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Off Shore LNG Is Dead Gas Walking – But Will Christie Walk The Walk?

Sargent at Arms try to seat a packed labor crowd at Senate LNG hearing.

Sergeant at Arms tries to seat a packed labor crowd at Senate LNG hearing.

“Deputy Christie spokesman Sean L. Conner said, We’re against all LNG.”  Bergen Record, April 23, 2010


Yesterday, the Senate Environment Committee either made a huge political blunder or they walked into an avoidable ambush. 

I wonder whose advise legislators were listening to?

The firestorm was in response to non-binding Senate Resolution 85, opposing the development of liquefied natural gas (LNG) facilities off the New Jersey coast.

The rhetoric was heated.

Some environmental groups, such as Clean Ocean Action (COA), have dubbed off shore LNG “insanity Island” and a huge threat to the ocean, natural resources, and fisheries. 

COA’s testimony conjured up the energy equivalent of “an invasion by a foreign country”. COA warned that LNG facilities would become targets for terrorists and that LNG imports would come from “middle eastern” countries, including Yemen. COA warned legislators that off shore LNG would increase “foreign dependence” and undermine Homeland Security and “energy independence”. They said an LNG tanker had the explosive power of “55 Hiroshima bombs“.  (I almost felt as if a 9/11 Mosque alert was next!).

COA managed to say all this in support of the Resolution, while giving Governor Christie a pass on his campaign pledge and Earth Day promise to kill off shore LNG.

The lobbyist for one LNG project developer, Liberty Energy, fired back. He claimed that the COA testimony was flat out “false and misleading” and then proceeded to rebut via a “Fact versus Fiction” factsheet. He said his $800 million investment would create 1,100 jobs and have no impact on the ocean or create any emissions to the environment.

Organized labor was out in force, and framed the issue as a “vote against jobs”.

But why would anyone needlessly put themselves in such a position, especially under current economic conditions and unemployment rate?

I say needlessly for several important reasons:

1) The legislature has no role in off shore LNG. The LNG permit review and approval process is pre-empted by federal law.

2) Even if the Legislature had jurisdiction, a Resolution is a non-binding and essentially meaningless symbolic gesture. No gain, lots of pain.

3)  The ONLY NJ official with a role in LNG approval process is the Governor, who has a veto power under federal law.

4) Governor Christie has pledged to use his veto power and already has come out in strong opposition to off shore LNG.  

To high praise by COA and glowing press coverage, during Earth Week, Governor Christie held a big event down the shore (at a private beach club) to announce:

Gov. Christie issues potentially fatal blow to liquified natural gas proposals
Friday, April 23, 2010
The Record
Governor Christie used Earth Day on Thursday to issue a potentially fatal blow to private investors who want to build a $2.2 billion artificial island 20 miles off Sandy Hook for ships to unload liquefied natural gas.
 Christie expressed opposition to any facilities for liquefied natural gas off New Jersey’s coast, saying they “are not the answer for New Jersey’s needs.”


 Asked for clarification of the governor’s comments, deputy Christie spokesman Sean L. Conner said, “We’re against all LNG.”

So why would a legislator agree to hold a hearing on a symbolic gesture opposing a dead project the Governor already killed???

5. On top of all that, private sector economic forcasters say the glut of domestic gas has killed all investment prospects for LNG import facilities:

 One by one, developers of US LNG import terminals pulled the plug this summer as overabundant domestic natural gas production turned what had been a challenging outlook for imported gas into an all but impossible business model. (full article here)  

By the end of the hearing, Senator Beck (R-Monmouth) was running away from supporting the Resolution and her Party’s Governor’s position to kill off shore LNG.

In our view, the entire hearing was an embarrassing self inflicted wound that stoked a far broader anti-environmental backlash – and all for no nothing!!.

COA somehow had managed to lose the battle, undermine their credibility, strenghten their opponents, and let the Governor off the hook.  Wow!

ps – In a comment to the Bergen Record story cited above, I submitted this comment:

Friday April 23, 2010, 12:33 PM – Gracus says:
How economically feasible are these projects in light of huge glut of domestic natural gas, including new large reserves in the Marcellus Shale? They were dead projects walking.

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