September 21, 2012|By Timothy B. Wheeler, The Baltimore Sun
Sierra's Tulkin said Dominion has been a good steward of the property outside its fenced complex. The company has donated $125,000 a year to a local land trust for environmental education and preservation efforts, and doubled that to $250,000 in recent years. It also spent millions — it won't say exactly how many — on a project to restore the freshwater marsh after it was damaged by a storm several years ago.
"We've tried to be friends with the environment," Donovan said.
The agreement between the environmental groups and the terminal owner has been revised and rewritten several times over the years, as ownership changed hands twice. The most recent rewrite occurred in 2005 to accommodate some terminal upgrades.
"When we did this deal with them back in 2005, no one was thinking export," said Craig Segall, a Sierra Club attorney. "We were doing a minor expansion for import, and we thought that was it."
But imports have lagged, as U.S. natural gas prices fell to historic lows, the result of the sluggish economy and a flurry of domestic drilling, notably in the gas-rich Marcellus shale formation underlying much of the Mid-Atlantic region. Only three tankers have called at Cove Point since March 2011, two of them bringing in LNG just to help maintain the super-cold temperatures in the storage tanks.
Dominion sees a potential bonanza in exports, as gas costs more in Asia and Europe than in the United States. Exporting LNG will help "stabilize" prices, albeit at a higher level, and revive drilling and production, Raikes said.
Others, though, point out that those higher prices will cost U.S. households and businesses. Natural gas is widely used for heating homes and increasingly for generating electricity and powering factories. Exports could increase U.S. electric bills by 1 percent to 3 percent, and gas bills by 3 percent to 9 percent, over the next two decades, according to a study by the federal Energy Information Agency.
Environmentalists also worry that exporting will spur a new wave of fracking.
"A big question for us," Segall said, "is if you export a lot of gas, you have to frack a lot of gas."
Most environmental groups support Gov. Martin O'Malley's decision to impose a de facto moratorium on drilling in Western Maryland until studies weighing its impact are completed. On Thursday, two groups vowed to go further, seeking state legislation next year imposing a permanent ban on fracking. The Sierra Club also has filed objections to other terminals seeking LNG export authority, Segall said.
Beyond that, the club just isn't comfortable with how the terminal's expanded activity to handle gas exports would affect Cove Point and surrounding residents.
"This is a space that was intended to be a protected wilderness, a state park," said Sierra's Tulkin. "We believe we should do everything we can to protect that space."
The other environmental group involved in the pact with Dominion, the Maryland Conservation Council, has parted company with the Sierra Club, at least on the legal issue of what their agreement says.
"The way we read the agreement," said Paulette Hammond, president of the Baltimore-based council, "Dominion Cove Point LNG has every right to do what they're doing, mainly because it is not outside the boundary that was set originally for them."
Dominion originally sought the two groups' approval for expanding beyond its fence line and suggested it might be willing to buy and preserve some environmentally important land elsewhere in return. The discussion never got down to specifics, though, because the Sierra Club made clear it wouldn't agree. Company officials now say they can build the gas liquefaction plant and any other needed facilities within the existing terminal area.
Hammond said the council, which has split with most other environmental groups to support building more nuclear reactors, is still studying fracking and has yet to take a position on it. While members have been debating the drilling technique's pros and cons, she said, she personally favors selling LNG abroad. And she questioned how drilling practices would be influenced by stopping the terminal project.
"How can you stop it?" she asked.
Nearby residents are split on the project. Alan Spahr, president of the Cove Point Beach Association, said that the bayfront community of 130 full-time households adjoining the terminal is equally divided.
While the export project likely would generate more traffic on the only road to and from the community, and bring more tankers into the bay with all the attendant risks, Spahr said he was swayed by the potential for more jobs.
"Personally, I don't have a problem,'' said Spahr, a software designer who said he's lived there for about three years. He called the terminal an "excellent neighbor."
