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Natural gas exports eyed through Calvert County

Environmentalists question Maryland role enabling 'fracking'

February 10, 2012|By Timothy B. Wheeler, The Baltimore Sun

Dominion is investigating the export potential of Cove Point because of its connection via pipelines to the Marcellus shale gas fields in Pennsylvania and West Virginia, Donovan said, and to Utica shale gas recently discovered in Ohio.

Some have questioned the wisdom of permitting significant gas exports, worried that it could drive up prices domestically.

A coalition of environmental groups has filed comments with the Energy Department opposing Dominion's application, arguing that exporting gas will increase utility bills of American consumers and spur more shale gas drilling, which they contend is fouling groundwater and streams.

Michael Helfrich, the Lower Susquehanna Riverkeeper, says he's also worried about construction of pipelines to get the gas to the terminal, which he fears will chop up forests and increase polluted runoff to the river and the bay. Already, two new pipelines are being laid on either side of the river, he said.

"I see all the shale gas north of me. I see the export facility south of me. I just see a crisscross of new pipelines coming from every direction," he said.

Manufacturers also are worried that a surge in U.S. gas exports could drive up prices for the fuel, wiping out the benefits they have seen lately from low energy prices.

A recent study by the Energy Information Administration projected that if all the gas export requests pending now were granted, prices of the fuel could soar by 36 percent to 54 percent by 2018, depending on economic conditions and how rapidly natural gas production could be increased to take advantage of higher prices. Electricity prices also would go up between 2 percent and 9 percent, the study forecasted, though it assumed utility bill increases would be more limited because power plants would switch from burning natural gas to coal.

"By anyone's measure, these are substantial cost increases," Paul Cicio, president of the Industrial Energy Consumers of America, said in a statement. The manufacturers' group warns that higher gas costs will hurt the economy and cost factory jobs.

Meanwhile, another EIA study recently cut in half estimates of the amount of gas available in the ground in the United States, calling into question just how much supply could be increased and for how long.

Dominion spokesman Donovan contended that the federal energy studies "have shown that there's enough gas to both meet our demand locally and ship it overseas. There's just so much of it, it would have only a small effect on the price, and it would create jobs."

The company predicts that converting to exports at Cove Point would allow it to hire about 70 more employees, on top of the 75 who already work there. Opening up new, more lucrative markets abroad for domestically produced gas could generally boost the U.S. economy, reduce the national trade deficit and support more than 14,000 new jobs, the company forecasts.

The company says upgrading the terminal for exports also could generate about $40 million a year in additional property tax revenues for Calvert County, a sizable increase for the Southern Maryland county, which has a $232 million budget for this year.

"Obviously it will help our tax base in a very positive way," said Gerald W. Clark, president of the Calvert board of county commissioners.

He said Dominion has been a "good corporate neighbor," despite what he characterized as "minor" complaints from neighboring residents about noise generated by the terminal's facilities. Though there's always at least a remote risk of catastrophic explosion of the natural gas stored there, Clark said, officials consider it a safe operation.

"We live every day with a gas plant [and] a nuclear power plant, and you'd be hard-pressed to come down to Calvert County and find people that will say anything negative about the facilities," he said.

As for environmental opposition to enabling fracking, Clark countered that "the gas is there already" and being extracted in other states, even if Maryland officials haven't decided whether to permit drilling in this state. "It would be nice to have something we can export in this country," he said.

tim.wheeler@baltsun.com

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