Bay Journal

Gas export plant wins key federal approval

Dominion poised to build natural gas export facility at Cove Point

  • By Rona Kobell on September 30, 2014

By Rona Kobell

A plan to put a liquefied natural gas export terminal in the Chesapeake Bay has overcome its last major permitting hurdle, but opponents said they would continue to challenge the plant's construction.

The Federal Energy Regulatory Commission last night announced it was giving Dominion Resources permission to site, construct and operate the Cove Point liquefied natural gas export plant on the shores of the Chesapeake in Lusby, Calvert County.

The company will need to sign off on 79 conditions FERC has set forth, and tell FERC officials how it will implement its plans. The conditions came in part from public hearings and public comments in which more than 700 people let the commission know their concerns about the Lusby facility.

The conditions include a noise survey and complying with all local permits.

The number of conditions did not assuage opponents, who vowed to fight the project in court and appeal to their elected officials as well as to the agency.
“The bottom line is that we are just appalled that our government agencies are showing such blatant disregard for our health and our lives,” said Tracey Eno, a founding member of Calvert Citizens for a Healthy Community, which was formed to raise questions about the Cove Point expansion.

Among residents’ concerns is the lack of an evacuation route on the small, residential peninsula about 10 miles north of Solomon’s Island in Lusby; the increase in air pollution and ship traffic; and the possibility, however remote, of an explosion or fire. Ten years ago, an explosion at an Algerian LNG plant killed 27 workers. Residents who oppose the plant have argued that the risk of an accident such as that is unknown: exporting natural gas is so new in the United States that the few plants with approval to do so aren’t yet online. Dominion’s Cove Point facility was the fourth to be approved. The other three are on the Gulf Coast.

Eno has a team of environmental activists in her corner: Attorneys for the Sierra Club and Earthjustice said they were mulling their options on taking this case to court. In addition, Chesapeake Climate Action Network executive director Mike Tidwell called the approval “appalling and unacceptable” and said the approval process was “secretive and apparently rigged.”

But Dominion, which has been eagerly awaiting this approval for two years and has cleared every other hurdle, is planning on moving forward quickly.

“We are pleased to receive this final approval that allows us to start constructing this important project that offers significant economic, environmental and geopolitical benefits,” said Diane Leopold, president of Dominion Energy.

The FERC paperwork alone clocked in at more than 21,000 pages. In addition to that, Dominion needed 50 state and federal permits, including ones from the Department of Energy and one from the Maryland Public Service Commission to build a small power plant to supply the facility. Over the past two years, it secured them all.

It also fought back a legal challenge in the Maryland courts from the Sierra Club, which had argued that exporting natural gas violated an agreement the organization had signed with Dominion’s predecessor. Dominion prevailed in all the Maryland lower courts on that issue.

Dominion needs to begin the construction as soon as is practical because it wants to open its $3.8 billion facility in 2017. Dominion has contracts to supply gas to companies in Japan and India. Natural gas experts have said that the first five or six plants in the business will make a lot of money; for the others, the path to riches is less clear as competition will drive the prices down and in that time some of the overseas markets may develop their own energy sources.

Dominion, being fourth in line, can’t afford delays.

The Cove Point project pushed a sleepy Calvert County town and its nearly dormant LNG facility into a world-wide debate about energy.

It has been more than a year since a ship has delivered gas to Cove Point’s terminal on the Bay’s western shore, though Dominion keeps all the engines running and the computers ready in case anyone were to call. But the potential for an export facility crystallized a few years ago, when horizontal drilling techniques came to the Marcellus Shale formation of Pennsylvania, Virginia and New York. Whereas fracked gas has previously come from Arkansas and Texas, now it was practically local. The abundant domestic supply coincided with shortages overseas, which were made worse by Russia’s natural gas dominance and its willingness to turn off the taps and freeze out its neighbors when geopolitics didn’t go its way.

American regulators worked quickly under pressure from Congress to approve more LNG export facilities. Even some environmentalists supported this idea, saying exporting gas was far better than exporting coal. Labor liked the idea, too, as the new Cove Point facility will cost $3.8 billion to build and will employ skilled tradesmen.

But a year ago, the opposition from neighbors and environmental groups reached a fever pitch. The Chesapeake Climate Action Network’s activists argued that shipping natural gas overseas was getting Americans far, far away from clean-energy goals. It was also a big incentive for fracking, which the group is opposing along with several other environmental coalitions. Another concern came from scientists at the Chesapeake Biological lab on Solomon’s Island. There, some of the leading researchers on ballast water worried invasive species would enter the Chesapeake on incoming gas tankers and cause billions of dollars in damage, as they have to the Great Lakes.

Residents were also angry about what they considered the secretive nature of the process. The Calvert County commissioners signed a non-disclosure agreement with Dominion, gave them a tax break and waived all local zoning ordinances for the project.

Many residents attended public hearings to support the project, including the Calvert County Sheriff and local members of labor unions. But last spring Mickey Shymansky, the assistant chief of operations at nearby Solomons Volunteer Rescue Squad and Fire Department, said he didn’t think the region could handle a fire from an LNG facility. Shymansky later resigned.

Dominion is still fighting a court battle in Maryland. A Calvert County circuit judge ruled that the county broke the law when it waived local zoning requirements.

Tracey Eno doesn’t believe that the residents are out of options.

“This is not the end. This is not a done deal. We will continue to be vigilant about every single step. We could take more dramatic action,” she said. “ At this point we have nothing to lose, because we have everything to lose.”

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About Rona Kobell

Rona Kobell is a former writer for the Baltimore Sun. .(JavaScript must be enabled to view this email address).

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