State gives gas export facility go-ahead

Maryland's top elected officials gave a key approval Wednesday to developing a natural gas export facility in Southern Maryland that some fear could threaten residents' safety and the environment.

In their first and only vote on the controversy, Gov. Martin O'Malley and the other two members of the state Board of Public Works allowed the $3.4 billion project to proceed, following more than 21/2 hours of testimony.


For O'Malley, it was a test of where he stands in the national debate over the environmental impacts of the booming U.S. shale gas industry — especially the controversial "fracking" extraction process — as he eyes a run for the White House.

Virginia-based energy company Dominion wants to convert its little-used natural gas import terminal at Cove Point in the Chesapeake Bay into an export facility. Shale gas extracted from Pennsylvania, West Virginia and elsewhere would be piped there, liquefied and shipped via tankers to lucrative foreign markets.


Business, labor and many local elected officials back the project, arguing it will generate jobs and help the nation achieve energy independence. But opponents contend nearby residents are at risk from a fire or explosion, and that the facility could aggravate climate change by enabling more gas drilling and production.

At issue Wednesday was a seemingly minor permit to allow Dominion to build a pier in the Patuxent River at Solomons so construction material could be moved in by barge to build the facility.

But company officials said they could not go forward without the permit. Now the project awaits only a final go-ahead from the Federal Energy Regulatory Commission.

Supporters and opponents began gathering outside the State House an hour before the meeting and packed the board room. O'Malley, who hadn't taken a public position on the project, gave the outnumbered opponents more time than supporters before joining Treasurer Nancy K. Kopp and Comptroller Peter Franchot in voting for the permit.


The governor and Kopp both said the only issue legally before them was the pier, not the larger export facility.

State regulators, who recommended approval, said their main concern with the pier was the potential disturbance of a 2-acre patch of an oyster reef in the river. The company has pledged to remove the pier once the facility is built, restore the shoreline and plant twice as many oysters as the pier might wipe out.

Opponents argued the board should use its control of the pier permit to kill the export facility, or delay it until a more thorough study of fire and explosion risks could be done.

Citing explosions at other gas facilities, a group of residents, the Calvert Citizens for a Healthy Community, had written O'Malley weeks ago, asking that he order such a study, similar to a review the Department of Natural Resources had done in 2006 when Dominion was expanding its import terminal at Cove Point.

Opponents noted that O'Malley ordered a state safety review when another company proposed building a liquefied natural gas terminal at Sparrows Point in Baltimore, which was subsequently blocked by the state for environmental reasons.

O'Malley, a Democrat, looked on without responding as opponent after opponent pleaded with him for the study. After the meeting ended, his energy adviser, Abigail Hopper, said O'Malley had already decided against ordering another risk study, but didn't say so publicly because he wanted to let opponents have their say.

The governor said before casting his vote that safety and environmental concerns raised by opponents had been reviewed by federal and state regulators, who in May found the project posed no significant risks.

He also said he believed any pollution produced by the project would fall within the limits of the state climate-change mitigation effort he pushed through the legislature in 2009.

While acknowledging the "broader" issues around expanding natural gas production, O'Malley said the question before the board was limited to the pier, and he was convinced the impacts to the river and oyster reef would be mitigated.

Franchot said his vote did represent an endorsement of the project, citing favorable reviews by federal and state regulators and the project's sizable economic impact.

Tracey Eno, a spokeswoman for the Calvert citizens group, said she believed state officials had "missed the point." While company executives pointed to nearly 40 years of safe import operations at Cove Point, she said the proposed export facility represents a major change that poses greater threats.

Eno said she believed O'Malley's presidential ambitions may have influenced him, but suggested he lost support in the eyes of environmentally minded voters.

"How can you be a green governor," she asked, and yet allow a facility that generates hazardous air pollutants and climate-altering gases.

Dominion executives welcomed the board's decision. Michael Frederick, a company vice president overseeing the Cove Point project, issued a statement saying it "further acknowledges" that the export facility would have "minimal impact" on the environment while providing significant economic benefits to Calvert County, Maryland and the nation.

Company officials say facility construction will employ up to 1,500 at a time, with 75 permanent jobs added to handle the new operation. The company projects it will pay Calvert County an additional $40 million a year in property taxes.

Frederick also said shipping liquefied natural gas to customers in Asia should help fight global climate change, as it would generate less climate-altering carbon dioxide than coal when burned in power plants.

Opponents argue that by opening up lucrative foreign markets for gas, the project will spur more drilling and extraction using hydraulic fracturing, a technique many environmentalists say contaminates drinking water wells and generates air pollution. Industry officials as well as federal and state regulators have said those risks are minimal and controlled.

While Pennsylvania and West Virginia have seen a gas drilling boom and a flurry of complaints about its impacts, Maryland has had a de facto moratorium for the past three years to study whether "fracking" can be done safely.

An advisory commission appointed by O'Malley is expected to present its final recommendations this fall. State regulatory agencies already have published a report outlining drilling safeguards they are considering.

O'Malley said Wednesday that he considers natural gas a "bridge" from relying on coal and oil until more renewable energy like wind and solar can be developed. In the meantime, he said government must do all it can to protect the environment by setting the "highest and best standards," from the time the gas is extracted through its shipment via pipelines and from export facilities.

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