by D. O'Larde

Created on: October 27, 2008   Last Updated: August 27, 2009

LNG is natural gas in liquefied form or natural gas supercooled to become liquid at -260 degrees F. This process called liquefaction reduces the volume of natural gas to more than 600 times, making it cost-effective to transport to distances where the use of a pipeline is impractical.

The case against liquefied natural gas in the Long Island Sound is about what would be the world's first offshore LNG terminal for tankers carrying LNG proposed by Broadwater Energy, a joint venture of TransCanada Pipeline and Shell Oil in November 2004.

Two months later, the environmentalists launched a campaign against the project just like they did in stopping a completed nuclear power plant from operating some twenty years ago. The opposition to the proposed LNG terminal project in the Long Island Sound was strongly supported by New York and Connecticut up to the U.S. senatorial level.

This is a classic political opposition by elected officials to the federal government and the energy industry. The federal government represented by the Federal Energy Regulatory Commission FERC, favors the building of offshore LNG terminals when it became known that similar proposals are being considered in California and Louisiana. The FERC commissioners are Presidential appointees and three of five members can be from the same political party.

The crux of the problem is the political party opposing the project are not so keen on supporting the independent authority of the Federal Energy Regulatory Commission to approve and regulate the construction and operation of LNG terminals. FERC exercised that authority when it approved Broadwater Energy's applications for permits to construct and operate an LNG storage and gasification terminal in the middle of the Long Island Sound and the 25-mile pipeline to connect to the existing gas line network feeding New York and Connecticut in March 2008.

In April of 2008, New York and Connecticut including others affected, asked the Federal Energy Regulatory Commission to conduct a new hearing on the applications for permits by Broadwater Energy. The request was rejected and set the stage for a federal court battle between local and state governments and the Federal Energy Regulatory Commission.

It was argued that the Federal Energy Regulatory Commission's authority to issue permits is premature. Federal law requires the host state to certify that Broadwater is in compliance with the Coastal Zone Management Act and Clean Water Act.

Broadwater decided to appeal the New York coastal zone consistency ruling to the U.S. Secretary of Commerce, who has the authority to override the ruling. The ruling from the Secretary is expected in early 2009, but with the real possibility of the legislative and the executive branch being dominated by the political party opposing the Long Island Sound LNG terminal project, it is fair to think that Broadwater cannot be that optimistic of a favorable approval.

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