The controversy over proposed modifications to Dominion’s liquefied natural gas terminal at Cove Point reared its head Thursday during the first of two days of hearings before the Maryland Public Service Commission about part of the energy company’s plan.
Virginia-based Dominion Resources Inc. is seeking to move forward with a $3.8 billion construction project to adapt its Cove Point facility in Calvert County — built in Calvert County in the 1970s as a natural gas import terminal — to handle exports. The facility would be outfitted with equipment to cool the gas into its liquid form so it can be shipped out.
Specifically, the PSC hearing deals with Dominion’s request to build an electric generating station — two gas-fired turbines — that would drive the site’s refrigeration compressors, which are needed to the cool the natural gas.
Heat put out from those turbines would create steam that would then be used to generate additional electricity for other uses on the 131-acre site in Lusby.
Dominion applied for permission to build the turbines in April of 2013; the commission said it will make a decision by May 30 of this year. That date could be pushed back, however, if commissioners decide to extend the period for public comment. A public hearing is scheduled for March 1 in Lusby, and the public comment period currently runs through March 3, according to a PSC spokeswoman.
Even if the PSC signs off, Dominion still needs additional approvals and permits — about 50 in all — before the entire project gets the go-ahead. The existing Cove Point LNG terminal is regulated by the Federal Energy Regulatory Commission, whose authorization is required if the company is to convert Cove Point into an export terminal.
FERC has been working on a comprehensive review of the project since 2012, and Dominion is still awaiting a final decision.
If the Cove Point project is approved, the facility will be the first LNG export terminal on the East Coast, although many more are being proposed around the country.
Opponents, who include environmental groups and some Calvert County residents, are working hard to sway regulators and the public by launching several lines of attack against the project.
One tactic is to question the projected economic benefits to the state and the county. Josh Berman, a staff attorney with the Sierra Club, argued Thursday that while the project will have minimal positive effects on the economy, exporting LNG could substantially raise the price of natural gas for domestic consumers.
The local impact of exporting LNG was a key component of Berman’s cross examination of Michael D. Frederick, Dominion’s vice president of LNG operations at Cove Point. Frederick admitted that a report by the U.S. Department of Energy found that prices would increase for domestic natural gas consumers if U.S. exports reached a certain level, but he said he believes the amount Dominion plans to export would lead to “an overall benefit” for the country and for Southern Maryland in particular.
Frederick also said — after much pressing by Berman — that most of the project’s expected economic benefits are not tied to the ability to export the gas; jobs and wages would get a boost if the company constructed the facility but didn’t actually export the product.
Frederick emphasized that none of the construction would occur if the company did not fully intend to export the gas, but Berman’s goal with his questioning was fairly clear: He wanted to illustrate his view that the crux of the project — building export capabilities — would neither improve the local economy for most residents nor stabilize U.S. energy markets.
Opponents are also concerned about the project’s potential for environmental and safety hazards. As Thursday’s hearing dragged on inside the William Donald Schaefer Tower in Baltimore, protesters rallied in front of City Hall before marching over to that building, encircling it with a 100-foot-long mock gas pipeline.
The rally was led by the Sierra Club’s Maryland Chapter and the Chesapeake Climate Action Network, and attracted more than 500 people — as many as 1,000 by one estimate.
Among them was Democratic gubernatorial candidate Del. Heather Mizeur, who reiterated her opposition to the project and called on Gov. Martin O’Malley to join her in rejecting it. She is the only candidate for governor who publicly opposes the proposal.
Protesters charge that the project will lead to a spike in hydraulic fracturing, or “fracking,” a controversial practice for extracting natural gas from underground shale rock. Environmentalists say fracking can pollute water sources and is a major greenhouse gas-emitter; they worry that bringing an LNG export facility to Maryland will “require an expanding network of new fossil fuel infrastructure,” according to the climate action network.
“While the gas industry would profit, we would pay the price of scarred landscapes, polluted air and waterways, livelihoods at risk, and worsened climate change,” the group says on its website.