Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )

From The Record

New York Gov. Andrew Cuomo has decided to veto a controversial project to build a liquefied natural gas port off the New Jersey coast.

Cuomo sent a letter to the U.S. Maritime Administration outlining his lingering concerns with the proposed facility, called Port Ambrose.

The project, which had faced vocal opposition from environmental groups in both New Jersey and New York, would have been situated about 19 miles south of Jones Beach on Long Island and 29 miles east of Sandy Hook. Under federal deepwater port regulations, the governors of adjacent coastal states have veto power over such deepwater projects.

“My administration carefully reviewed this project from all angles, and we have determined that the security and economic risks far outweigh any potential benefits,” Cuomo told The Associated Press this morning. “Superstorm Sandy taught us how quickly things can go from bad to worse when major infrastructure fails – and the potential for disaster with this project during extreme weather or amid other security risks is simply unacceptable.”

Governor Christie had yet to take action on the issue. In the past, he has voiced concerns about such projects and had even vetoed a similar proposal by the same company.

The proposal by Liberty Natural Gas included a port at sea to extract liquefied natural gas from specially designed ships that convert it back into a gas form so it could be pumped to shore on Long Island. Port Ambrose would have had two buoys to connect with ships, and the facility could have received about 45 vessels a year from the Caribbean.

It would also have required a new pipeline segment running for about 21 miles along the seafloor. The new line was to hook up with an existing line that runs from Monmouth County to Long Island. The two lines would have hooked up 15 miles east of Sandy Hook.

In a statement issued Thursday, Liberty Natural Gas CEO Roger Whelan said the company had not yet heard directly from Cuomo’s office. “We will thoroughly review his official letter once we receive it,” he said.

Liquefied natural gas is methane gas cooled to minus-264 degrees Fahrenheit to reduce its volume so 600 times more can be transported as a liquid at lower cost.

The company had said its facility would help relieve the bottleneck in supplying natural gas to the New York market during peak demand caused by the limited onshore pipeline delivery system.

Cuomo’s move drew praise from environmentalists in New Jersey.

Jeff Tittel, director of the New Jersey Sierra Club, agreed. “This is a great victory for the environment and protecting our coasts,” he said. “We want to thank Governor Cuomo for his veto and stopping this dangerous LNG facility. This project was unneeded, unnecessary and now is no longer going to happen. This project would have had tremendous environmental impacts and even more climate impacts from the burning of natural gas. This veto is not only important to help reduce greenhouse gases but also to promote clean energy.”

The No LNG Coalition, a group of environmental groups that opposed the project also issued a statement. “We are deeply grateful to Governor Cuomo for taking this step to protect coastal communities and stop this dirty, unnecessary and dangerous gas project,” said the group, which includes New Jersey-based Clean Ocean Action. “The sun has set on Port Ambrose. We now look forward with joy to a new day of local, equitable, and accountable renewable energy.”

The U.S. Coast Guard concluded in a 1,800-page report it issued last year that the project would have minimal impact to the air, water, marine life and sediment on the ocean floor around the site. Environmental groups disagreed with the conclusions in the environmental impact assessment, saying the project would pose serious environmental risks and threaten New Jersey’s Shore-based economy. They also say the port could be a new terrorist target just miles from the most densely populated part of the country.

Christie, who expressed opposition to any facilities for liquefied natural gas off the Jersey Shore during remarks on Earth Day in his first year as governor, later vetoed a similar proposal by Liberty Natural Gas in 2011. That project would have been twice the size of the current proposal, and was to be situated 16 miles off Asbury Park.

In his veto message at the time, Christie cited fears about damage to the state’s commercial fishing and tourism industries and concern the facility would undermine the state’s investments in developing alternative, renewable energy sources such as solar and wind.

Given those concerns, the company had said the new proposal was designed to be located completely offshore, avoid any impact to shoreline wetlands, and avoid sensitive fishery areas and near-shore areas that could affect tourism.