Thursday, January 3, 2008
Completed LNG port awaits Coast Guard permits
3 January 2008
Gloucester Daily Times
Kristen Grieco
Work has been completed on a controversial liquefied natural gas port 13 miles off Gloucester, and the $200-million facility will begin off-loading tankers as soon as the Coast Guard issues an operations permit.
But the Northeast Gateway Energy Bridge port, long opposed by fishing industry advocates and environmentalists, will likely have little direct impact on the city, a company spokesman said.
"I don't believe you'll be able to see anything from shore, except maybe from a position of height on a clear day," said Douglas Pizzi, spokesman for the port's owner, Texas-based Excelerate Energy LLC.
The operations center is located in Salem, where jobs and in-port spending will be concentrated. Crews will be transported back and forth to the site from Salem, not Gloucester.
The port will receive massive tankers filled with liquefied natural gas. When the tankers dock, the liquid will be evaporated and discharged through the buoys into a pipeline that was constructed as part of the project. It will then move into the existing HubLine pipe, which runs underwater from Salem to Quincy.
A spokeswoman for the Coast Guard said yesterday that the official responsible for issuing operations permits was out of the office and she was unable to estimate when the permit may be issued.
The only thing visible above water when ships are not being unloaded will be a mooring buoy the size of a beach ball. A 35-foot high docking facility will rise to the surface upon the arrival of a tanker.
Concerns about the port's impact on fishing led to the company's payment of $23.5 million in mitigation money to North Shore communities, including Gloucester, and $4 million to local charities. Of the mitigation funds, $6.3 million went to establish the Gloucester Fishing Community Preservation Fund, which aims to buy fishing permits from local fishermen who are leaving the industry to keep them in local hands.
Much of the money went to address environmental concerns stirred up by the port proposal, including money for an acoustic system designed to protect right whales; the system uses 10 buoys to relay information about the whales' presence to vessels approaching the terminal.
Located in the popular fishing grounds known as Block 125, the LNG port also raised concerns the fishing industry would be hurt by environmental disruption and a 4-square-mile zone around the port where vessels will be prohibited.
Fishermen have said that the reduction in fishing grounds will further strain their ability to make money. Federal regulations designed to rebuild depleted fisheries limit the number of days fishermen can be at sea. With some of Block 125 off limits, the fishermen will need to travel farther for their catch.
Environmentalists said they were concerned about disruption of the sea bed and its marine life while a 16-mile, 24-inch connection pipe was laid beneath the ocean floor.
Pizzi said the ocean floor will return to its natural state with no significant damage done.
"Obviously, there was a trench dug to put the pipe in, but in terms of overall impacts, everything was within permit specifications," he said.
Environmentalists also said they worried about the effects of using millions of gallons of seawater to heat the supercooled gas, then returning the seawater to the ocean at a higher temperature.
Pizzi said that issue was addressed by switching to a "closed-loop" system that doesn't use seawater to prepare the gas in the tanker to be siphoned into the underwater pipeline.
The operations center for the Northeast Gateway Energy Bridge is located in Salem. That site has 17 employees who will oversee the LNG facility, supervise operations when tankers arrive at the deepwater port and run a vessel that will ferry people back and forth.
Excelerate officials said in July they expect to spend close to $10 million annually to run the gateway, most of it benefiting Salem. They estimated they would expend $1.5 million on payroll and $1.7 million on in-port spending.
Pizzi said Gloucester, like much of the North Shore, could see some stabilization in natural gas prices with the new source so close to home, particularly on peak demand days.
"We're at the end of the pipe," said Pizzi.
When demand for natural gas is high, North Shore communities such as Gloucester get "what's left" after it is tapped on its way from sources in Canada and the Gulf of Mexico and pay a premium. With the closer source providing 400 to 500 million cubic feet of gas per day, or about 18 percent of the region's energy needs, some of that pressure could be eased.
A second LNG port is being constructed within five miles of the Northeast Gateway. That one, owned by Suez Energy North America, will further limit access to Block 125 by fishermen, but will also have more economic impact on the city because Suez will be headquartered in Gloucester.
Suez expects to complete construction of the terminal next year and has signed a 20-year lease for office space at Cruiseport Gloucester.
Company executives have said the port will pump $10 million into the local economy over two decades. Suez will also contribute to the mitigation funds, which will total $47 million from the two companies.
