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LNG Supplies, Solutions Lacking: Regional Planning Tough to Execute, Top Regulator Says

Posted September 26, 2006 by

New England badly needs new supplies of liquefied natural gas, the country’s top energy regulator said yesterday, but he’s skeptical of calls for regional decision-making about where to put controversial LNG unloading and storage facilities.

Joseph T. Kelliher, chairman of the Federal Energy Regulatory Commission, speaking at a Boston energy conference, said the region came close to having to shut off gas customers involuntarily two winters ago to ration scarce supplies.

“You were saved last winter by the fact that we had the warmest January in 112 years,” he said. “You can’t base your policy on the assumption that that will recur. New England does need new energy supplies. You’re at the end of the pipeline.”

With nearly a dozen proposals for LNG plants pending from Eastern Canada to Rhode Island, many local officials and environmental activists have said Kelliher’s agency should get more involved in shaping a regionwide planning process for how many plants need to be built, and where. Many proposals, such as one in Fall River, face fierce opposition over fears that a terrorist attack or an accident involving an LNG tanker or storage plant could unleash a catastrophic firestorm, killing thousands of people.

“Regional siting has some initial appeal,” Kelliher said.

But in other instances, such as finding places to store low-level radioactive waste, it has either failed to get anything constructed or has led to states due to get unpopular facilities reneging on their commitments to participate in multi-state planning.

Regional siting is difficult. It hasn’t actually worked in other contexts,” Kelliher said.

He added that the FERC can’t fill the role of regional decision-maker because “We’re not an economic regulator when it comes to LNG. We are purely a safety regulator.”

Besides the Weaver’s Cove LNG facility proposed for Fall River, other LNG proposals in the region include:

  • Converting Outer Brewster Island in Boston Harbor from a park into an LNG terminal.
  • Building two offshore unloading facilities about 10 miles southeast of
    Gloucester.
  • Erecting a facility on Passamaquoddy Indian tribal land close to the
    Maine-New Brunswick border.
  • Irving Oil is currently building an LNG plant in St. John’s, New Brunswick,
    near a pipeline that feeds New England.

Kelliher spoke at an energy conference at the Marriott Long Wharf Hotel sponsored by Independent System Operator New England, which runs the six-state power grid.
Peter J. Howe can be reached at howe@globe.com.

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