Environmentalists sue FERC in bid to block Dominion’s Cove Point LNG project

LNG tanks at sunrise
Source: DollarPhotoClub

Last Thursday, after having their request for a re-hearing denied, environmental groups filed a lawsuit against the Federal Energy Regulatory Commission (FERC), challenging it’s decision to approve Dominion Energy’s Cove Point LNG export terminal. The suit was filed in the federal appeals court for the D.C. Circuit by Earthjustice, acting on behalf of the Chesapeake Climate Action Network, Patuxent Riverkeeper, and Sierra Club groups.

The controversial LNG facility, owned by Dominion Resources Inc., was approved by FERC in September after a three-year regulatory review process, and construction of the $3.8-billion project started shortly thereafter in October. The new liquefaction plant will integrate with the existing LNG import facilities at the project site and will be designed to liquefy and export 5.75 million tonnes of LNG per year. It is expected that this will extend the life of the LNG terminal by an additional 15 years, create 75 additional jobs once operational and thousands of jobs during construction.

FERC had approved the project in late September, after conducting an environmental assessment, which is less stringent than an environmental impact statement, causing environmental groups to motion for a re-hearing. Since then FERC has been re-evaluating the groups’ request, but denied their call to halt construction. FERC finally rejected the groups’ rehearing motion last week, clearing the way for Thursday’s legal challenge.

The lawsuit claims that FERC failed to consider how the project would trigger an increase in hydraulic fracturing in the Marcellus shale region, which in turn would lead to significantly higher air, water and climate pollution. The groups also claim that FERC failed to adequately consider the impact on Chesapeake Bay of an influx of foreign LNG tankers dumping dirty wastewater.

“After months of delay, we will finally get our day in court to challenge the fundamentally flawed approval of Dominion’s climate and community wrecking project,” Mike Tidwell, director of the Chesapeake Climate Action Network, said in a statement. “Time and again, FERC has shown a blatant disregard for the health and safety of people and the climate and, we believe, the law.”

However, FERC say that shale gas development in the Marcellus would continue with or without an export terminal at Cove Point and that the facility, which can receive natural gas through interconnects with three interstate natural gas pipeline systems, may not necessarily process natural gas from the Marcellus. They also believe that with the precautions prescribed there would be no risk to the safety of nearby residents and little to none environmental impact.

In a statement Diane Leopold, president of the Dominion Energy business unit, said “While we are making a substantial investment to add export capabilities, we intend to keep unchanged our commitment to being a good neighbour and responsible steward of the environment”.

Dominion have also been granted approval to export domestically produced LNG from the Cove Point terminal to countries who do not have a free trade agreement with the U.S. The approval allows up to 0.77 billion cubic feet per day (Bcf/d) to be exported over a duration of 20 years, with plans to start commercial operations in 2017.

ST Cove Point LLC, a joint venture between Sumitomo Corporation and Tokyo Gas (Japan), and GAIL (india) have both contracted for half the marketed capacity. It is expected that up to 2.3 million tonnes per year of LNG will be exported by each for the period of 20 years.

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