Hess LNG withdraws from Rhode Island, opposition claims LNG would risk “tearing up our waterways”

Last month, Hess Energy announced that they will be withdrawing plans for an LNG facility in Fall River, Massachusetts.

Many opponents of the facility boasted a victory to the state, claiming that the facility would have been an environmental nightmare. According to a former Rhode Island Attorney General Patrick Lynch, ships delivering LNG would risk “tearing up our waterways”.

Hess claims that the opposition had no bearing on their decision to pull the plug on the proposed terminal. They say that their decision is based on the higher price of imported gas vs. the cheaper and recently much more available shale gas found right here in North America. At this point it is not economical for them to build a brand new facility designed to  import an ultimately more expensive product.

And who can blame them….

The plans for a facility in Fall River were drawn up long before new shale gas extraction techniques such as hydraulic fracturing and horizontal drilling, that have made production of the gas a viable option. When this project was first proposed, it was commonly believed that the US couldn’t “drill their way out” of an energy shortage.

However, with significant advancements in technology, we essentially have.

According to the Energy Information Administration, the amount of recoverable shale gas has increased by 134 percent in one year, since 2010. The EIA says that as of 2009, shale gas accounted for 14% of the total US natural gas supply. They expect that by 2035, that number will increase to 45%.

So for now, the battle is on hold.

As long as shale gas production continues be a viable option, there is no need to pursue the business of LNG shipping on local waters. The argument ends with no clear winner. However, the opposition gets a bay free of LNG ships, and Hess Energy gets access to a newly recoverable product.  In the end, both sides of the argument got what they wanted: cheaper gas.