Dan's Papers - May 6, 2008 - Broadwater to Appeal State's Decision

After its proposed $700 million floating oil barge in Long Island Sound was rejected by New York and Connecticut, Broadwater Energy, a joint venture of Shell Oil and TransCanada Pipelines Ltd., has announced its plan to appeal the State's decision.

Three weeks ago, New York State Governor David Paterson had announced that the New York Department of State determined the plans for the natural gas terminal violated the Coastal Zone Management Act (CZMA), and were considered to be inconsistent with the values and uses for the Sound. Broadwater will ask the U.S. Commerce Department to reverse this decision.

"We firmly believe that Broadwater is the best way to deliver a new supply of clean, affordable and reliable natural gas to the region without the onshore and near shore environmental and safety impacts associated with other alternatives," said John Hritcko, senior vice president and regional project director of Broadwater. Hritcko added that since Long Island, New York City and Connecticut are at the end of very long pipelines - meaning residents in those areas pay higher prices for gas - bringing a new gas supply to the region could moderate prices in our area.

Paterson announced his opposition to the project early last month. "One of my goals as Governor is to protect Long Island Sound, by preserving it as a valuable estuary, an economic engine for the region and a key component to making Long Island's quality of life one of the best in the country," he said. "Broadwater does not pass that test. Shame on us if we can't develop a responsible energy policy without sacrificing one of our greatest natural and economic resources."

Adrienne Esposito, executive director of Citizens Campaign for the Environment, a Long Island group that led the campaign against the Broadwater project, is unfazed by the appeal. "Broadwater continues to be obnoxious and we feel very strongly that they will lose," she said, adding that New York State has never lost on an appeal of a CZMA ruling. "In order for [the secretary of commerce] to overrule New York, he would have to believe that there's no other alternative, that the national interest is at stake and that it's more important than any of the local statewide concerns. So we believe the bar is high. Broadwater will fail and they really should have just cut their losses and gone home."

Though the Federal Energy Regulatory Commission approved the project in March, residents and officials from both New York and Connecticut have protested the project because of environmental and safety concerns. New York State and the Federal Government received approximately 60,000 handwritten letters and 100,000 signatures protesting the barge.

The Peconic Bay Community Preservation Fund's revenues declined in the first quarter of 2008, said Assemblyman Fred Thiele.

The fund generated $17.61 million during the first quarter, dropping 21% from the $22.55 million collected during the same period of 2007. In 2006, the revenue for the first quarter was $21.87 million.

The dip in CPF revenue, which is collected from a 2% tax on all real estate sales, may be reflective of a decline in home sales. There were 1,704 real estate transactions during the first quarter of 2008, compared to 2,102 during the same period of 2007 - an 18.9% drop. Riverhead, with a 49.5% drop, saw the largest decrease in revenue for the quarter. Southold was the only town to see an increase in revenue at 21.5%

Suffolk County, overall, saw a 34.9% decline in the number of single-family homes sold over the past year, with 765 sold in March 2007 compared to only 498 sold in March 2008.

Thiele said the number of transactions and the amount of CPF revenue is at its lowest for a first quarter since 2003. Last year, with $96 million collected, was a record year for CPF revenue. "It is clear that the national economic decline that has been fueled by the credit crunch and the mortgage crisis is now having a demonstrable impact on East End real estate and CPF revenues," he said. "While this revenue stream is somewhat volatile and can be impacted by large single transactions, it is clear that the trend is towards fewer transactions and less revenue. The Peconic Bay Towns should plan accordingly as they pursue their acquisition strategies."