Guys, I'm from Galveston, Texas, a small city of 60,000 people located 50 miles S.E. of downtown Houston. A couple of years ago BP after possibly a few judicious bribes announced that they were going to build a LNG terminal on Pelican Island, across the Galveston Harbor from downtown Galveston, about 3 miles north of the center of the city on leased land from our port authority meeting in a secret session. It was opposed by most of our city for various reasons-not enough money, the warming of the gas would kill fish, too close to population areas-then God intervened and BP's sloppy maintainence caused two large explosions at their refinery on the mainland. They folded their tents like the Arabs and silently slipped away.
  Texas is different from NY, a rather obvious conclusion. We have two completed LNG facilities within 100 miles, and several more planned. But, if I lived near NYC I would question why the LNG plant is not being located in Federal waters offshore the largest gas consuming area, probably the refinery complex in New Jersey, or even rely on the gas being transmitted through the old interstate system from the LNG facilities offshore in the Gulf Coast Area.
Oilmanbob,
In case you missed this previous article, it has some background on Broadwater:http://nyc.theoildrum.com/story/2006/6/8/115927/4371.

It includes a link to an excellent blog (Sphere) that is following the environmental consequences of Broadwater.

I'll provide my understanding of the Broadwater project to try and address your questions. My info comes from following it locally.

Broadwater claims that Long Island Sound is preferable to any ocean sites because the impact from bad weather, including potential hurricanes, is less.

I can't say how the gas demand of the NJ refineries compares to other uses, but you should know that power plants around here burn either oil or gas, with the newer plants burning gas exclusively. It's the preferred fuel environmentally.

Broadwater's argument regarding existing pipeline capacity is that it is constrained and that we're at the end of the pipeline. Broadwater claims that delivering gas directly to the end of the pipeline is a big benefit. Some of the anti-Broadwater folks are focusing on LNG facilities that might be built in Canada, the gas from which could be supplied via upsizing (if that's the right word) the Maritimes pipeline.

I'm not passing judgement, at least from an energy perspective, just passing along the arguments. I understand from postings here that using gas for power generation is not considered by some (many?) to be the best use for gas.