Final word is sought on LNG

The Baltimore Sun

The Baltimore County Council has twice passed legislation designed to stop the project, and it has been taken to court both times. State lawmakers introduced measures with the same goal in mind, but in two years, nothing has come of their effort.

County executives, two Maryland governors and the state's representatives in Congress all have come out against the proposal for a liquefied natural gas terminal on Sparrows Point. But even a collective this powerful faces what could be an insurmountable obstacle: A federal commission has the final authority to decide the project's fate.

Yesterday, with this reality in mind, Maryland's two United States senators announced a plan to reorder who has the last word on the matter.

In what Sparrows Point LNG opponents say could be a turning point in the dispute, the senators have introduced legislation that would give local and state officials veto power on the location of any LNG plant.

"What's happening with the LNG plant proposed in Dundalk is a classic example of why state and local governments need to be involved in the process," Sen. Benjamin L. Cardin said in a telephone interview yesterday.

The safety, security and environmental concerns that local and state officials have raised about the project are serious and should be given more weight, Cardin added.

Whether local officials will gain the power to block the LNG plant is far from certain. Advocates of the current federal approval process point out that the procedure was redesigned just a couple of years ago to prevent important but unpopular energy projects from being scrapped by residents who don't want them near their neighborhoods.

Cardin and Sen. Barbara Mikulski said their measure would strike a provision in the Energy Policy Act of 2005 that gives the five-member Federal Energy Regulatory Commission the power to pre-empt state and local concerns about proposed LNG facilities.

The legislation was also introduced in the House of Representatives by Reps. C.A. Dutch Ruppersberger, John P. Sarbanes and Elijah E. Cummings, who held a subcommittee hearing on the safety and security of LNG terminals this week in Baltimore.

Power struggle

With dozens of projects proposed by developers, communities across the nation have faced this power struggle between federal and state governments' authority to determine where a LNG plant can locate.

In some cases, elected officials are relying on appeals courts to resolve the conflict. Others have crafted legislation aimed at stopping LNG projects. But none of the laws has succeeded in stopping a project.

To block a LNG facility proposed in Fall River, Mass., the congressional delegation from the area added an amendment to another bill declaring a nearby bridge historic so it couldn't be torn down to clear a path for LNG tankers. The LNG developer responded by saying it would transport the fuel using smaller ships.

Because FERC is considering nine proposals to build on-shore LNG import terminals, Cardin said that he believes other Congress members will want to pass the amendment, returning authority stripped from local and state governments two years ago.

"This isn't aimed at the Sparrows Point project, it's aimed at the process," said Cardin, adding that he will continue to support other efforts to stop the Sparrows Point project.

AES Corp., a global power-supply company in Arlington, Va., submitted an application to FERC in January to build a terminal and processing plant at the former Bethlehem Steel shipyard and to construct an 87-mile pipeline to southern Pennsylvania, where the processed gas would be distributed.

The company is also seeking permission to dredge a 117-acre area near the shipyard to accommodate the large tankers carrying the imported liquid gas.

While federal law requires FERC to consult with state and local governments regarding safety concerns, those levels of government have no control over the final decision. A state government can decide not to issue permits based on environmental standards, but the U.S. Secretary of Commerce can override that decision.

"It's a huge frustration," said Baltimore County Executive James T. Smith Jr. "People should be looking a lot closer at the power FERC has. ... This impacts many, many communities."

The Baltimore County Council passed legislation last year banning LNG facilities within five miles of houses, but the law was struck down by a federal judge. Currently, the county is defending a law passed in January that bans LNG and oil facilities in environmentally sensitive coastal areas from a lawsuit filed by AES arguing that the county law is pre-empted by federal law.

State lawmakers introduced four measures to restrict the LNG project before the General Assembly session ended this month, but none of them passed, in part because some legislators felt it would interfere with a federal regulatory process.

An AES official issued a written statement yesterday in response to the latest efforts by elected officials from Maryland to stop its project.

"If each jurisdiction has veto power, the cumulative effect would likely drive the price of energy (to include electricity, since much of the nation's power plants are powered by natural gas) well-beyond the average consumers' affordability," Kent Morton, AES' manager for the Sparrows Point project, said in the statement.

The proposed measure would give states the same veto powers for onshore LNG terminal proposals as they currently exercise for offshore terminal proposals under the Deepwater Port Act, according to Cardin's office.

Cardin and other elected officials said it's wrong to assume that all LNG facilities and other energy projects are unwanted.

"There are remote areas that are alternatives," said Ruppersberger. "We need national energy policy, but we don't need it on the backs of residents of my district."

Ruppersberger and other officials are concerned by the proximity of houses and other businesses to the proposed LNG terminal. They say that the facility would be a terrorist target in the Washington region and would thwart revitalization efforts, and that the dredging to accommodate the LNG tankers would harm the Chesapeake Bay.

Over local objections

The Congress members say they are also concerned about federal regulators' record of approving LNG facilities over the objections of local officials and residents.

A plan to build an LNG import terminal in Providence, R.I., was rejected by the commission. Seventeen other projects, including the expansion of the LNG facility at Cove Point in Southern Maryland, have been approved by FERC.

FERC officials say that many projects are withdrawn before the developers formally apply for permission because the companies know their plans won't meet FERC standards.

laura.barnhardt@baltsun.com

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