Is The Price of Gas Lower Than The Cost?

By Jarrett E. Chapin

Exxon’s $1 billion dollar LNG facility which would float 20 miles off the coast of New Jersey and 30 miles from Long Island has clean ocean advocates stirred up and reaching for their coastal regulations manuals. And their concerns are not unfounded, given the real risks which liquefied natural gas facilities pose. Quoted this week by the associated press, Jeff Tittell, executive director of the Sierra Club’s New Jersey Chapter expressed his support as well as his concerns about the volatility of liquefied natural gas. Tittell admitted to AP that the Sierra Club is “not opposed to liquefied natural gas ‘because we think that it’s a lot cleaner than coal’ and produces lower emissions of green house gasses.” However, if such a facility were to explode, said Tittell, “it would pretty much destroy everything within a mile.”

The concern expressed by Tittell and shared by many New Jerseyans is only one wing of the recent opposition to liquefied natural gas. Though some have communicated their fear of explosion as a fear of terrorism—some people think that liquefied natural gas facilities would be good targets for terrorist to blow up—concern alone has had little bearing on the future of liquefied natural gas in the state of New Jersey.

The second wing, the legal wing of opposition, has been much more instrumental in keeping liquefied natural gas companies out of New Jersey. Tellingly, describing the project to AP, Exxon stated they are expecting from the initial phase “a lengthy and rigorous permitting process.” Given the short history of rejected liquefied natural gas projects in this state, and considering that liquefied natural gas has similarly failed to get a foot hold almost everywhere else, it is easy to imagine how the “permitting process” is the bane of energy companies nationwide—excluding Louisiana. As the opposition to liquefied natural gas in New Jersey has been almost entirely tied up with the state of Delaware’s right to uphold its own state enacted permits, it seems only natural that gas corporations go to sea.

Hoping to avoid sovereign zoning disputes and homeland security concerns, Exxon has proposed to build its facility 30 miles from shore. However, distance alone may not satisfy the worries of ocean environmentalists who now seem to represent the only opposition to liquefied natural gas.
The New York investment firm otherwise know as The Sea Island Group is still fighting through the application process for its own stationary island. The Sea Island Group’s artificial island would cover an estimated 116 acres of sea floor which environmentalists say would detriment marine life as well as the terrain of the ocean bottom.

Cindy Zipf, Executive Director for the environmental coalition, Clean Ocean Action (COA) addressed Exxon’s recent plan in a press release this week noting, “Here’s another bad actor that wants to bring fossil fuels, pollution, and industrial development to our cleaner, healthier ocean. […] Exxon Mobil is known around the world for drunken sailors, massive oil spills, and destroying communities, such as in Prince William Sound, Alaska. This company’s track record is not one we would welcome to the Jersey Shore to manage hazardous material off our coast.”

David Byer, Water Policy Attorney for COA has recognized two reasons to be concerned, the first being that in permitting Exxon or the Sea Island Group to build “there is precedent, that the island is a starting point for developing the ocean for industrial sprawl.” Byers seconded Zipf by stating that Exxon is a bad actor with a poor record. If Exxon is permitted, in light of the incident in Alaska, to build a risky and publicly contested LNG facility in New Jersey it sends out a message that this “is not the public’s ocean, but the financers’.”

As both facilities are a fair distance away from state seaward boundaries, there may be difficulties in harnessing New Jersey’s political resources for the purpose of environmental protest. COA is currently researching the Deep Water Port Act (DWPA), an act which places the authority to license the operation or construction of deepwater ports into the hands of the Secretary of Transportation. Specifically, the DWPA is meant to provide a means of regulating the “location, ownership, construction, and operation of deepwater ports in waters beyond the territorial limits of the United States.”

The act guarantees the environmental and economic protection of “the interests of the United States and those of adjacent coastal states in the location, construction, and operation of deepwater ports.” Byer maintains that a successful implementation of the DWPA will require the association of New Jersey with the clause “adjacent coastal State.” Since Exxon has planned to run a pipeline from the facility to the Jersey shore, Byer noted “it seems likely that New Jersey will have a real voice as an adjacent coastal state.”

COA’s focus on the DWPA is most likely conjoined with the Clean Ocean Act (H.R. 2854) which endeavors to override Federal authority in matters of environmental import to New York and New Jersey. H.R. 2854 “Prohibits the Administrator of the Environmental Protection Agency, the Secretary of the Army, and all states from issuing a permit for ocean dumping, or establishing any new disposal site in the Zone, including under specified provisions of existing law.” The act also contains a provision which restricts “the discharge of a pollutant” into the specified zone.

This zoning strategy should amuse Delaware LNG opponents who have had so many problems maintaining their own thirty-year-old environmental zoning acts against LNG advocates who have since transfigured a sovereignty debate out of Delaware’s unwillingness to comply with New Jersey’s economic destiny.

In short, this legislative zoning approach seems to be on track, it has at least provided a convincing defense for Delaware in the past. If this legislation works, it should be due the fact that the facility is an actual danger to the environment as it is stated between both DWPA and the COA; we certainly can’t restrict every gas or industrial project that arises in the state. Yet, as precedent and thus the future of the New Jersey coast is at stake, we also must remember the price of gas.

Exxon and other energy companies may look to some alternate method of transferring their bulk products. Pending their ejection from New Jersey’s rivers and open seas, water may be out of the question. Maybe a hovering LNG facility? Perhaps there are fewer zoning restrictions in the ether above New Jersey. Excelsior!

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