Feds Approve Cove Point Gas Plant

Published October 24, 2014

Feds Approve Cove Point Gas Plant

By H. Sterling Burnett

The federal government has approved the expansion and modification of the Dominion’s Cove Point natural gas liquefaction plant in Calvert County, Maryland.

Dominion, a Virginia based energy company, says it hopes to complete the project and begin exporting natural gas from the plant in 2017.

The Cove Point project is expected to cost $3.8 billion and add 75 new jobs to the 100 already at the plant. In addition to the jobs, the facility is expected to contribute $40 million dollars in annual tax revenues to Calvert County.

Environmentalists’ About-Face

Though the Federal Energy Regulatory Commission (FERC) found the plant to be in the public interest in its September 29 decision, environmental lobbyists vehemently opposed it. The main complaint they raise against the plant is that it would lead to more fracking and increased natural gas production. Of course, what environmentalists fear is just what proponents of the plant hope occurs.

Until recently, environmentalists applauded the growth in natural gas use as a transition fuel for electric power generation until renewables could become reliable and competitive. Robert Bradley, CEO and founder of the Institute for Energy Research, says environmentalists’ early support for natural gas was a ruse. “The ‘bridge fuel’ talk of environmentalists toward natural gas in the 1980s and 1990s has been replaced by the Sierra Club’s war on gas. Thus something as innocuous as LNG, particularly when it competes against coal in power generation, is under political assault,” he said.

The coal industry had predicted this strategy, Bradley notes, saying, “The coal industry, which warned the gas industry to beware of fake friends, now has company. It’s high time that all fossil fuel [producers] unite against the anti-industrial Left.”

Helping Friends Abroad

U,S, gas exports could benefit Europe and developing countries as well as the domestic economy. Europe wants U.S. natural gas to reduce its reliance on supplies from Moscow, which has used its gas supplies as a political lever to gain favorable geopolitical concessions. Developing countries could use new sources of energy to overcome the lack of reliable electric power their people live with daily.

When it becomes fully operational, Cove Point could move enough natural gas each day to meet the household needs of 860,000 homes for four days. Dominion already has buyers lined up for its production, including a Japanese gas utility, a Japanese trading company, and the U.S. unit of one of India’s largest gas distributors.

Other Plants Await Approval

Isaac Orr, a research fellow at The Heartland Institute, said, “Natural gas export facilities should be expedited. The administration did get this right one right, but even a broken clock is right twice a day. Since there are no new or unique risks from these plants, the remaining liquefaction/export facilities currently under review should get expedited approval.”

Orr noted an environmental benefit of the new export terminals. “Increased gas exports should reduce the amount of flaring going on at fracking facilities,” he said. “New markets mean natural gas currently being burned off as a waste product will become valuable as a fuel source.”

H. Sterling Burnett ([email protected]) is the managing editor of Environment & Climate News.