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$3.8 Billion LNG Export Facility Approved For East Coast

On Monday, federal regulators approved construction of a liquefied natural gas (LNG) facility in Cove Point, Maryland. After two years of review and sustained pushback from concerned community members and environmental groups, the Federal Energy Regulatory Commission (FERC) gave Dominion Resources Inc. the go-ahead to begin construction as part of an existing LNG import facility in southern Maryland. The Richmond, Virginia-based company will now review the order, which includes 79 conditions the company must follow. In June, FERC had denied a request by several environmental groups and lawmakers to extend the comment period before making a decision.

The Cove Point LNG liquefaction and export project is the fourth LNG export terminal to receive approval in the U.S. to site, construct, and operate. It is the first such project on the east coast and the closest to the Appalachian-based Marcellus Shale, the largest natural gas producing region in the United States. The domestic shale gas boom, catalyzed by the proliferation of fracking, has increased natural gas supply and caused prices to drop. Until only a few years ago companies were looking to build LNG import, rather than export, terminals. The lay of the land has changed dramatically since then and Calvert County on the western shore of the Chesapeake Bay embodies this shift.

While FERC conducted an Environmental Assessment determining that the $3.8-billion facility could be built safely with no significant impact to the environment, the opposition feels that FERC’s finding and subsequent approval are fundamentally flawed and that a more exhaustive Environmental Impact Statement was in order. They argue that the terminal, which will be able to export 5.75 million metric tons of LNG a year when fully operational, will incentivize environmental damage from fracking in the mid-Atlantic, and possibly contribute more to global warming over the next two decades than if the Asian countries where the gas is headed burned their own coal.
“FERC’s decision to approve Cove Point is the result of a biased review process rigged in favor of approving gas industry projects no matter how great the environmental and safety concerns,” said Mike Tidwell, director of the Chesapeake Climate Action Network, in a statement. “We intend to challenge this ruling all the way to court if necessary. For the safety of Marylanders and for people across our region facing new fracking wells and pipelines, we will continue to fight this project until it is stopped.”

Related: With LNG Export Battle Won, Are Oil Exports Next?

In a call discussing the decision, Tidwell called the FERC review process “mostly secretive and detached.” He said Dominion has “repeatedly cut corners and ignored environmental and safety concerns.”

Tidwell pointed to a recent report from the DOE that found that when the full lifecycle of the LNG is considered — fracking process, transporting through leaky pipes, energy intensive liquefaction, tanker transportation to Asia, re-gasification, and electricity generation — it is almost certainly worse for the atmosphere than letting those countries burn their own coal.

The report found that the benefits of cleaner natural gas production can be offset by methane leaks from pipelines as well as the energy required to liquefy and transport the LNG. Dominion plans to build a 130-megawatt power plant to meet the energy needs for liquefaction as well as dozens of miles of new gas pipelines. Chesapeake Climate Action Network found that the facility, if built, would become one of the state’s largest greenhouse gas producers, emitting more carbon dioxide than all but three of the state’s existing coal plants.

When it comes to neglecting to do an EIS, the Baltimore Sun wrote in an editorial late last year that it would require Dominion to collect far more information about what the project will “mean for the local ecology and people living in the region:”

But that seems like a small price to pay. After all, Maryland has taken a skeptical approach to fracking generally, why wouldn’t we insist on a closer examination of what an LNG plant will mean as well?

Aside from the greenhouse gas concerns and local concerns of a terminal that could leak into an important waterway or even experience a catastrophic explosion, there is a greater economic debate about the merits of exporting gas. Some argue that exporting gas could lead to higher domestic prices and potential shortages. Others see it as a geopolitical tool that can be used to keep Russia and other exporters in check. It has broad support in Congress and President Obama has included natural gas as a climate-friendly way to get off coal.

The Department of Energy has approved Cove Point’s exports to both free-trade and non-free trade agreement countries, with FERC finding it “in the public interest.” Dominion already has in place 20-year contracts with Japanese and Indian companies — neither country has free-trade deals with the United States. American law requires export facilities get a “public interest” approval from the DOE if their buyers are located in countries that haven’t signed a Free Trade Agreement with the United States.

Tidwell said that FERC refused to perform a Quantitative Risk Assessment to determine potential blast zone consequences even as the Chesapeake Climate Action Network conducted an independent review that found that residents outside of Dominion’s property would be in danger in the case of an explosion. But the real conversation is around differing visions of the countries’ energy future. Some see LNG as playing an important role in the all-of-the-above approach while others see it as another fossil fuel driven enterprise with little regard to environmental and climate concerns.

Related: Panama Canal Expansion to Grow LNG Trade

“If it weren’t for fracking would they be building this export facility — of course not,” said Tidwell. “Everybody pretends that the gas comes from nowhere and goes nowhere. That is part of our deep concern over this.”


Jocelyn D’Ambrosio, an associate attorney for Earthjustice, said opposition groups will now petition FERC to reconsider their decision. If this doesn’t work she said they are prepared to take the issue to federal court.

Tidwell and D’Ambrosio expressed grave disappointment with Maryland’s lawmakers for not requiring more extensive analysis of the project, calling it a stain on Governor Martin O’Malley’s record. O’Malley has previously gone on record saying that “climate change is transforming the world in profound ways that continue to evolve. We still have time to become great ancestors, and we have a moral obligation to our children and our grandchildren to act now while we can make a difference.”

On Tuesday evening at six, concerned residents will protest outside an environmental award ceremony for Governor O’Malley at Columbus Center in Baltimore, MD, where the University of Maryland Center for Environmental Science will present him with an award.

By Ari Phillips

(Source:  www.thinkprogress.com)

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