An energy company, rejected by two states in its bid to build the world's first floating liquefied natural gas terminal in Long Island Sound, said Monday it intends to appeal to the U.S. Commerce Department.

The appeal follows decisions by Connecticut Gov. M. Jodi Rell, a Republican, and New York's David Paterson, a Democrat, who both oppose the $700 million terminal by Broadwater, a consortium of Royal Dutch Shell (RDSA) and TransCanada Corp.'s (TRP.T) TransCanada Pipelines Ltd.

The terminal would be the length of four football fields and about eight stories high. The plan is to place it nine miles off the north shore of Long Island and 11 miles from the Connecticut coast, about 70 miles east of Manhattan.

Paterson announced his opposition to the project earlier this month, a decision that politicians and environmentalists celebrated as the fatal blow to the project. But Broadwater officials said Monday they would ask the commerce secretary to overrule the governors.

"We firmly believe that Broadwater is the best way to deliver a new supply of clean, affordable and reliable natural gas to the region without the onshore and near shore environmental and safety impacts associated with other alternatives," said John Hritcko, Broadwater's senior vice president and regional project director.

Adrienne Esposito, executive director of the Citizens Campaign for the Environment, who led the charge against the project on Long Island, seemed unconcerned about Broadwater's announcement.

"They apparently are in favor of squandering their money," she said. "They can appeal all they want. We are very confident they are going to lose. They are acting like a spoiled child that is not used to losing."

Proposals for LNG terminals around the country have been met with opposition because of environmental and safety concerns, but advocates for building more LNG facilities say they have an excellent safety record.

Besides environmental concerns, many opponents feared the Long Island Sound terminal could be a tempting target for terrorists. Former New York Mayor Rudy Giuliani's consulting company, Giuliani Partners, did a safety and security assessment in 2006 and said the proposed terminal would be "as safe a facility in design as you could possibly have."

A study by the Government Accountability Office released last year concluded that more research was needed on the risks of LNG, which is cooled to minus 260 degrees Fahrenheit, reducing its volume so it can be transported in a tanker. The study found that an accident on an LNG tanker ship could create a fire so intense it could burn people a mile away.

Last month, the Federal Energy Regulatory Commission, which regulates the interstate transmission of electricity, natural gas and oil, approved the Long Island Sound project, although it listed 80 environmental and security considerations that would have to be met before it could operate.

FERC spokeswoman Tamara Young-Allen, who noted this would be the first floating LNG terminal in the world if approved, had noted that Broadwater officials could appeal the states' rejection to the Commerce Department. A call to the department for comment on Monday was not immediately returned.

Paterson said Monday that he stands by his decision to oppose the LNG terminal.

Sen. Charles Schumer, D-N.Y., expressed confidence the plan would ultimately be rejected.

"The Commerce Department hasn't listened to communities in the past," he said. "But I think with the states' opposition, it's going to be very hard for Broadwater to overcome."

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