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Citing Report, MD Lawmakers Ask FERC to Nix Sparrows Point Project

Citing an unfavorable waterway suitability report released by the U.S. Coast Guard last week, five Maryland congressional lawmakers have asked FERC to reject AES Corp.'s application to build the Sparrows Point liquefied natural gas (LNG) terminal in Baltimore County, MD.

"I have always opposed a new LNG facility in Sparrows Point, but [with the Coast Guard report] there is even more evidence that a new site is unsafe and unwise," said Sen Barbara Mikulski (D-MD), a leading opponent of the project. "The Coast Guard has confirmed what I have been saying for more than a year -- AES is not prepared, and our state and local law enforcement are too stretched and strained to fill the gap."

Other Maryland congressional lawmakers joining Mikulski in a letter to FERC Chairman Joseph Kelliher were Sen. Benjamin L. Cardin, and Reps. Elijah. Cummings, C.A. "Dutch" Ruppersberger and John Sarbanes.

The Coast Guard last week concluded that Chesapeake Bay is not suitable for navigation by LNG tankers, but it added that it could be made so for the type of traffic associated with the proposed Sparrows Point LNG terminal. Requirements would include armed tanker escorts. During transit or at anchor "an armed, multi-vessel escort will be required to enforce the federal safety/security zones around any loaded LNG vessel navigating within specified areas of the Chesapeake Bay," the Coast Guard said (see Daily GPI, Feb. 29).

The water suitability report has been submitted to the Federal Energy Regulatory Commission, which will weigh it when deciding whether or not to approve the Sparrows Point LNG project.

"This is the second time that AES has submitted a waterway suitability assessment, and the second time the Coast Guard has deemed the assessment unsatisfactory," said Cummings, chairman of the House Subcommittee on Coast Guard and Maritime Transportation. "It is alarmingly clear that Sparrows Point is not an ideal location for an LNG terminal, and it is critical that FERC act accordingly by rejecting the application."

In their letter, the Maryland lawmakers further noted that Richard Hoffman of FERC's Office of Energy Projects told the House subcommittee last April that he believed any proposed facility receiving an unfavorable waterway suitability report would not go forward.

The Sparrows Point project, if constructed, 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 the Mid-Atlantic Express pipeline, an 87-mile, 30-inch diameter pipeline that would extend from the terminal to connections with interstate pipelines at Eagle, PA.

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.

Chesapeake Bay could be made suitable for LNG traffic to and from Sparrows Point provided measures necessary to responsibly manage maritime safety and security risks are in place, the Coast Guard said. The waterway suitability report and other information is available from the Coast Guard website at www.coastguardwsr.com.

Sparrows Point Project Manager Kent Morton last week said the company believes it could meet the Coast Guard requirements.

FERC earlier in February said it could act on the application for the controversial LNG terminal project by the end of the year (see Daily GPI, Feb. 8). According to the agency's notice of schedule, the Commission plans to issue a draft environmental impact statement by April 11, a final environmental impact statement by Aug. 15, and a final decision on the company's application by Nov. 20. The AES application has been pending at the Commission since January 2007.

Commerce Secretary Carlos Gutierrez recently decided that he needs more information to decide AES Sparrows Point's consistency appeal under the Coastal Zone Management Act, and consequently has stayed the closure of the decision record until April 14. AES in September 2007 appealed to the secretary to override Maryland's objection to the federal consistency certification for the terminal. The Maryland Department of the Environment last July denied the developer's request for a finding that the project is consistent with the state's coastal management program (see Daily GPI, July 18, 2007).

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