Mikulski urges 2nd look at reopening LNG facility


In light of terrorist risks since Sept. 11, U.S. Sen. Barbara A. Mikulski called yesterday for a complete re-evaluation of plans to reactivate the Cove Point liquefied natural gas terminal in Lusby, which sits within 3 1/2 miles of the Calvert Cliffs Nuclear Power Plant.

"There's renewed concern that terrorists will attack ships carrying fuels, posing a real risk," the Maryland senator said in a statement to the Senate yesterday.

On Oct. 11, the Federal Energy Regulatory Commission gave preliminary approval - with some conditions - to the Williams Cos. Inc.'s $150 million plan to bring parts of the facility back on line and add a fifth storage tank. The company is planning to open for tanker shipments by the second quarter next year.

But if regulators take action, it could mean a lengthier wait for activating the Cove Point facility. And federal agencies' increased scrutiny and security requirements could put a damper on the liquefied natural gas industry, which already has costly infrastructure requirements.

Cove Point stopped receiving tanker shipments of liquefied natural gas, or LNG, 20 years ago after a pricing dispute arose with suppliers from Algeria. That nation is a major world LNG supplier that is home to the Armed Islamic Group, a terrorist organization with suspected ties to al-Qaida - a source of concern for Mikulski.

Cindy Ivey, a spokeswoman for Williams Gas Pipeline, a Houston-based subsidiary of the Williams Cos., said the company is complying with security guidelines issued by the U.S. Department of Transportation, which regulates natural gas pipelines, and other government agencies. She added that the plant has been used as a storage facility for liquefied natural gas since 1994.

"We've followed all of the guidelines that they've issued," Ivey said. "Anything they have asked us to do, we have done."

Mikulski said yesterday that, so far, the permits have been looked at "under business as usual, but it's not business as usual."

"My position is that every permitting agency has to look at this through the prism of national security and national safety," she said, after making a speech on the issue to the Senate yesterday.

Mikulski said it's primarily the responsibility of federal agencies to closely examine Cove Point for terrorist risks, since it would be accepting liquefied natural gas arriving in foreign-flagged tankers from other countries. In liquid form, natural gas does not burn, but it becomes highly flammable if gas vapors mix with air.

Mike Gardner, Cove Point's district manager, said that "the likelihood of a catastrophic event is very unlikely. The design of the plant is such that an ignition [of LNG] would be contained within the property," he said. The plant sits on 1,017 acres in the town of Lusby.

Gardner, however, said that studies of the possible damage from a tanker being hijacked and blown up close to the Calvert Cliffs nuclear plant have not been done.

In the 1970s, when the terminal was receiving LNG shipments, there were safeguards for such an event, he said. In the past, before a tanker entered the Chesapeake Bay, it was boarded and inspected by Coast Guard personnel and then piloted by a bay pilot and docking pilot. The tanker was accompanied by a Coast Guard vessel and tugboats to its dock, and U.S. Customs and immigration officials then boarded to check the cargo and crew, he said.

James Shannon, director of field operations for Cove Point, said that the facility has increased on-shore and offshore security, because it's been operating as a storage facility for several years.

Company officials plan to meet with the U.S. Coast Guard next month to assess security and risk issues, he said.

In giving its approval to Williams in October, FERC's conditions included orders to develop an emergency response plan, on-shore and offshore spill prevention plans and other environmental measures.

David F. Hale, president of the Calvert County commissioners, said that citizens who live near the plant are "certainly concerned," but the county is counting on federal agencies to assess risk and security issues. The county, he said, supports its reactivation because "it's a good source of commercial tax dollars" and could bring in $2 million a year.

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