But the department upheld that determination.

"Based on information submitted during the appeal, the [Commerce] Department determined that adverse coastal effects – particularly navigational safety concerns associated with delivering LNG to the terminal by tanker vessel up the Taunton River – outweigh the national interest."

"Navigational safety concerns were articulated in a U.S. Coast Guard report that concluded the Taunton River is unsuitable for LNG tanker traffic of the size and frequency proposed by Weaver’s Cove."

Weaver's Cove has proposed building a $550-million LNG import terminal in Fall River. In 2005, the Federal Energy Regulatory Commission gave its conditional approval of the project. That approval was contigent on Weaver's Cove obtaining approvals from several state and federal agencies, including Massachusetts Office of Coastal Zone Management.

James Grasso, a consultant and spokesman for Weaver's Cove Energy, said the company was "disappointed" in the ruling, but he said it would continue pursuing the project.

"We continue to pursue the project, and we will continue to investigate and examine the documents to decide our next steps," he said.

"For some reason, people do not realize that we need this energy and Fall River and Somerset need all the benefits associated with this project," Grasso said. "Most importantly, LNG has a 60-year exemplary safety record that I would say compares to none other."

Jeff Donald, a spokesman for NOAA, said department decisions can be appealed by filing a lawsuit in U.S. District Court.

In a separate decision issued today, federal regulators approved a request by Weaver's Cove to extend by five years the company's conditional permit to build an LNG facility in Fall River.

The permit issued by FERC to Weaver's Cove in 2005 was to expire in July 2010. The company was required to have the facility built and operating by then. The company now has until November 2015 to construct the facility and put it into operation.