LNG Plant Planned for Fall River, Rhode Island

Proposal jumps another hurdle after report from federal regulators

The proposal to build a new terminal for liquefied natural gas in Fall River got a major boost yesterday from a key report by federal regulators that concluded the facility could be operated safely and would not harm the environment.

But a separate report found that a proposal to expand a Providence LNG facility would not meet current safety standards, casting doubt on that project's future.

The two reports, called Final Environmental Impact Statements, were issued by the staff of the Federal Energy Regulatory Commission. The FERC is charged with evaluating and approving onshore LNG projects.

The reports will guide the FERC's four commissioners when they vote on the Providence proposal by KeySpan LNG L.P., and the Fall River proposal by Weaver's Cove Energy.

KeySpan has proposed a $100-million upgrade to its LNG facility in the Fields Point area so it can accept deliveries by tanker. Right now, the 600,000-barrel LNG tank is filled by truck.

Weavers Cove Energy and Hess LNG have proposed building a new LNG terminal on a 73-acre industrial site in the northern section of Fall River.

The FERC report on the KeySpan proposal said a "significant issue" with the project was that it would not comply with current safety standards.

"KeySpan LNG has not provided any data to show that the proposed import terminal can be brought into compliance . . .," the report said.

However, the report also said that if KeySpan could bring its facility into compliance, the proposed facility could operate with "limited adverse environmental impact."

The report on the Weaver's Cove project was more favorable.

"We conclude that if it is constructed and operated in accordance with Weaver's Cove Energy's proposed mitigation and our recommended mitigation measures, the proposed action would meet federal safety standards, [could] be operated safely, and would have limited adverse environmental impact," the report concluded.

Elected officials in Rhode Island and Massachusetts, who almost unanimously oppose both projects, welcomed the conclusions of the KeySpan LNG report and questioned those of the Weaver's Cove analysis.

The two reports are a "split decision" for Rhode Island, said Attorney General Patrick Lynch, one of the more outspoken opponents of both proposals.

"FERC has confirmed what we've been saying all along -- that KeySpan's ill-conceived proposal represents a substantial change in the use of the existing facility," and that complying with current safety regulations is "unfeasible."

"The threat from an LNG project in Fall River is almost equally dramatic to our Ocean State," he said, because LNG tankers destined for Fall River would travel 26 miles through Narragansett Bay and Mount Hope Bay.

Fall River Mayor Edward M. Lambert Jr., who's been battling the Weaver's Cove project for years, said the favorable report was not unexpected because FERC has "taken on the role of cheerleader for the energy industry."

He vowed to continue to fight, calling the project "not only dangerous for Fall River and the surrounding area, but also [one that would] set bad precedent for other communities around the nation."

Providence Mayor David Cicilline said the KeySpan report was "good news . . . but we're going to continue to express our opposition very strongly."

Governor Carcieri said he hoped the report on the KeySpan project would "put an end to KeySpan's efforts to build a marine terminal in the Port of Providence."

About the Weaver's Cove report, Carcieri said: "It does not appear that FERC sufficiently took into account the safety and security issues associated with bringing large amounts of liquefied natural gas through coastal waters."

East Providence Mayor Joseph Larisa Jr. said the KeySpan report was "tremendous news. . . . If not the death knell, it's a substantial impediment to the expansion of that facility."

U.S. Sen. Jack Reed questioned the FERC staff's endorsement of a Coast Guard security plan for the Weaver's Cove project. Part of the plan includes Coast Guard boats protecting LNG tankers as they enter Narragansett Bay.

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