Proposal for LNG terminal advances

U.S. energy officials give conditional OK to facility at Sparrows Point

April 26, 2008|By Laura Barnhardt | Laura Barnhardt,Sun reporter

Federal officials are recommending conditional approval for a liquefied natural gas terminal at Sparrows Point, over the objections of community leaders and elected officials.

In a preliminary report released yesterday, the staff of the Federal Energy Regulatory Commission concluded that the project proposed by AES Corp. could be "environmentally acceptable" with additional work.

The report calls for the Arlington, Va., company to address such issues as how to handle the sediment that would have to be dredged from the Patapsco River to accommodate the large tankers carrying the imported liquid gas.

Under the company proposal, the terminal would be built at the old Bethlehem Steel shipyard, where the LNG would be returned to its gaseous state and pumped to Pennsylvania through an 88-mile pipeline to be built for distribution.

A final staff report is expected to be complete in mid-August, with the five-member commission tentatively scheduled to make a final decision about the project by the end of November.

In justifying its findings yesterday, the agency's staff said the proposed location is an "industrial port setting" and the pipeline would follow existing rights of way for much of the proposed route.

The initial report doesn't assure approval, but it does indicate that the project is moving forward, according to industry experts.

The commissioners have rejected only one LNG project. Six LNG import terminals have been built or are under construction in the United States. Three times as many - 22 - LNG projects have been approved by FERC and the U.S. Coast Guard but are being held up by lawsuits or finances.

Baltimore County officials and community leaders said they were reviewing and analyzing the report yesterday afternoon. Called a draft Environmental Impact Statement - even though it also covers security, economic and other issues - the report released yesterday is hundreds of pages long.

Ellen Kobler, a county spokeswoman, said County Executive James T. Smith Jr. continues to believe that the proposed location of the LNG terminal is dangerous and would be detrimental to the nearby communities.

"Jim Smith continues to stand with families in eastern Baltimore County to oppose this facility, and that is not going to change," she said.

Security worries

The project has been criticized by elected officials at every level. They say the facility is too close to homes in the Dundalk area, especially to the historically black neighborhood of Turners Station, if there were an accident or a terrorist attack on the LNG tankers or facility.

Community leaders and company officials have been sparring about "worst-case scenarios" since the plant was first proposed more than two years ago.

The elected officials and activists also say the project would harm the environment because of sediment that would be stirred up from the dredging needed to be done over a 118-acre area of the Patapsco River near the shipyard. Some of the dredging would have be redone every six years, according to the report.

The company says that the dredging would remove some of the toxic substances left by industrial companies in the area and that the LNG business will generate $13 million annually in state and local taxes.

Some labor leaders support the project, which would be built by unionized construction workers.

Roderick "Rod" Easter, president of the Baltimore Building and Construction Trades Council, estimated that the project would generate four years of full-time work for about 375 workers.

"I feel like this is a positive step in the right direction," Easter said after reviewing the draft report yesterday. "It shows the right things are being done and that the Federal Energy Regulatory Commission is looking at it as a positive project that could work."

In February, the U.S. Coast Guard found that the company hasn't adequately addressed safety concerns but said the area could "be made suitable" for the LNG tankers with additional security measures.

The Coast Guard would require a combination of armed LNG escorts, patrols from the air and shore and periodic inspections by divers, according to unclassified summaries of the report, known as a water suitability assessment.

Before the final report is issued, the company needs to finalize the details about security and emergency response, in addition to several other technical reports.

The review by the commission and other federal and state agencies will ensure that the Sparrows Point project "either benefits human health and the natural environment or has manageable impacts," Kent Morton, an AES project manager, wrote in a statement yesterday.

"When viewed objectively - especially in light of the region's growing energy demands and stated environmental improvement goals - the AES Project fills a variety of needs for businesses, industry and, perhaps especially, the millions of area energy consumers who care about both our natural surroundings and rising energy costs," Morton said.

`Inappropriate'

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