Carcieri calls on region for collaborative effort
With competing proposals for liquefied natural gas terminals across New England, Gov. Donald L. Carcieri is encouraging his fellow state leaders to work with southeastern Canada to increase the LNG supply without compromising public safety.
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During an energy summit convened by the General Assembly at the State House Nov. 30, state legislators received information packets that included materials about Carcieri’s regional approach to meet the state’s natural gas needs. The governor says New England states and southeastern Canadian provinces should collaborate to sate the region’s growing natural gas appetite.
“As a region, the governors have not reached a consensus [on how to increase natural gas supply], but I think there is agreement that we do need additional supplies and infrastructure in the region,” said John Shea, director of energy and environmental programming for the New England Governors’ Conference (NEGC), a Boston-based association chaired by Carcieri. The governors plan to meet with leaders from southeastern Canada in May, he said, and energy issues are expected be a key topic of discussion.
New England’s natural gas consumption is expected to grow 1.4 percent annually through 2024, according to a March study by the NEGC, surpassing the region’s current delivery capacity by 2010.
LNG – natural gas that has been cooled and condensed to liquid form to be more compact and easy to transport – provides 20 percent of New England’s natural gas, according to the NEGC.
According to the Federal Energy Regulatory Commission (FERC), there are at least seven new potential LNG facilities proposed for construction in New England. Neptune LNG and Tractebel LNG North America want to build an LNG terminal off the shores of Boston, and Northeast Gateway and Excelerate Energy have proposed an offshore station near the city as well. A third, onshore terminal has been discussed for Boston, as well as three sites in Maine. Another firm has plans for a terminal off the Connecticut coast in Long Island Sound.
FERC has approved only one facility, Weaver’s Cove Energy’s and Hess LNG’s terminal at Weaver’s Cove in Fall River. However, the project’s future is uncertain, as politicians from Massachusetts and Rhode Island – opposed to the site’s proximity to residential areas and other safety concerns – have appealed FERC’s ruling.
Carcieri has argued that building numerous LNG terminals is unnecessary. “It is generally recognized that two LNG … terminals for our region should be adequate to meet our … natural gas needs for the foreseeable future,” he wrote in a letter to the five other New England governors late last year.
It happens that two coastal LNG terminals are under construction in Canada. Irving Oil Limited and Repsol YPF have begun building the Canaport LNG terminal in New Brunswick, and Anadarko Petroleum Corp. is three months into constructing the Bear Head LNG project in Nova Scotia. Both facilities are scheduled for completion in 2008.
The governor has urged other New England governors and his state’s lawmakers to consider what he calls “the potential Canadian solution,” which entails expansion of regional pipelines to receive natural gas from the two facilities.
Gas from the two Canadian terminals would reach New England via the Maritimes and Northeast Pipeline. The 670-mile pipeline runs from Nova Scotia to Dracut, Mass., and belongs to affiliates of Duke Energy Corp., ExxonMobil Corp. and Emera Inc.
According to the Maritimes Web site, the owners want to expand the pipeline to address the Northeast’s growing demand for natural gas. The expansion would add 146 miles of pipeline to link to the two terminals, and the owners plan to apply to FERC early next year to get permits for the project.
The Canaport LNG terminal, located 65 miles from the U.S. border, will transmit most of its supplies to Atlantic Canada and northeastern United States, said Michelle Firmbach, a spokeswoman for Irving Oil. The facility will generate
1 billion cubic feet of natural gas per day, she said, but she didn’t know exactly how much will go to New England.
“It’s fair to say this project will provide significant amounts of natural gas to New England,” she said.
Marc Bellivieau, a spokesman for New Brunswick’s Department of Energy, said the two LNG terminals under construction in southeastern Canada are in industrial areas and enjoy substantial public support. “I think people are looking at it positively because of the spinoffs and jobs it could bring,” he said.
Others argue Canada is too far.
“There is an additional cost to bringing natural gas down from Canada,” said Thomas M. Kiley, president and CEO of the Northeast Gas Association (NGA), a Needham, Mass.-based trade group that represents energy companies in the region. Though the association endorses expanding pipelines to receive more natural gas from Canada, he said, New England needs its own terminals to maintain reliable supplies.
According to an Associated Press report last month, it costs $1.30 per million cubic feet to transport natural gas through pipelines in eastern Canada, more expensive than the 74 cents per million cubic feet to send it from the Gulf Coast, where the majority of the region’s gas supply originates.
But Carcieri spokesman Jeff Neal said the cost differential will fall once the Canadian facilities come on-line.
According to the NGA, New England currently receives about 80 percent of its natural gas from outside sources that include the Gulf Coast, western Canada and eastern Canada. Much of the balance of New England’s supply comes from the region’s only LNG terminal in Everett, Mass., from which truck shipments go to an LNG storage facility at Providence’s Fields Point.
KeySpan Corp., the Brooklyn, N.Y.-based owner of the Providence facility, has continued to pursue permits to upgrade the site to receive shipments via marine tanker, following FERC’s denial of the initial proposal in July. The agency has agreed to consider a second hearing despite its ruling that the facility, which would keep its 500-million-cubic-foot storage tank, would fail to meet current safety standards.
With the Providence project at least temporarily derailed, Rhode Island and Massachusetts political leaders have harnessed their energy to combat plans for the Fall River terminal. The Naval Undersea Warfare Center in Newport has joined the fight as well, saying that LNG tankers traveling past it on Narragansett Bay could adversely affect underwater tests of submarines, sonar systems and torpedoes.
