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Top 5 Issues to Watch For In Feds’ Review Of Cove Point LNG Export Project

On eve of scheduled Environmental Assessment release, experts identify priority concerns
May 14, 2014
Washington, D.C. —

As the Federal Energy Regulatory Commission (FERC) prepares to release an Environmental Assessment (EA) of Dominion Resources’ controversial liquefied natural gas (LNG) export project for Calvert County, Maryland, experts have identified the Top 5 issues they’ll be watching for in FERC’s review—currently scheduled for May 15.

Environmental groups have intervened in the FERC proceeding, positioning themselves to sue the agency in the event of an insufficient environmental review of the $3.8 billion plan to pipe fracked gas from the Marcellus shale to the Cove Point facility, liquefy it, and export it to be burned in Japan and India. From the beginning, groups have called for, at a minimum, a thorough Environmental Impact Statement (EIS) to be conducted on the project. To date, FERC has not signaled that it will do so.

The following issues are among those that groups will be looking for in FERC’s forthcoming EA. If not addressed, they could serve as the basis for a legal challenge and will fuel continued public opposition.

 

1. Climate Impacts and Adaptation

The new liquefaction facility and associated utility-scale power plant that Dominion would have to build on-site to process gas for export would emit more heat-trapping carbon dioxide than all but three of Maryland’s existing coal plants. In all, given the energy-intensive process of extracting, transporting and processing gas for export, Cove Point could trigger more greenhouse gas emissions than all seven of the state’s coal-fired power plants combined. Additionally, according to forecasts by the National Oceanic and Atmospheric Administration, the area where the project is proposed is likely to be impacted by more frequent hurricanes and heightened storm surges from rising sea levels associated with climate change. Will FERC’s EA sufficiently address these concerns? If not, the agency should prepare an Environmental Impact Statement analyzing these significant impacts or ready itself for a legal challenge.

 

2. Community Safety

Unlike most other LNG facilities, Cove Point is located in the midst of a populated area. The ongoing liquefaction process requires hazardous and combustible chemicals, which will be trucked through the surrounding residential community and stored on site. FERC regulators have raised concerns with Dominion about the safety of the project—pointing to the potential for a fireball should any volatile chemicals seep out of the tanks and explode. Maryland officials conducted a risk analysis for a 2006 expansion of Dominion’s existing import facility and found that, even without the additional chemical storage Dominion is currently proposing to supercool the gas for export, a flash fire from a LNG storage tank alone could encompass a 4,265-foot “consequence zone”—an area which includes hundreds of homes. Notably, the assistant chief of Calvert County’s all-volunteer fire department has resigned in protest over the lack of preparedness for a catastrophe at Dominion Cove Point. Will FERC’s EA thoroughly address these concerns and require sufficient protections? If not, the agency should prepare an Environmental Impact Statement analyzing these significant impacts or ready itself for a legal challenge.

 

3. Marine Impacts

Each of the estimated 200 incoming vessels traveling to the facility will have to dump an estimated 16 to 25 million gallons of foreign ballast water into the Chesapeake Bay before loading and transporting LNG from Cove Point. Marine experts have raised concerns in the FERC proceeding that this ballast water, originating from India and Japan, could contain radioactive contamination, cholera, and other dangerous contaminants. Additionally, the facility will induce a 40-fold increase in ship traffic and LNG tankers are expected travel directly in the migratory path of the critically endangered North Atlantic right whale. The project dramatically increases the risk that the struggling North Atlantic right whale will be struck by these large LNG tankers. Will FERC’s EA sufficiently address these concerns? If not, the agency should prepare an Environmental Impact Statement analyzing these significant impacts or ready itself for a legal challenge.

 

4. Foreseeable Impacts of Upstream Fracking and Infrastructure

Dominion proposes to export about 281 billion cubic feet per year of LNG. The Energy Information Administration predicts that about 63 percent of that LNG will come from new gas production, which involves the controversial process of hydraulic fracturing, or fracking. Along with these activities come related infrastructure such as pipelines and compressor stations. All of this development carries serious environmental impacts, including air pollution, water pollution and deforestation. Will FERC’s EA sufficiently address these concerns? If not, the agency should prepare an Environmental Impact Statement analyzing these significant impacts or ready itself for a legal challenge.

 

5. Public Participation and Transparency

Typically, FERC sets a relatively brief 30-day public comment period on an Environmental Assessment—and does not require a public hearing. This facility has already received a record-setting number of public comments at the state level and Maryland’s U.S. Senators Ben Cardin and Barbara Mikulski have requested a series of statewide public hearings, which FERC has refused. Additionally, crucial pieces of safety information have been withheld from the public, designated by the agency as “Critical Energy Infrastructure Information.” Will FERC be responsive to community concerns, allow adequate time and hearings for public comment, and make previously withheld information available? If not, the agency and Dominion should expect continued and forceful community opposition.

 

BACKGROUND

Over the past year, the project has attracted steady challenges on multiple fronts, ballooning into a regional controversy. On February 20, more than 700 people rallied outside the Maryland Public Service Commission (PSC) headquarters in Baltimore, urging the agency to reject controversial air and water pollution permits for the Cove Point project. In March, 16 national environmental groups penned a letter to President Obama demanding that he hold FERC accountable to conducting an EIS for Cove Point as a first step in reversing course on his administration’s fast-tracking of LNG exports. In April, a coalition of national, regional and community-based groups opposed to the project delivered over 40,000 public comments to the PSC. In May, advocates and a Dominion shareholder filed an official complaint with the Securities and Exchange Commission over transparency concerns related to the project.

Contacts

Kathleen Sutcliffe, Earthjustice, (212) 845-7380

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