Long Island Business News: Full-court press for Shell Oil

By David Reich-Hale and Michael H. Samuels
Friday, March 7, 2008

Shell Oil Co. President John D. Hofmeister went on the offensive this week, saying that if New York officials derail the Broadwater liquified natural gas terminal planned off the coast of Wading River, Long Island residents will continue to be choked by electricity and gas costs.

Hofmeister added that Broadwater, a joint venture between Shell and TransCanada Corp., would save ratepayers $300 per household annually by pumping 1 billion cubic feet of natural gas into Long Island.

“It would be the first major new energy infrastructure built for the region in several decades,” Hofmeister said in an At C Level podcast available on libn.com and Apple’s iTunes. “As the region has grown, as you’ve needed more electricity, there needs to be a new supply of energy to produce that electricity.”

The Shell executive also said that there are no alternatives that would bring as much natural gas to Long Island or create as much of a cost savings as Broadwater.

But Connecticut Attorney General Richard Blumenthal called the cost savings quoted by Shell misleading, and added, “there are plenty of alternatives to Broadwater. We’ve laid them all out. And none of them are an environmental risk or impact natural resources like Broadwater.”

Blumenthal touted ExxonMobil’s proposed BlueOcean LNG, which would be 30 miles off the coast of New York and 20 miles from Asbury Park, N.J. He said BlueOcean would be capable of saving New York ratepayers just as much as Broadwater.

But Hofmeister said, “The attorney general is dead wrong in suggesting that the Exxon alternative can bring any energy to the New York region. There are no gas pipelines that would extend from the Exxon project into the New York metropolitan, Long Island or upstate New York region.”

He also said the pipelines running into the New York region from New Jersey are already at capacity. Hofmeister added that both LNG terminals were necessary to meet growing demand.

But Blumenthal said the gas could make it from New Jersey to this region because “New York and Connecticut both receive natural gas that originates from Louisiana.”

He also said the expansion of the Iroquois Pipeline, which runs under the Sound, is underway.

And Long Island environmental activists said once the pipeline expansion is complete, it would bring 300 million cubic feet more of natural gas per day to Long Island.

“That’s enough natural gas to heat 750,000 additional homes,” said Adrienne Esposito, executive director of Farmingdale-based Citizens Campaign for the Environment. “It’s a large-scale, noncontroversial project with no environmental damage, no social or cultural damage and both states agree on it. Let’s support that.”

Like BlueOcean, Hofmeister said the expansion of the pipeline wouldn’t be enough.

Hofmeister also said the oil industry has failed to stay connected to its customers, many of whom are livid that companies such as Shell and ExxonMobil continue to post record profit while gas prices escalate.

Hofmeister said gas prices continue to soar because “in America, only 15 percent of the intercontinental shelf is available for drilling.” He proposed drilling in Alaska and the Gulf of Mexico as ways to increase supply, and thus decrease prices.

Environmentalists have long argued that the Arctic wildlife region of Alaska and the Gulf of Mexico should be off limits and left in its natural state.

Also, they’ve argued, it would take the focus off the alternative-energy debate.

But Hofmeister said Broadwater and the debate over tapping reserves doesn’t take away from the alternative-energy debate and, he said, the big issue remains at the feet of customers, who have not reduced their energy consumption.

For now, Hofmeister said Shell would wait for the New York governor’s ruling.

Blumenthal said he was hopeful New York would not approve Broadwater, but he was prepared to sue, citing the Clean Water Act.

Hofmeister retorted, “The attorney general of Connecticut really has to answer to voters who would benefit from lower energy costs – in Connecticut.”
  
http://www.libn.com/article.htm?articleID=41649

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