February 8, 2005 |
2005-R-0133 | |
CONNECTICUT'S OPTIONS REGARDING PROPOSED LNG FACILITY | ||
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By: Kevin E. McCarthy, Principal Analyst | ||
You asked for a discussion of the options the state, and in particular the legislature, has with regard to the proposed liquefied natural gas (LNG) facility in Long Island Sound.
OPTIONS FOR LNG FACILITY
Broadwater Energy has proposed developing a facility in Long Island Sound to regasify LNG shipped from other countries. The facility would be connected by a new pipeline to the existing Iroquois pipeline, and the gas would then be shipped to Long Island, Connecticut, and other markets.
The fundamental issue in determining the options open to the state is where the facility will be located. Broadwater Energy has tentatively proposed locating the facility in New York State waters, south-southeast of East Haven, Connecticut. Company officials note that it is in the early stages of the siting process. It is conducting surveys of the Sound in an area approximately ten miles by ten miles, entirely within New York State waters. Based on the results of the survey, the company may propose siting the facility in the survey area or look at other areas.
If Broadwater proposes to build the facility in New York State waters and the facility’s activities take place in these waters, Connecticut will not have regulatory jurisdiction over the project. However, Connecticut could participate in federal and New York State regulatory proceedings on Broadwater’s application. Table 1 provides information on the federal proceedings and Table 2 provides information on the New York State proceedings. Most of the state proceedings would be held pursuant to federal law.
The issues for Connecticut under this scenario are (1) which proceedings to participate in and (2) how to address state concerns about the project’s potential environmental, public safety, and economic impacts. Connecticut legislators may wish to consult with their New York State counterparts with regard to participation in the various proceedings.
Table 1: Federal Proceedings for LNG Facility
Agency |
Permit/Approval |
Description |
Federal Energy Regulatory Commission |
Approval under Section 3 of the Natural Gas Act |
Needed to build and operate the project |
U. S. Coast Guard |
Terminal operations permit |
Needed to operate floating storage and regasification unit |
Army Corps of Engineers |
Wetlands and dredging permit |
Ensures proper management of impacts to wetlands and dredged material |
Coast Guard and Army Corps of Engineers |
Permit under Rivers and Harbors Act |
Ensures that facility operations do not interfere with other uses of the Sound |
Nat’l Oceanic and Atmospheric Administration (NOAA) |
Review of essential fish habitats |
Ensures consistency with existing plan |
NOAA and Fish and Wildlife Service (FWS) |
Review under Marine Mammal Protection Act |
Ensure that the project will not harm marine mammals |
NOAA and FWS |
Review under Endangered Species Act |
Ensure that project will not harm threatened or endangered species |
Table 2: New York State Proceedings for LNG Facility
Agency |
Permit/Approval |
Description |
Department of Environmental Conservation (DEC) |
Permits required under National Pollution Discharge Elimination System program |
Permits for storm water, wastewater, and hydrostatic test water associated with the project |
DEC |
Title V Air Quality permit |
Ensure that project meets air pollution regulations |
DEC |
New Source Review |
Ensure that project meets air emission standards for new sources of pollution |
DEC |
Clean Water Act review |
Ensure that (1) water temperature and volume changes caused by the project do not disrupt ecosystem and (2) water intakes meet the needs of threatened resources |
DEC |
Noise review |
Ensure that project construction and operations comply with state noise regulations |
DEC |
Water quality (section 401) certification |
Ensure that project does not degrade quality of water resources |
NYS Dep’t of State |
Coastal Zone Consistency determination |
Demonstrate that the project complies with state coastal policies |
State Office of Parks, Recreation and Historic Preservation |
National Historic Preservation Act review |
Ensure that project does not harm local cultural or historic sites |
Source: Broadwater Energy
If Broadwater Energy ultimately proposes to build the facility in Connecticut, rather than New York, waters, Connecticut will have a substantially wider range of options. Connecticut agencies (primarily the Department of Environmental Protection) would be responsible for conducting the reviews and issuing the permits described in Table 2. The legislature could provide guidance to the agencies on how to approach the application. However, the state could not supersede the affected provisions of the relevant federal laws, e. g. , Title V of the Clean Air Act.
The legislature could also amend CGS § 16-50i to give the Connecticut Siting Council jurisdiction over the entire project, if it is built in Connecticut waters. Under current law, the Siting Council has jurisdiction over gas pipelines, but not regasification facilities.
Another set of options revolve around the fiscal treatment of the project, including whether it would be subject to property and various state taxes and fees. OLR Report 2004-R-0962 describes how New York State is tentatively addressing these issues.
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