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Baltimore County to Ask Supreme Court to Review LNG Case

Baltimore County plans to file a petition this week with the Supreme Court challenging a federal appeals court ruling that struck down a county zoning ordinance banning the construction of the AES Sparrows Point liquefied natural gas (LNG) terminal near Baltimore, MD, a county spokeswoman said.

In late May the U.S. Court of Appeals for the Fourth Circuit in Richmond, VA, ruled that the Baltimore County zoning ordinance barring the construction of the LNG facilities in certain Chesapeake Bay coastal areas was preempted by the Natural Gas Act (NGA) (see NGI, May 26).

The appellate court reversed a June 2007 decision by the U.S. District Court for the District of Maryland that upheld Baltimore County's ordinance. The lower court said the ordinance was not preempted by the NGA and was within the delegated authority of the state of Maryland and Baltimore County under the Coastal Zone Management Act (CZMA).

In direct contrast with the lower court, the Fourth Circuit held that the zoning ordinance was not part of Maryland's federally approved Coastal Zone Management Plan (CZMP), and thus was not preempted from the NGA as an exercise of Maryland's rights under the CZMA.

The Supreme Court petition, which must be filed by Aug. 13, will be "related to the county's right to enforce its coastal management zone to prevent facilities in Chesapeake Bay critical areas," said Baltimore County spokeswoman Ellen Kobler.

In June 2007 Arlington, VA-based AES Corp. challenged the U.S. District Court's ruling, which had dealt a blow to the energy company's plans to build its Sparrows Point LNG terminal near Baltimore (see NGI, July 9, 2007). AES argued at the time that Baltimore County's zoning ordinance violated the Energy Policy Act of 2005's amendments to the NGA, which gave the Federal Energy Regulatory Commission (FERC) sole jurisdiction over the siting of onshore LNG facilities.

In January 2007 the Baltimore County Council passed the zoning ordinance barring the "establishment or expansion" of LNG facilities in all Chesapeake Bay critical areas. The county council's measure was introduced and voted on within days of AES filing its application at FERC to build the Sparrows Point LNG project on the site of a former steel mill on a peninsula that juts into Chesapeake Bay in the city of Baltimore (see NGI, Jan. 15, 2007).

Maryland's Critical Areas Commission, which oversees development in the state's coastal areas, approved the county's zoning ordinance. The commission said its action was needed to formally incorporate the new law into the county's coastal plan (see NGI, June 18, 2007).

The Sparrows Point project, which was been the target of intense opposition by state and federal politicians, would have about 1.5 Bcf/d of regasification capacity with a potential for expansion to 2.25 Bcf/d. Regasified LNG would be delivered to regional markets via Mid-Atlantic Express, an 87-mile, 30-inch diameter pipeline that would extend from the terminal to connections with interstate pipelines at Eagle, PA. The pipeline also would include connections with local distribution company Baltimore Gas & Electric.

The project, including three LNG storage tanks, would be located on 80 acres within the existing Sparrows Point Industrial Complex in Baltimore County. The site was previously owned by Bethlehem Steel and housed a steel manufacturing and shipbuilding facility.

In April FERC issued a favorable draft environmental impact statement on the terminal project (see NGI, April 28). AES is now awaiting a final environmental impact statement, to be followed by a certificate ruling.

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