From Gordon Shearer’s perspective building an off shore LNG terminal in Mt. Hope Bay that would bring about 70 tanker deliveries a year is a no-brainer.

He argues the $700 million project would: lower the cost of electricity to the New England region by $125 million a year; directly inject $80 million into the local economy with a multiplier effect of $400 million; ensure a regional supply of natural gas especially during peaks demands in the winter and create jobs.

Shearer, the President and CEO of Hess LNG that owns Weaver’s Cove Energy and would build and operate the facility, also dispels many of the objections to the project, which, for the most part, are being raised by the environmental group Save the Bay and state Attorney General Patrick Lynch.

Under the category of myth is the claim the project is such a bonanza that Hess stands to recoup its investment after the first four to five tankers offload their cargo of liquefied natural gas from around the world.

That story had Shearer, who came to this country from Scotland and stayed after earning an MBA degree at Harvard Business School, laughing at a visit to offices of this newspaper last Wednesday. Indeed, Shearer has read and heard the claims this is all about money and that Hess would be raking it in if allowed to build and operate the terminal. But this was off the scale.

“That would be astonishing and I would have a wide grin on my face if that were true,” he said.

He put the return on investment at about ten years.

And, yes, this is about money.

“Obviously we’re in business of making a profit,” he said. The Mt. Hope Bay terminal would enable Hess to do that by buying LNG on the world market – the estimated value of a single tanker cargo is $15 million – and selling it for more than what it cost them. One reason Fall River is so well situated for the project, Shearer said, is that it enables the company to link into the existing natural gas infrastructure without the otherwise huge investment of increasing pipeline capacity.

But Fall River also represents a problem. Reaching it by tanker requires entering Narragansett Bay at Newport, steaming north between Aquidneck and Prudence Islands and passing under the Mt. Hope Bridge to arrive at Mt. Hope Bay.

Many yachting, fishing organizations and the Rhode Island Marines Trade Association have signed on with Save the Bay in opposing the project on the basis it would disrupt traffic on Narragansett Bay, hurt the local economy and destroy 73 acres of winter flounder spawning habitat.

Initially passages that would start with tankers being joined by the Coast Guard, a pilot boat and a heavy-duty tug off Brenton Reef buoy in Rhode Island Sound would be done during daylight hours, said Shearer. There would be advance notice of the deliveries and an attempt would be made so as not to interfere with other operations. Shearer countered claims that for security reasons, transits would only take place during the day. In fact, he said, once the system became routine, deliveries would be conducted at night so as to minimize disruption.

Save the Bay portrays passages as virtually halting bay traffic and shutting down Newport Harbor for a period of about 45 minutes because of the vessel’s “exclusion zones.” The “safety zones,” as Shearer calls them, extend two miles to the front of the tanker, a mile astern and 1,000 yards to either side. These areas are to be kept clear of other vessels for safety and security reasons. The 950-foot tanker would travel at a speed of 8 knots to maintain steerage, with a tug along side in the unlikely event of an engine failure.

Shearer discounts claims, as have been made by Economic Development Corporation director Keith Stokes, that cruise ships would abandon Newport as a port of call because of the tight security and safety measures. Shearer notes that LNG tankers have not stopped cruise line visits to Boston although the tankers make deliveries to the Everett terminal. Also, he observes, that the passages of tankers haven’t halted shoreline development, sailing regattas or other waterfront activities.

In fact, Shearer notes, that the larger cruise ships visiting Newport, such as the QE2, also require safety zones clear of other vessels because of their inability to make rapid course adjustments or stop.

Shearer said there is no federal requirement that traffic at either the Pell or the Mt. Hope Bridge be stopped during a delivery. He said traffic is stopped occasionally on the Tobin Bridge in Boston during deliveries to the Everett terminal, but those interruptions have not turned the highways into parking lots as being argued would happen here. He cast the closing the bridges argument as part of the overall campaign to discredit the project.

Shearer also countered claims that passages would interfere with Naval Undersea Warfare Center operations. He said there would be advance notice of tanker operations – as much as five days – and coordination of activities. And, he pointed out the Navy could maintain operations within the safety zones because “we would know who they are.”

In order to build the offshore terminal that would be connected to a 200,000 cubic meter storage tank in Fall River by a 4.5 mile buried pipeline, a channel and turning basin for the tankers would have to be dredged. The tankers would carry about 150,000 cubic meters of LNG. Most of the LNG imported into the US is supplied by Trinidad, but other potential supply sources include Norway, Algeria, Nigeria, Egypt, Qatar, Equatorial Guinea, Russia, Oman and Abu Dhabi. Shearer said the company has already spent $5 million to obtain core samples and in testing to determine that dredge spoils are not contaminated and can be safety disposed of at offshore disposal sites. He did not mention the habitat of the winter flounder.

Shearer covered the issue during his testimony last Tuesday before a Rhode Island Senate task force committee. Testimony continues tomorrow at the State House. At last week’s hearing Shearer said the loss of 73 acres out of 7,400 acres of spawning habitat in Mt. Hope Bay “is unavoidable” but added that Weaver’s Cove has offered $15 million in mitigation to be used for suitable offsetting projects.

Shearer’s argument for the project, like those who oppose it, is built on money – what it means in terms of energy for the region and how it can serve to reduce electric costs. He explains that in times of peak demand the region consumes 4 billion cubic feet of natural gas daily. Of this amount, the existing pipeline supply can provide 3 to 3.5 billion cubic feet. The balance is made up with LNG from as many as 43 storage facilities in the region (such as the one in Providence that is supplied by truck deliveries). The Everett terminal is the major supplier in the region and the Weaver’s Cove terminal would be similar in size if built. Without LNG to augment the supply, Shearer said decisions would need to be made on what schools, commercial operations and other buildings would have to be closed on severe winter days.

But LNG is no longer just a life ring for a winter freeze.

Because of the increasing demand for natural gas, the cleanest fossil fuel, LNG is used to boost supply year round. With such demand it would seem logical that the pipelines would be enlarged. Shearer said this would be impractical because of cost and the fact that the maximum capacity would only be used for a few days a year.

Also, he reasons LNG provides a perfect balance to wind generated power. Unlike coal fired or nuclear power plants that take time to bring on line and once operational remain running for extended periods, natural gas plants can be up and running quickly. This gives natural gas generating plants the capability of filling those gaps when the wind dies.

In his testimony before the Senate committee, Shearer said “the price of natural gas is the dominant factor in determining the price of wholesale electricity.” He reasons that an LNG terminal at Weaver’s Cove could lower price by $0.10 per MMBtu and thereby reduce New England’s power prices by $125 million a year.

It has been eight years since Hess first proposed a tanker-supplied LNG terminal in Fall River. The project has gone through various iterations and the company opted for the offshore terminal after designation of the Taunton River as a wild and scenic stream and the historic designation of the Brightman Street Bridge halted plans for a land-based terminal. It is now seeking Federal Energy Regulatory Commission approval for its amended plan. The agency is conducting an environmental impact statement that Save the Bay believes will be released this spring.

“We are in the third quarter,” Shearer says when asked where the process is.

He estimates 52 permits are needed for the terminal project.

Shearer likes the football analogy declaring himself an avid Patriot’s fan.

He says they’re on their own 20-yard line, they have the ball, not to mention Tom Brady and “Wes Welker is back.”

And he adds with a smile, “and the fourth quarter is Brady’s quarter.”