AES Corp.'s Proposed Boston Harbor LNG Project Meets with Tentative Approval

After rejecting two similar projects in or near their state, Rhode Island officials made clear in recent weeks that AES Corp.'s latest proposal to build a new liquefied natural gas ("LNG") facility on an island in Boston Harbor met with their approval.  Reportedly, AES Corp. is considering leasing Outer Brewster Island, a state-owned island eight miles from the Boston shoreline, in the hopes of building a new LNG facility there.

Rhode Island's support of an Outer Brewster Island facility stands in sharp contrast to its vehement opposition to two other projects in the area, the Weavers Cove project, planned for Fall River, Massachusetts, and a proposed terminal expansion by KeySpan Corp. in Providence, Rhode Island.  On September 20, 2005, Rhode Island Attorney General Patrick Lynch sent a letter to President Bush calling the proposal more sensible than Weavers Cove or the KeySpan expansion and calling on the President to urge FERC to stop considering these proposals.  Rhode Islanders feared that these two projects would pose serious security risks to the area because they were either too close to large population centers or would require LNG tankers to navigate the narrow Narraganset Bay.  AES Corp.'s proposal, on the other hand, is two miles from the nearest population center (in Hull, Massachusetts) and ten miles from downtown Boston.  Moreover, tankers could sail directly to Outer Brewster Island without having to enter narrow waterways.

Despite smooth sailing with Rhode Island, the AES project remains in its infancy and could yet be scuttled by opposition in Massachusetts.