US High Court hears states argue on LNG terminal

27 November 2007 16:47  [Source: ICIS news]

By Joe Kamalick

 

WASHINGTON (ICIS news)--The US Supreme Court heard arguments on Tuesday in a dispute between the states of New Jersey and Delaware that may decide whether a $600m (€400m) LNG regasification terminal will be built on the New Jersey shore.

 

BP wants to build the regasification plant and a tanker dock, known as the Crown Landing project, on the New Jersey shore of the Delaware River that runs between the two states.

 

New Jersey, home to one of the largest concentrations of chemicals manufacturing outside of Texas and Louisiana, supports the BP project and wants it to proceed. 

 

US chemical manufacturers are heavily dependent on natural gas as a feedstock and energy source, and the industry wants to see large increases in US imports of LNG to take demand and pricing pressure off domestically produced natgas.

 

However, the Delaware state government objects to the Crown Landing project and wants to block the liquefied natural gas (LNG) import terminal on grounds it will disturb Delaware’s shoreline and cause environmental damage.

 

The dispute is complicated by the fact that under an agreement that dates from Colonial times, the Delaware state boundary at that point includes all of the Delaware River up to the low-water mark along the New Jersey shore.

 

Construction of BP’s receiving dock for LNG supertankers would require dredging portions of the riverbed, which is Delaware state property.  The Delaware state government cited its territorial rights in denying BP a permit to build the receiving dock.

 

New Jersey has filed suit, arguing that Delaware’s territorial claims do not trump New Jersey’s right to grant development along its own shores.

 

The overwhelming percentage of cases heard by the US Supreme Court usually have to claw their way to the High Court through a years-long sequence of lower court and appellate court hearings and rulings.

 

However, the New Jersey-Delaware dispute has been filed directly to the Supreme Court because conflicts between states fall within the High Court’s first-hearing jurisdiction.  The top US federal judicial authority has been dealing with New Jersey-Delaware boundary disputes since 1877.

 

A High Court ruling in this case is likely by June next year.

 

($1 = €0.67)

By: Joe Kamalick
+1 713 525 2653

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