FERC approves Cove Point – first U.S. east coast LNG terminal

Liquefied natural gas tanker LNG
Source: DollarPhotoClub

The controversial LNG facility in Cove Point, Maryland, was approved on Monday by the Federal Energy Regulatory Commission (FERC) despite protests from environmentalist groups.

The project, owned by Dominion Resources Inc., is the fourth LNG export terminal to receive approval from federal regulators in the U.S. and the first such project on the east coast, closest to the prolific Marcellus Shale formation.

“This approval is fantastic and long overdue news for our region’s economy as well as our nation’s competitiveness and energy security,” said David Spigelmyer, president of the Marcellus Shale Coalition. “Thanks to safe shale development, America’s energy outlook has dramatically shifted from scarcity and weakness to abundance and strength.”

The decision allowing the development to proceed has angered environmentalist groups who believe that the Environmental Assessment carried out by FERC, allowing the construction of the $3.8-billion facility, was flawed and call for a more exhaustive Environmental Impact Statement.

The opponents of the Cove Point development are concerned that the facility will incentivise environmental damage from fracking across the mid-Atlantic region and would likely contribute more to global warming over the next two decades than if Asian countries burned their own coal.

“FERC’s decision to approve Cove Point is the result of a biased review process rigged in favour of approving gas industry projects no matter how great the environmental and safety concerns,” said Mike Tidwell, director of the Chesapeake Climate Action Network.

“FERC refused to even require an environmental impact statement for this $3.8 billion facility right on the Bay. We intend to challenge this ruling all the way to court if necessary. For the safety of Marylanders and for people across our region facing new fracking wells and pipelines, we will continue to fight this project until it is stopped.”

The trend towards exporting LNG is the result of an increased production of natural gas from shale formations. The abundance of shale gas has pushed the gas prices down boosting, among others, the U.S. petrochemical industry. Many are concerned that LNG exports will push the gas prices up hitting domestic manufacturing.

Speaking to the Tribune Live, Kent Moors, executive chair of the World Affairs Council of Pittsburgh’s global energy symposium, said that exporting LNG will not affect domestic gas prices because there’s enough gas to meet demand here and abroad.

Not everybody is convinced, though. “At the end of the day, these producers will chase the highest price,” said John Quigley, a consultant dealing with shale energy issues and former secretary of Pennsylvania’s Department of Conservation and Natural Resources. “That’s what they’re going to go after. That’s why, ultimately, we’re going to get some level of domestic price impacts on manufacturing.”

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