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Keystone XL critics target Dominion LNG export proposal in Maryland

03.18.2014  | 

The energy required to liquefy and ship gas at Dominion's s proposed Cove Point terminal in Maryland will raise the fuel’s GHG emissions to the level of coal, says Mike Tidwell, director of a climate group.



Environmentalists fighting the Keystone XL pipeline are rallying to block a Maryland natural gas export terminal as momentum builds to use the US fuel as a weapon against Russia’s intervention in Ukraine.

The energy required to liquefy and ship gas at Dominion Resources' proposed Cove Point terminal in Maryland will raise the fuel’s greenhouse-gas (GHG) emissions to the level of coal, says Mike Tidwell, director of the Chesapeake Climate Action Network. Such terminals threaten the climate like pipelines tied to developing oil in Alberta, such as Keystone, he said.

“This issue is a lot like the fight over tar sands,” Tidwell said in an interview. “It’s gone from non-existent to the biggest environmental fight in Maryland, and is on its way to being the biggest environmental fight in the Mid-Atlantic.”

Comparing Cove Point to the $5.4 billion pipeline project that’s fueled stiff environmentalist opposition shows a challenge advocates face in pushing to use gas, America’s newfound energy bounty, as a geopolitical tool. The export terminals are a “whole new category of fossil fuel trouble,” Bill McKibben, co-founder of the environmental group 350.org, said on a conference call with reporters on Tuesday.

Republican Drive

House Republicans introduced legislation to speed approval of applications for more than 20 terminals like Cove Point, in response to Russia’s actions. Russia, the second-largest global producer of natural gas after the US, twice since 2006 has cut supplies to Ukraine, a conduit for energy to Europe.

Russian President Vladimir Putin called for Russia to absorb Crimea, where voters overwhelmingly backed secession, after signing a draft treaty to take the Ukrainian peninsula. He said Russia wasn’t interested in annexing other parts of the former Soviet republic.

Dominion said a study it commissioned by ICF International found that liquefied natural gas exports would cut greenhouse gas emissions if the fuel replaces coal as a way to make electricity.

“Slowing or preventing natural gas exports from the United States is a step in exactly the wrong direction for those who are concerned about climate change,” said Pamela F. Faggert, Dominion’s chief environmental officer and vice president of corporate compliance.

Obama Letter

Chesapeake Climate Action Network, 350.org, the Sierra Club and 13 other environmental groups said Tuesday in a letter to President Barack Obama that the US should conduct a more complete environmental assessment of Cove Point than planned.

Exporting natural gas “would lock in place infrastructure and economic dynamics that will make it almost impossible for the world to avoid catastrophic climate change,” according to the letter.

Tidwell says approving terminals won’t alter the situation in Ukraine because the facilities will take years to build.

The US allows exports to nations with free trade pacts. The Energy Department conducts a more exhaustive market analysis for proposals to export to nations without those deals.

That list includes all 28 nations in the European Union. Russia provides 30 percent of Europe’s gas needs using pipelines that cross Ukraine. Export advocates said the US’s growing energy resources can reduce its allies’ reliance on Russian oil and gas.

Dow Opposition

Some businesses also oppose to the export push. Dow Chemical leads a coalition fighting overseas sales, saying exports might increase costs for an important ingredient for its products in the US.

A group of four refiners are bucking the oil industry’s campaign to remove restrictions on crude oil exports, with the US forecast set to overtake Saudi Arabia as the main producer by 2015, according to the International Energy Agency.

Monroe Energy in Trainer, Pennsylvania, PBF Energy in Parsippany, New Jersey, Alon USA Energy in Dallas and Philadelphia Energy Solutions in Philadelphia formed the Consumers and Refiners United for Domestic Energy Coalition this month to lobby against removing export restrictions on oil.

Jeffrey Peck, a Washington lobbyist for the coalition, said lifting the restrictions will raise gasoline prices for Americans and keep the US “overly dependent on imported crude oil.”

Advocates say exports won’t raise domestic costs because global markets set the price. More exports will encourage producers to keep drilling.

Lift Restrictions

Senator Rand Paul, a Kentucky Republican, said in a March 10 interview on Fox News that the US should lift oil and gas export restrictions.

“Russia has a difficult time making a profit if oil goes below $90 a barrel,” Paul said. “So, yes, part of our energy policy ought to be producing enough that Russia can’t dictate to Europe and that Europe is not beholden to Russia.”

Peck said the situation in Ukraine underscores the importance of energy security, and that the US should be protective of its own by limiting exports.

The oil and gas industry has sought to export more of the US bounty as supplies rise because hydraulic fracturing and horizontal drilling are unlocking stores previously uneconomic to procure.

Advances in drilling techniques, including hydraulic fracturing or fracking, have boosted US production of natural gas by 35% from a decade-low 18 trillion cubic feet in 2005, according to the Energy Information Administration.

Six Applications

The Energy Department has approved six applications for export projects that would process 9.07 billion cubic feet/day of liquefied natural gas. It’s weighing 24 applications for projects to handle more than 31 billion cubic feet. The US produces an average of 69 billion cubic feet/day of gas.

The rise in natural gas production has led to an increase in the use of the fuel to generate electricity. That has helped lower US greenhouse-gas emissions, because burning natural gas releases about half the carbon dioxide as coal.

Tidwell says the climate benefits are lost when emissions to transport the fuel overseas and from the energy it takes to cool the gas to a liquid are considered.

Environmental groups oppose Keystone because it would carry fuel from Alberta’s oil sands, and producing and using the Canadian crude releases more carbon than other forms of oil.

Sabine Pass

Only one export facility, Cheniere Energy's $10 billion Sabine Pass terminal in Cameron Parish, Louisiana, has the required approvals from the Energy Department and US Federal Energy Regulatory Commission. Shipments are scheduled to start in late 2015, according to the company.

Representative Cory Gardner, a Colorado Republican, introduced legislation to require the Energy Department to approve all pending gas export projects. The projects would still need to clear federal environmental and safety reviews.

Energy and Commerce Committee Chairman Fred Upton, a Michigan Republican, said in a statement that passing the bill could help “supplant” Russia’s influence on the region.

The House Energy and Commerce Committee’s energy and power subcommittee plans to hold a hearing March 25 on a Gardner’s bill.

Democratic Senator Edward Markey of Massachusetts, who opposes the push to expedite exports, introduced legislation this month requiring the Energy Department to consider several factors before approving export terminals.

The Energy Department must review proposals to ship to countries lacking a free-trade agreement with the US.

The US Federal Energy Regulatory Commission, which is responsible for weighing the safety and environmental risks associated with the export facilities, said last week that it will determine by Aug. 13 whether to approve Dominion’s plans for its Cove Point terminal.

Cove Point, about 60 miles (97 kilometers) southeast of Washington, would deliver fuel to Japan and India, according to data from Poten & Partners Inc., a New York-based ship broker.

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I worked for the Company that developed Cove Pt. It was developed to be an import facility. Remember the 70's energy crisis. We also had a gas crisis due to lack of drilling. America had no central energy policy/plan and we still don't. Everything is driven by special interest and misguided politicians, to be polite. Natural gas, in the ground ,is a finite resource. The Northeast needs gas for heat and industry processes. Please don't waste gas to make electricity. Coal and Nuclear are best for that. American industry needs plentiful, reasonably priced energy. America's energy policy needs to be planned by wise American leaders with America's interests at hand. Not by supply/ demand world market forces.

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