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Sierra Club may go to high court on Cove Point

Alissa Gulin//Daily Record Business Writer//March 4, 2014

Sierra Club may go to high court on Cove Point

By Alissa Gulin

//Daily Record Business Writer

//March 4, 2014

An environmental group is disputing the Court of Special Appeals’ ruling last week that Dominion Resources Inc. is permitted to export liquefied natural gas from its Cove Point terminal in Southern Maryland and said Tuesday it is weighing another appeal.

Cove Point
The pipelines at Cove Point have been used for importing LNG, but the Sierra Club disputes that an agreement with Dominion Resource allows for exporting LNG. (File photo)

The Sierra Club and its Maryland chapter argue Dominion is prohibited from using the Cove Point facility for any activities other than those explicitly authorized by a 2005 agreement between the two parties.

Dominion has previously used the Cove Point terminal to import liquefied natural gas (LNG) — importing is explicitly permitted in the 2005 agreement — but the energy company has proposed and is pushing forward with a plan to add exporting capabilities there.

The Court of Special Appeals affirmed the Calvert County Circuit Court’s ruling last January that the agreement does allow LNG exports from Cove Point and that its wording is “unambiguous.”

“We’re disappointed in the decision,” said Josh Tulkin, director of the Sierra Club’s Maryland chapter. “We’re certainly considering an appeal [to the Court of Appeals], but we’re still in the process of reviewing the opinion. We haven’t made up our minds yet.”

To export the gas, Dominion would have to transport the LNG through a pipeline from facilities at the terminal site to tankers docked at an offshore pier. From there, it would be shipped overseas. The agreement with the Sierra Club permits activities at Cove Point related to “the receipt by tanker and the receipt or delivery by pipeline of LNG.”

Even though the word “export” does not appear in that phrase, it “clearly means that natural gas may be sent both ways — to and from the Terminal Operation site,” Judge Michele D. Hotten wrote in the opinion issued Friday.

But Tulkin said the Sierra Club disagrees with that interpretation.

“We believe the language was intended to allow for importing and was not intended to permit exporting,” Tulkin said. “You still need that pipeline to bring the imported gas from the pier to the terminal — the pipeline is ‘delivering’ the LNG to the terminal, and the terminal is ‘receiving’ the LNG through the pipeline. It doesn’t make sense for the word ‘delivery’ in that phrase to refer to exporting.”

If the agreement were intended to permit exports, Tulkin continued, the wording would have been more obvious.

“The first part of that phrase — ‘the receipt by tanker’ — is the part that refers to importing, and it suggests a one-way transmission,” he said. “Otherwise, it would have said ‘receipt and delivery by tanker.’ But it did not.”

The Sierra Club also opposes Dominion’s proposed $3.8 billion project for environmental reasons. Protesters say the project will lead to a spike in hydraulic fracturing, or “fracking,” a controversial practice for extracting natural gas from underground shale rock. Environmentalists worry that bringing an LNG export facility to Maryland will make the natural gas industry more lucrative, which they say would increase the prevalence of fracking here.

The Court of Special Appeals did not comment on the environmental issues, instead leaving those matters up to regulatory bodies. Dominion is awaiting several approvals from state and federal officials, which it must receive before starting any work.


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