NY Governor Chooses Safety Over Savings In Rejecting LNG Terminal

New York Gov. Andrew Cuomo evidently chose environmental protection and safety from terrorists over energy savings when he denied a proposal to build a liquefied natural gas (LNG) terminal off Long Island and New Jersey.

Liberty Natural Gas LLC had planned to develop the deep-water docking station, called Port Ambrose, situated 19 miles off Jones Beach on the southern coast of Long Island and 29 miles east of Long Branch, N.J. The company said the port would allow it to feed gas into the local energy pipeline, thereby lowering the cost of home-heating bills in the New York area, now among the nation’s highest.

Liberty had sought permission from the U.S. Maritime Administration to develop Port Ambrose, but under federal regulations any approval must come from the governor’s neighboring states. A veto by one would kill the deal altogether. Related: Oil Tankers Are Filling Up As Global Storage Space Runs Low

Cuomo said security, both from violent weather and terrorists, trumped all other considerations when he made his decision. He pointed to the damage that Hurricane Sandy wreaked on the New York-New Jersey area in 2012, and noted that various militant groups have threatened to attack LNG facilities.

“My administration carefully reviewed this project from all angles, and we have determined that the security and economic risks far outweigh any potential benefits,” he said in a statement. “[T]he potential for disaster with this project during extreme weather or amid other security risks is simply unacceptable.”

Cuomo said he was also concerned that the LNG terminal might affect commercial fishing off the Long Island coast and could impede an offshore wind farm being developed by the New York Power Authority. His rejection follows a similar action by New Jersey Gov. Chris Christie in 2011. At the time. Christie said he’d oppose such a project for as long as he was the state’s chief executive. Related: Is The Oil Industry Really Subsidized?

The Port Ambrose project would have included two buoys fixed 30 feet above the floor of the Atlantic Ocean. A maritime tanker carrying LNG would then connect to one of the buoys and, over several days, heat the LNG to retransform it from liquid back to gas, then inject it into the buoy, which would have been connected to the gas pipeline serving the New York metropolitan area.

Liberty said each LNG delivery would supply an average of 400 million cubic feet of natural gas per day, enough to accommodate 1.5 million homes. This would save New York-area consumers millions of dollars in energy costs, it said, and help reduce the region’s reliance on coal and oil, which emit more pollutants than gas when converted into energy.

Liberty CEO Roger Whelan said he was “disappointed and very surprised” by Cuomo’s decision. And on its website promoting development of Port Ambrose, the company said it believed concerns about the risks weren’t justified, particularly regarding violent weather. Related: U.S. Oil Production Holding Its Own, Which Can Only Mean One Thing…

The site says that “the buoy and ship system is designed and proven to withstand rough storm and sea conditions, including hurricane conditions” because the ship could disconnect from the buoy-and-pipeline network as the storm approached and head out to sea to avoid hard weather.

Opponents of the terminal said the project, if approved, could have led to a rise in exports of U.S. natural gas, thereby increasing the extraction of gas from shale through hydraulic fracturing, or fracking, a practice that many say is bad for the environment.

Sean Dixon, a staff attorney for the environmental group Riverkeeper, said, “Saying no to Port Ambrose means saying yes to our fisheries, offshore wind power, shipping and vital protection for the ocean.”

Cuomo evidently agreed. He said he couldn’t simply accept Liberty’s word that a storm like Sandy couldn’t pose a serious threat to an LNG terminal. “I’ve been around too long, I’ve heard that one too many times, ‘Don’t worry, nothing can happen,’ ” he said. “Yeah, that’s when I worry.”

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:

• Oil Storage Levels Point To Longer Downturn
• OPEC Production By The Numbers
• Still Plenty Of Interest In Offshore Oil And Gas Exploration