U.S. court blocks proposed LNG terminal at Sparrows Point

Unanimous decision upholds Maryland's denial of water-quality permit

December 23, 2009|By By Mary Gail Hare | The Baltimore Sun

A federal appeals court in Richmond, Va., upheld Maryland's denial of a water-quality permit for a proposed liquefied natural gas terminal in eastern Baltimore County, issuing a decision Tuesday that halts the $400 million project for the time being.

The terminal and a related 88-mile pipeline have the approval of federal energy regulators, but Virginia-based gas company AES cannot proceed with construction until it secures the required state permits and meets nearly 170 conditions imposed by government agencies, most of them involving environmental and safety issues.

Kent Morton, an AES project director, called the decision disappointing but said the company remains confident that it can still obtain "all of the necessary environmental permits and approvals." The company is considering asking for a rehearing on its permit application, he said.

But Russell Donnelly, who has led community opposition to the project that would be built on the site of the former Sparrows Point shipyard, said the court ruling "may well mean the fight is over."

And Carl Tobias, a University of Richmond law professor who tracks appeals court rulings, said "it will be very difficult for AES to overcome this decision.

"This is a real victory for the state of Maryland," Tobias said. "The court is very clear in saying the state is correct and there was no dissent in this opinion."

Before tankers could navigate the harbor, AES would have to dredge a 118-acre turning basin and approach channel to a depth of 45 feet. AES has not submitted a plan for disposal of the dredge material, which could contain decades' worth of hazardous materials from industrial operations at Sparrows Point. Maryland Department of the Environment officials argued that such dredging could wipe out aquatic life in the area.

"Maryland examined the relevant data pertaining to the effect on water quality in the areas of the proposed deep channel dredging and articulated a satisfactory explanation for its denial on that basis, including a rational connection between the facts found and the choice made," the judges wrote in their decision.

Rod Easter, president of the Baltimore Building and Construction Trades Council, called the ruling "extremely disappointing."

"In these economic times, when you've got an opportunity for 400 jobs in clean energy, it's mind-boggling to me the state is still pursuing these frivolous lawsuits," said Easter.

Don Mohler, a spokesman for Baltimore County Executive James T. Smith Jr., said the ruling was "a major victory for everyone trying to prevent this ill-advised plant," and Rep. C.A. Dutch Ruppersberger said the court has underscored the right of the state - rather than a company - to "determine what is best for its citizens and its natural resources."

Baltimore Sun reporter Timothy B. Wheeler contributed to this article.

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