- The Washington Times - Thursday, April 26, 2012

Cove Point in Southern Maryland has become the latest flash point in the fight between the fossil fuels industry and its longtime foes in the environmental movement.

Citing a unique Carter-era agreement, the Sierra Club says it will veto plans by energy giant Dominion to build the first natural gas liquefaction and export facility on the East Coast, a site that would handle booming supplies from the Marcellus Shale and other vast deposits for shipment to Asia and elsewhere.

The 1970s legal settlement, the Sierra Club argues, gives it the authority to halt any project that would “change the footprint” at Cove Point, which currently hosts a little-used natural gas import facility and includes sites designated as Maryland natural heritage areas.

Dominion maintains that the project, which could export about 750 million cubic feet of gas per day and would create thousands of jobs, satisfies the agreement, and the firm has all intentions of moving forward, whether environmentalists like it or not.

Neither side denied Thursday that they will end up in litigation over the proposed facility, which Dominion plans to begin constructing as early as 2014 and expects to have operational by 2017.

“As with any project of this magnitude, we would expect some opposition from various special interest groups,” Dominion President and CEO Thomas F. Farrell II said in a statement. “We have reviewed the regulations and agreements governing the site and are confident we can locate, construct and operate … the facility with minimal environmental impacts.”

The Sierra Club says the plant would harm coastal forests, pollute the Chesapeake Bay and be indirectly responsible for environmental damage in other areas.

By taking advantage of huge natural gas reserves in Pennsylvania, Ohio and other states, environmentalists argue, Dominion is promoting hydraulic fracturing, or fracking, the practice of using water, sand and chemicals to crack deep underground rock and release huge quantities of fuel.

Environmentalists have long argued that the process ruins drinking water supplies and leads to air pollution. Oil and gas industry leaders say it’s safe.

“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,” Sierra Club Executive Director Michael Brune said Thursday. “The Sierra Club cannot and will not support [natural gas] exports from Cove Point, and we will reject Dominion’s proposal.”

Sierra’s clout in Cove Point appears to be unique, and Dave O’Leary, the Maryland chapter chairman, said he is proud that his chapter is “the first” responsible for rejecting what he called “dirty liquid natural gas exports.”

The decades-old agreement dates back to Cove Point’s construction.

Several groups, including the Sierra Club, signed onto a contract dictating the types of facilities that can be built there and exactly where they could be located in order to minimize environmental disturbances. Dominion is now subject to that document, and a 2005 change, Sierra argues, prohibits using Cove Point for exports.

Despite Sierra’s reservations, the company says, it can build the plant with little or no additional disturbance to the surrounding landscape. It also is stressing the huge economic shot in the arm the project could provide, including at least $1 billion in taxes to federal, state and local governments and a significant dent in the nation’s annual trade deficit.

The construction of natural gas export facilities also represents a dramatic change for the U.S. energy sector. A decade ago, analysts were predicting that the nation would have to begin importing huge quantities of the fuel in order to meet Americans’ demand. But the discovery of the Marcellus and other shale reserves has completely changed the equation.

In 2009, the U.S. overtook Russia as the world’s largest natural gas producer. Last year, the nation produced 23 trillion cubic feet of natural gas, according to a report from the Institute for Energy Research.

The boom also has led to record-low prices, which hovered near $8 just a few years ago. On Thursday afternoon, the price per 1,000 cubic feet was just $2.13.

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