Gov. Linda Lingle yesterday defended the state's handling of Hawaii Superferry, contending the state Department of Transportation properly used its discretion to exempt the ferry from an environmental review.

"We've never required an environmental assessment on one vessel in our state's history," she told reporters yesterday after speaking at a tourism conference at the Hawai'i Convention Center. "We have never done that. And we didn't think it was required."

Lingle said Superferry executives, who had invested money in the project with the expectation it would go forward, were being treated unfairly because airlines, barges and cruise ships have not had to go through similar environmental scrutiny.

Lingle also said a lengthy delay could undercut Superferry's ability to meet its financial obligations and the state's financing of $40 million in harbor improvements to make ferry service possible.

"So there's a lot of harm that could occur if we're not allowed to continue to move forward and let them use our harbors and if they're not allowed to continue to operate," she said.

Lingle's comments were her most extensive since the state Supreme Court ruled Thursday that the state needed to conduct an environmental assessment on the impact of ferry service on state harbors.

Most of the reaction so far has been over the legal and practical consequences of halting ferry service, but some are also beginning to question whether the Lingle administration and the state Legislature acted wisely.

The Republican governor noted that the Democratic-controlled Legislature agreed to the $40 million in harbor improvements and defeated a bill last session that would have required the state to do an environmental impact statement on the ferry's interaction with state harbors.

But several Neighbor Island state senators had threatened to block the harbor improvement money in 2006 and had tried to force an environmental review this year, claiming Superferry had failed to adequately address the potential for traffic congestion, the spread of invasive species and the threat to humpback whales.

The Neighbor Island senators, as a compromise to get Senate passage and potentially influence the state House, also suggested that an environmental review could be done by the state while Superferry launched its operations. The Superferry, the Department of Transportation and state House leaders all rejected the compromise, arguing it could cause delays or that it made little sense since the harbor improvement money had already been approved.

Both John Garibaldi, the Superferry's president and chief executive, and Barry Fukunaga, director of the Department of Transportation, told reporters in March that the Senate compromise could jeopardize the launch.

"It was not given the time of day," said state Senate President Colleen Hanabusa, D-21st (Nanakuli, Makaha).

The state now is arguing in court that it be allowed to do an environmental assessment while Superferry operates.

Some lawmakers had accused Neighbor Island senators of grandstanding to impress their constituents, especially after it became obvious that the House would not agree.

State Senate Majority Leader Gary Hooser, D-7th (Kaua'i, Ni'ihau), said Lingle and the DOT should have thought about what might happen if the courts ruled an environmental assessment for Superferry was necessary.

He also said the administration should have listened to the Maui, Kaua'i and Big Island county councils, the state's Environmental Council, and the dozens of environmentalists who were asking for a review.

"We shouldn't have had to do that," Hooser said.

But other lawmakers agree with Lingle that the state was correct and that the events of the past week could give the Islands a reputation as anti-business.

"This does hurt the visitor industry," the governor said. "It also hurts our reputation as a place to do business and to be treated fairly.

"And, in my opinion, Superferry is not being treated fairly at this point, because they followed all the rules, the state made a determination that an environmental assessment was not necessary, and yet they've invested all this money and are now being told to stop, at least until tomorrow."

State Senate Minority Leader Fred Hemmings, R-25th (Kailua, Waimanalo, Hawai'i Kai), said the Supreme Court's decision contradicts the law and insults the Legislature. He also blamed what he called "extreme liberals" in the environmental community.

"It's another reason why Hawai'i is a hell to do business in," Hemmings said.

State House Speaker Calvin Say, D-20th (St. Louis Heights, Palolo Valley, Wilhelmina Rise), said he does not regret the House's decision not to force an environmental review.

Say also said he was disappointed the court's decision came so close to the Superferry's launch. The speaker, like Lingle, said he was interested in reading the court's full opinion — if one is issued — to help determine whether the state will have to conduct environmental reviews if airlines, barges or cruise lines expand services.

Say said he understood some Democrats are blaming the Lingle administration for the Superferry standstill. "I would say it's all of our problem," he said.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.