyone was paying attention last week to federal approval for the Broadwater Liquid Natural Gas terminal, news about guaranteed expansion of natural gas supply to our region went unnoticed.

The same federal agency that approved Broadwater also gave a green light to the Iroquois Pipeline company to expand its capacity and deliver 50 percent more natural gas--that's right, 50 percent--to Keyspan for Long Island, and Con Edison for the city.

The Federal Energy Regulatory Commission (known lovingly as FERC) told Iroquois it could go ahead and increase pipeline capacity so that it could add 200 million cubic feet a day to Keyspan's system and 100 million to Con Edison's. This was confirmed to me by Ruth Parkins, spokesperson for Iroquois. Delivery will start November 1 for most of it, with the rest phased in by November 1, 2009.

That's 30 percent of what Broadwater says it will deliver to the 1,200-foot-long, 200-foot-wide terminal it proposes to plant in Long Island Sound, IF it can get the supply. The federal Energy Information Administration's energy outlook for 2008 says supplies of LNG will be so tight in years to come that the terminals already existing or under construction, not including Broadwater, will run at under 50 percent capacity. (See previous post on Broadwater.)

The Iroquois expansion does nothing to disrupt the environment, boating, etc., etc., and expanding pipelines is exactly the remedy for expanding energy supplies supported by Connecticut's attorney general, governor and lawmakers.

Exposed: Little Demand, Little Supply for Broadwater LNG

The lead came to me from a sailor. I was looking for information about what it would be like to have a massive Liquid Natural Gas terminal in Long Island Sound, so I called Tom Cox up in Gloucester, Massachusetts, to ask what happened to boaters when 1,000-foot LNG tankers pass through Boston Harbor.

Cox is a frost-biter, one of those addicted sailors who risk their skin every winter by racing around the harbor in small boats. He told me that the tankers regularly disrupt the races. He and the other sailors have to steer away from the safety zone imposed by patrol boats trying to protect the tankers against a terrorist attack. More about that later.

But Cox really got my attention when he told me that he trades in stocks and commodities, including natural gas. “The really irksome thing to me,” he said, “is that natural gas is very abundant in the U.S.”

What’s that? You mean we don’t really need the natural gas that backers of the Broadwater LNG terminal in the Sound say we do? The backers have claimed—and the Federal Energy Regulatory Commission has just agreed-- that our region needs the terminal to meet our growing needs.
But if there’s plenty of gas in the U.S., why do we need to:

• become newly dependent on foreign supplies?
  
• give up public property, a piece of precious Long Island Sound?
• allow 1,000-foot ships to risk disaster entering the Sound the through its perilous mouth, the narrow, rocky channel known as The Race? (These tankers, by the way, run on one of the most polluting forms of petroleum and will be traveling thousands of miles across the oceans.)

These questions sent me on an information dig, and what I’ve found out boggles the mind: not only is the predicted growth in demand for natural gas over the next 20 years quite modest, but the supply of gas for the Broadwater terminal—and the others proposed for the East Coast—will be so low that they won't be able to operate at even 50 percent capacity.

These predictions come from the federal Energy Information Administration (EIA), whose job is to develop this sort of information to help guide lawmakers and regulators. On March 4, the administrator of the EIA, Guy Caruso, testified (click on the link to a pdf of his testimony) before a U.S. Senate Committee that natural gas consumption is expected to rise 10 percent from 2006 levels by 2016, and then to decline. By 2030, the agency predicts, consumption will be up less than 5 percent over 2006 levels.

What about specifically in New York? The state’s energy plan does predict growth in demand of about 1.5 percent a year, particularly if electric utilities switch to gas from oil to cut pollution and greenhouse gases. But it also says this growth can be met by increased capacity of the pipelines which supply our area. In fact, much of the pipeline expansion predicted in the 2002 plan (which has not been completely updated) has already occurred or is in process.

As for supply, Caruso gave an assessment for the six new LNG terminals in the U.S. already under construction (four along the Gulf Coast and two near Gloucester, Massachusetts). Without even considering the additional supply needed for Broadwater should it be built, Caruso said that “given global LNG supply constraints” LNG import facilities in the U.S. will function at “below 50 percent” capacity through 2030.

To my knowledge, Broadwater officials have never addressed this stunning conclusion, choosing instead to bash opponents for—how predictable—unnecessarily exploiting and inflaming public fears.

Obviously, the Federal Energy Regulatory Commission (FERC), which yesterday gave approval for Broadwater, is not on the same page as the EIA. Other entities, however, have considered these basic questions of supply and demand in opposing Broadwater. Among these is the LNG Task Force created by Connecticut Governor Jodi Rell. This bipartisan group has charged that FERC “irresponsibly” concluded that Broadwater is the only option for supplying additional natural gas to New York and Connecticut. As Tom Cox had inferred, and the task force made explicit in a letter to New York’s new governor, David Paterson on March 13:

There are viable alternatives to provide New York with the natural gas it needs and these alternatives will be up and running well before Broadwater is scheduled to be on line…FERC disregarded any actual or any potential increase in the natural gas supply resulting from upgrades to the existing pipeline system and/or from the other new LNG facilities.

You’d think this information, plus the EIA’s predictions of slow demand growth, would have given FERC good reason to be very dubious about Broadwater’s effort to take over public waters of Long Island Sound. But when looking at alternatives, the agency made sure its finding would favor the project by considering only other options that could also deliver a billion cubic feet of new gas to the region. Thus, the readiness of the Iroquois Pipeline company to add 400 million cubic feet of supply wasn’t taken into account. (The Iroquois Pipeline terminates on Long Island and supplies Keyspan and Con Edison.)

Why not? Because, once again the Bush Administration and its minions in the federal agencies are allowing the big energy companies to set U.S. energy policy. Even though the market for oil and gas is dominated by a handful of enormous companies, the Bushies act as if true competition were at work, and that the imaginary free market can magically make better policy than we actual humans.

As for the perils of LNG terminals, Richard Clarke, the former anti-terrorism adviser to Bush, has said that the mammoth tankers might as well have targets painted on their sides as they traverse narrow inlets like Boston Harbor and the mouth of Long Island Sound. An October, 2005 article in a local Massachusetts newspaper, SouthCoast Today, reported that “Boston officials cross their fingers when the 1,000 foot tankers pass through the harbors, fearing an accident or a terrorist attack on a loaded vessel could produce a conflagration that incinerates businesses and residents alike up to one mile away.”

Broadwater backers point out correctly that LNG does not explode and that even if it should spill and burn, the Broadwater terminal would be about 10 miles off both the Connecticut and Long Island shores. Of course, any boaters or fishers who might be nearby at the time would be toast. But the tankers will be less than a mile from Fishers Island when they enter the Sound through the Race, which takes its name from the turbulent rush of water that spills in and out of the Sound with every tide.

If a tanker were simply to lose steerage—as happened not long ago in Boston Harbor—or run aground in the Race—it would block all sizable commercial vessels from entering the Sound. (The only other way in, at Plum Gut, is too narrow for such large vessels.)

The next step forward for Broadwater would be approval by New York Governor Paterson, but no matter what he decides, litigation will tie up this project for a long time to come.

I can only hope that he will understand that what is at stake here. Otherwise, the Bush Administration, this time in the guise of FERC, will again have thumbed its nose at the public while ignoring the best supply and demand predictions of its own sister agency. Broadwater Energy is a partnership of TransCanada, a pipeline company, and Shell Oil. Their fingerprints are all over FERC’s biased decision to grant the project a permit. ##