Cove Point gas liquefaction plant in Calvert County approved

September 29, 2014|By Colin Campbell | The Baltimore Sun

Federal regulators gave final approval Monday for energy company Dominion to build the East Coast's first natural gas liquefaction plant at its Cove Point site in Calvert County, a project that has raised concerns from neighbors and environmentalists.

The $3.8 billion project would allow Dominion to export liquefied natural gas through the facility on the Chesapeake Bay. It plans to complete the project and begin exporting by June 2017, adding about 75 jobs to the approximately 100 already at the site.

Dominion, an energy company based in Richmond, Va., welcomed the decision by the Federal Energy Regulatory Commission, which spent two years reviewing the project, conducting hearings and poring over 650 written comments submitted by the public and local, state and federal agencies.

"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.

Aside from jobs, the export facility is expected to contribute $40 million a year in tax revenue to Calvert County.

The planned facility sparked significant opposition from environmentalists concerned that the export site could lead to increased hydraulic fracturing, or "fracking," in which pressurized liquid is pumped into wells to fracture rock and release trapped natural gas. Some neighbors expressed worries about the safety of the project itself.

Mike Tidwell, of the Chesapeake Climate Action Network, which has strongly opposed the project, promised to fight the decision in court, "for the safety of Marylanders and for people across our region facing new fracking wells and pipelines."

"FERC's decision is the result of a biased review process rigged in favor of approving gas industry projects no matter how bad the environmental and safety concerns," Tidwell wrote in a statement. "FERC refused to even require an environmental impact statement for this $3.8 billion facility right on the Bay."

The FERC decision included 79 conditions the company must follow, including creating a complaint system and doing a noise survey for neighbors, as well as various required check-ins with authorities during and after construction.

The regulatory agency deemed the proposal "in the public interest." It is the fourth natural gas export facility to be approved by FERC. The other three are in the Gulf of Mexico, and 14 more are pending the agency's OK.

In approving the Southern Maryland project, the commission dismissed objections from other energy companies about various aspects of Dominion's plan and complaints from environmental groups that the FERC staff's environmental assessment of the Cove Point conversion skimped on safety and environmental concerns. The commission agreed with its staff that if Dominion built and ran the facility in keeping with conditions set by FERC, it would not significantly affect "the quality of the human environment."

The Cove Point complex already imports natural gas, and Dominion has said exporting the gas mostly would use existing infrastructure inside the company's 40-year-old, 131-acre complex in Lusby.

The addition of export ability, including a plant to chill natural gas to the point it becomes a denser liquid for shipment overseas, reflects a shift in the global energy market caused by the natural gas boom occurring in the United States as a result of fracking.

"Now that our nation is developing a burgeoning surplus of natural gas, Cove Point can help send a small portion of that surplus to allied nations looking for stable supplies of clean energy, supporting economic development and replacing coal as a fuel," Leopold said.

Dominion said it has reached agreements with three companies to purchase natural gas through Cove Point at its full capacity. The buyers include a Japanese gas utility, a Japanese trading company and the U.S. unit of one of India's largest gas distributors.

Once it opens, the company could move up to 860,000 dekatherms of liquefied natural gas per day. One dekatherm is 1,000 cubic feet of natural gas, enough to meet the heating, hot water and cooking needs of the average home for four days.

The company said it will take several weeks to review the order before deciding whether to accept it. If it does, Dominion would file a plan showing how it would comply with FERC's conditions.

"Now the journey begins of making certain that residents of Lusby, those most closely affected, are heard," said Steven R. Weems, a Calvert County commissioner. "We need to make sure that Dominion holds up their end of the arrangement."

Leopold dismissed the environmental and safety concerns, saying that the risks have been studied and will be mitigated.

"Cove Point has been a good neighbor to the region and to the Chesapeake Bay for almost four decades, and we expect that record to continue," Leopold said.

Calvert County commissioners support the project based on its economic benefits, and they approved a tax break of 42 percent for nine years for the expansion. The company will pay $40 million more annually in property taxes for the next five years, boosting the county's total property tax revenue by more than 25 percent.

Commissioner Evan K. Slaughenhoupt Jr. said he was reading through the FERC decision at home Monday evening. He called it "great news."

"I think that all of Calvert County will benefit from this," Slaughenhoupt said.

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

cmcampbell@baltsun.com

twitter.com/cmcampbell6

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.