Dominion Resources' Cove Point Natural Gas Terminal Faces Challenge

WASHINGTON (AP) — The Sierra Club said Thursday it will try to block an energy company's plan to export liquefied natural gas to find new markets for the drilling boom that has flooded the Mid-Atlantic with natural gas.

Virginia-based Dominion Resources Inc. is seeking to export 1 billion cubic feet per day through a terminal it owns in Maryland. A previous legal settlement dating to the 1970s gives the Sierra Club the ability to reject any significant changes to the purpose or footprint of the existing natural gas terminal in Cove Point, Md., 60 miles southeast of Washington.

The environmental group says the export project could result in major damage to the Chesapeake Bay and nearby Calvert Cliffs State Park in Maryland.

"The damage that this project would bring to the Maryland coast as well as the disastrous effects of the fracking boom on communities in states like Pennsylvania make it clear that exporting liquefied natural gas is bad news for Americans' air, water and health," said Michael Brune, executive director of the Sierra Club.

Hydraulic fracturing, also called fracking, involves blasting mixtures of water, sand and chemicals deep underground to stimulate the release of gas. Environmental groups and other critics believe the chemicals have polluted drinking water supplies, but the industry says there is no proof.

Exporting liquefied natural gas, or LNG, would drive up the cost of domestic natural gas, Brune said, reversing the effects of a natural gas boom that has driven U.S. prices to 10-year lows.

Dominion says the Cove Point terminal is well situated to export gas from the prolific Marcellus Shale formation, which lies beneath Pennsylvania, New York, West Virginia, Ohio and other states.

Thomas F. Farrell II, Dominion's president and CEO of Dominion Resources, said the company intends to go forward with the project.

"We have reviewed the various regulations, agreements and rulings from various regulatory bodies governing the site and are confident that we will be able to locate, construct and operate a liquefaction facility at Cove Point," Farrell said in a statement.

Dominion will design the plant to minimize damage to the environment, Farrell said.

The dispute over the Maryland plant comes as federal regulators have approved the first large-scale natural gas export terminal in the United States. Several other proposals are pending.

The Federal Energy Regulatory Commission cleared construction of the Sabine Pass LNG terminal in Cameron Parish, La., last week. The facility, owned by Houston-based Cheniere Energy Inc., will chill natural gas into a liquid that can be shipped on tankers, allowing U.S. producers to export natural gas overseas for potentially huge profits. An existing LNG import facility at the Louisiana site will also be converted to handle imports.

The push for exports represents a turnaround from just a few years ago, when U.S. companies were seeking to build LNG terminals that would receive natural gas from other countries.

Those plans changed as improved drilling techniques, such as hydraulic fracturing and horizontal drilling, allowed drillers to gain access to natural gas wells that were hard to reach in the past. Horizontal drilling can increase production far beyond a vertically drilled well.

Brune, of the Sierra Club, called on the Energy Department to review potential dangers of fracking. No federal agency has fully analyzed or disclosed such dangers to the public, he said.

Gas companies say fracking has been used safely for decades.

The Sierra Club said earlier this year that it accepted more than $26 million from Chesapeake Energy, a leading natural gas company, while promoting natural gas as a cleaner, more efficient alternative to coal. Brune said the donations were received from 2007 to 2010 and have now stopped.

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Comments

[ECJIM 3ABTPA BONHA]

12:13 PM on 05/03/2012

I can't tell you how many kayak trips I have taken on the bay and how many times I have seen pollution warning signs about eating the fish that come from the bay. I have also taken alot of trips on the lower Potomac and each time I end up sick within the next few days. Between sewage, trash, poultry farms and rain run off.... the bay is already down an out. We only have one Chesapeake, but it takes a backseat to profits. I hope this doesn't work out in Dominions favor.
This is a few years old but Check this story out....
http://cbf.typepad.com/bay_daily/2009/09/waterman-loses-leg-to-lifethreatening-bacteria.html

[Michigan Joe]

09:15 AM on 04/30/2012

When our domestic needs are still not easily met, why would our government and our American industries "export" energy? This is anti American and talks loudly of greed.

[BluePhantom2]

07:13 PM on 04/27/2012

The Sierra club just isn't about environmental stewartship anymore are they? The EPA administrator under oath before congress stated that there is no evidence that fracking has affected ground water aquifers. Naural gas export is a very safe operation if done correctly so whats the big deal about the environment? Unless it's really not about the environment anymore?

[Jtt]

02:18 PM on 04/29/2012

Fracking has polluted waterways. Caused minor earthquakes and led to contamination of wells.

Fracking fluid may actually start showing up in wells. Especially after decommissioning. We dont know.

The practice has become widespread in the last decade without sufficient study.

Natural gas use and leakage contributes to climate change and acidification.

[lightningbolt]

11:37 AM on 04/27/2012

The Chesapeake is already too dirty.  It contains the sewer waste of Washington DC and Baltimore as well as the toxic chemicals from fracking on the Susquehana River in PA.  This gas plant should be blocked.  The bay cannot withstand more pollution.

[Bullitt08]

09:21 AM on 04/27/2012

What a bunch of idiots!
The Sierra Club is opposed to all kinds of hydrocarbon extraction and use for any purpose.
It is also opposed to all mining activity.

In no way does export of LNG do any damage to the Chesapeake Bay or that state of Maryland.
We are not talking aboiut crude oil here.

The possibility that some fracking wells may or may not contaminate aquifers is not material to the decision whether or not to permit export.
Nor is the argument that exporting LNG might increase natural gas prices slightly.

Yes, we do have a right to know what chemicals are being used for fracking and we do need tough state and federal laws to prevent contamination of water, ground, and air by fracking operations as well as force the well operators to clean up any messes.

[GeorgeP922]

12:36 AM on 04/30/2012

I am payin 50 cents a therm in Baltimore.

Although I find fracking disgusting, and the hydrocarbon business hates America, this will raise my prices.

Usually the only people who support the oil companies are millionaires.

[golfvue3]

06:57 AM on 04/27/2012

This is an energy based recovery - to the extent there is a recovery.

These people are out to stop the progress of the US

[tmpjunior]

09:22 AM on 04/27/2012

They are out to protect the resources they value. You may disagree on the value of the resources, but they aren't the Koch Brothers and there is nothing Machiavellian in what they are doing.

[NL207]

01:32 PM on 04/27/2012

You are absolutely right! The Sierra Club is not Machiavellian. They are Luddites who went to school at the Karl Marx Academy of Science.

[lightningbolt]

11:38 AM on 04/27/2012

Fossil fuels do not represent progress.  They represent the fuels of the last two centuries.  Clean renewable energy represents progress.

[NL207]

01:33 PM on 04/27/2012

" Clean renewable energy "

And what might that be? Fermented bull crap?

[Moose Luck 99]

07:11 PM on 04/26/2012

http://www.democratsagainstunagenda21.com/sustainable-development-article.html

Sierra Club's proposal to reorganize North America into 21 Ecoregions. The Sierra Club, one of hundreds of non-government organizations actively working to bring about this transformation, has suggested that North America be divided into 21 ecoregions, that ignore existing national, state, and county boundaries. In 1992, they published a special issue of their magazine which featured a map, and extensive descriptions of how these ecoregions should be managed. (1) The function of government will also change. The legislative
function, especially at the local and state level, will continue to diminish in importance, while the administrative function will grow. Already, in some parts of the country, counties are combining, and city and county governments are consolidating. Regional governing authorities are developing; taking precedence over the participating counties, which will eventually evaporate. State governments will undergo similar attrition; as regulations are developed on an ecoregions basis, there will be less need for separate state legislation. The administrative functions of state governments will also collapse into a super-regional administrative unit, to eliminate unnecessary duplication of investment and services.