March 8, 2005

Natural resources secretary John Hughes said that he, and probably the state administration, would support a proposal to have tanker ships carrying liquefied natural gas from Trinidad anchor in Delaware Bay and discharge their cargo.

"A monobuoy and a submerged line to carry it ashore is a reasonable compromise" in the controversy over the proposal to locate an L.N.G. terminal upriver, he said during a talk on Mar. 7 at the University of Delaware's Academy of Lifelong Learning.

Not only would Delaware authorities not oppose such an arrangement, but "we would be happy" if the liquid were pumped to a facility in southern Delaware to be converted back into gas for transshipment. But, he said in response to a question from the audience, "it would probably go ashore in New Jersey where the existing high-capacity pipelines are."

Hughes said, however, that a more likely scenario is that the dispute over whether a unit of British Petroleum should be allowed to build a terminal and conversion facility at Crown Landing, near Paulsboro, N.J., will be decided by Federal Energy Regulatory Commission.

Given that the need for more natural gas "is unquestionable, both regionally and nationally, ... we'll see natural gas facilities imposed on us at the federal level," he said.

"Crown Landing is just not a good place for it," he added, while indicating that there is little that Delaware could do in the event the federal commission rules in favor of the company's proposal. "That's how our federal system works. ... We'll have a lot of comments to make (about such a ruling), but, as good Americans, we'll abide by the law," he said.

Hughes has ruled that the B.P. proposal violates the Delaware Coastal Zone Act. It calls for the pier where the ships would dock to be located in Delaware water. The pier would extend into the river and it has long been established that Delaware's eastern boundary is the New Jersey shoreline. "The trouble is that most people in Jersey don't know about that," he said.

That is not the case in Delaware Bay, where the boundary runs down a north-south axis at its middle. In all likelihood, he said, a monobuoy there would be in Jersey water "where we'd have no jurisdiction," he said.

Hughes said he made his Coastal Zone ruling on the basis that B.P.'s planned operation is clearly a transfer of a bulk product and not manufacturing. As such, it is specifically banned by the state law, he said. "We have to call it what it is," he said.

The company has appealed Hughes's decision to the Coastal Zone Industrial Control Board, a state review agency.

Viewing the controversy as a public safety issue, Hughes acknowledged in his talk at the academy that refineries along the river "do a lot of things beyond adding nitrogen and [an odor-producing chemical]," which is what B.P. would do at Paulsboro to make the gas a commercial product. Moreover, he added, the ships that would bring it up the river in concentrated and supercooled liquid form "are extremely safe."

In that context he indicated that invoking the Coastal Zone Act could be considered contrary to a recognized public interest not only in having more fuel but having an environmentally preferable fuel. A B.P. facility nearby could, for instance, make it economically feasible for the Conectiv electricity-generating plant at Edgemoor to convert to using cleaner burning natural gas instead of coal. The electricity plant is "a pretty substantial contributor to our industrial pollution," he said.

"Whether it makes any sense or not, it's Delaware law [and] I'm responsible for upholding the laws of the state of Delaware," Hughes said. "I'm a pretty flexible guy, but not on that."

What's more, he added, the Coastal Zone Act -- which was enacted in the early 1970s at the height of the environmental movement in order to thwart further expansion of the oil and petrochemical industries along the Delaware River and is considered to be landmark environmental legislation -- holds special prominence for Delawareans, he said. "It's a law you don't food with if you have any sense at all of [political] longevity," he said.

Hughes said that the state Department of Natural Resources & Environmental Control will strongly oppose any effort to compromise that Coastal Zone Act. If the Federal Energy Regulatory Commission were to 'trump' the state law in this instance, it would not negate the law, he said. It would merely be a declaration that "the nation's need [for gas] is greater than a local or regional law."

While he said he recognizes a potential public safety issue in having the fuel transported up the river, he said that has to be viewed in relative terms. "What happens if a 747 plows into an L.N.G. tanker" differs from what would be expected in normal day-to-day movement of the ships.

Also, the idea of importing the gas is not necessarily objectionable. "The basic concept is a good idea," he said.

Hughes said that he has been in contact with Chesapeake Utilities, which is considering laying a pipeline under Chesapeake Bay to carry natural gas from Cove Point on the western shore in Maryland to link to an existing pipeline at Seaford, Del. "We've told them that, when it comes to Delaware permitting, we'll help you out," he said.

On another topic raised during the question period after his talk, Hughes indicated that he would favor taking a new look at Delaware's ban on 'trash-to-steam' incineration in light of new technology which has come about since the ban was imposed by law several years ago.

"You can't have [a combination of] no recycling, a freeze on Cherry Island [Landfill] height, refusing to site [a new landfill], and a ban on incineration," he said. "There is such a thing as technological improvement. America is starving for energy and filling its landfills with trash."

2005. All rights reserved.

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