June 28, 2008

More Bad News for LNG Plan

By Timothy C Barmann

The U.S. Department of Commerce denies approval of Weaver's Cove plan to establish an LNG terminal in Fall River.

The U.S. Department of Commerce yesterday upheld a decision by Massachusetts regulators to deny approval for the liquefied natural gas terminal planned by Weaver's Cove Energy LLC in Fall River.

The decision is another blow for the company, which has been battling widespread public opposition to the LNG plan, as well as a series of unfavorable decisions by state regulators and federal agencies.

Yesterday's decision was issued by the Commerce Department's National Oceanic and Atmospheric Administration.

Weaver's Cove had asked the department to overturn a decision by the Massachusetts Office of Coastal Zone Management that determined that the project was not consistent with the state's coastal management plan.

But the department upheld that determination.

"Based on information submitted during the appeal, the [Commerce] Department determined that adverse coastal effects -- particularly navigational safety concerns associated with delivering LNG to the terminal by tanker vessel up the Taunton River -- outweigh the national interest," the department said in its ruling.

"Navigational safety concerns were articulated in a U.S. Coast Guard report that concluded the Taunton River is unsuitable for LNG tanker traffic of the size and frequency proposed by Weaver's Cove," it added.

Weaver's Cove has proposed building a $550-million LNG import terminal in Fall River. In 2005, the Federal Energy Regulatory Commission (FERC) gave conditional approval of the project, contingent on the company obtaining approvals from several state and federal agencies, including the Massachusetts Office of Coastal Zone Management.

James Grasso, a consultant and spokesman for Weaver's Cove, said the company was "disappointed" in the ruling, but said it would continue pursuing the project both for the Fall River marine terminal, as well as a newer proposal to build an offshore berth in Mount Hope Bay.

"We continue to pursue the project, and we will continue to investigate and examine the documents to decide our next steps," he said.

"For some reason, people do not realize that we need this energy and Fall River and Somerset need all the benefits associated with this project," Grasso said. "Most importantly, LNG has a 60-year exemplary safety record that I would say compares to none other."

Jeff Donald, a spokesman for NOAA, said department decisions can be appealed by filing a lawsuit in U.S. District Court.

Another development that could jeopardize the project is an effort by the congressional delegations of Massachusetts and Rhode Island to include the Taunton River in the National Park Service's Wild and Scenic River system. Project opponents have said that such a designation could preclude the use of that waterway for LNG shipments.

On Wednesday, the House Committee on Natural Resources said it approved the legislation, but it must be accepted by the full House and Senate before the bill could become law.

In a separate decision issued yesterday, the FERC approved a request by Weaver's Cove to extend by five years the company's conditional permit to build a LNG facility in Fall River.

The commission approved the extension after it was requested by the company earlier this month. The permit issued by FERC to Weaver's Cove in 2005 was to expire in July 2010 and the company was required to have the facility built and operating by then.

Weaver's Cove said obtaining the necessary state and federal approvals was taking longer than anticipated and asked FERC to extend the permit until November 2015.

Rhode Island Attorney General Patrick C. Lynch and officials in Massachusetts said they opposed granting the extension because many of the permitting delays were the result of a finding by the U.S. Coast Guard that LNG tankers may not be able to safely navigate the Taunton River.

The commission did not offer an explanation for its decision.

"Based on the facts presented in your request, Weaver's Cove and Mill River are granted an extension of time until November 1, 2015, to complete their facilities and make them available for service," the FERC wrote in a letter to Weaver's Cove.

Mill River is the company that would build a pipeline to the terminal. [email protected] / (401) 277-7369

Originally published by Timothy C Barmann, Journal Staff Writer.

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