Williams’ proposal to reactivate the mothballed Cove Pointliquefied natural gas (LNG) terminal and associated facilities inCalvert County, MD, is coming under fire from all quarters -potential distribution customers and the state.

Baltimore Gas and Electric (BG&E), for one, said end-usecustomers and distributors would face a series of safety andoperational risks if FERC were to immediately authorize there-opening of the terminal facilities because Cove Point plans toput revaporized LNG that’s not diluted with domestic gas directlyinto the interstate pipeline system.

The utility urged the Commission to defer consideration ofWilliams’ proposal until the Gas Technology Institute (GTI)completes its current research into the short- and long-termeffects of the use of imported LNG in customers’ gas appliances.BG&E warns that appliances “may emit potentially lethal flamesas a result of the poor aeration of revaporized LNG.”

The Cove Point application “can be evaluated more thoroughly inthe context of this exhaustive industry-wide analysis,” BG&Etold FERC [CP01-76]. In the meantime, it “need not lie dormant,”the utility said. Technical conferences and/or hearings should beheld to consider the “significant safety, operational and economicissues confronting the natural gas-consuming public in the UnitedStates by the influx of revaporized LNG” from foreign countries.

Last month, Washington Gas Light also asked the Commission to holda hearing to assure potential customers of Cove Point that the typeand character of the LNG to be imported at the facility, if re-opened,will fall within the standard parameters of traditional transmissionquality gas [See Daily GPI, Feb. 14,2001].

“…[T]his is not BG&E’s first experience with the operationof the now-mothballed offshore LNG terminalling facilities at CovePoint, and such experience indicates that many precautions must betaken before reactivation can be found to be required by the publicconvenience and necessity.” In a 1980 opinion, the Commissionordered then-owner of the Cove Point facilities, Columbia, toreimburse BG&E millions of dollars for the installation offacilities needed to accommodate the receipt of commingled LNG anddomestic gas supplies.

But the current Cove Point proposal envisions putting undiluted,revaporized LNG directly into BG&E’s system, according to theutility. “The characteristics of revaporized LNG, even whencommingled with domestic supplies, required millions of dollars ofequipment conversions before BG&E could safely take receipt ofsuch volumes. In its undiluted form, the ramifications are suchthat the unconventional LNG fuel may be unacceptable with anyequipment modifications, or at least any equipment modificationsthat would still render the project economically sound.”

BG&E recalled that it had “many years of lead-time” toaddress the safety and operational concerns before Cove Point wentinto operation in 1978. But the time frame proposed by Williams forthe re-start of the facilities – by April 1, 2002 — does notallow for such analysis this time around, it told the Commission.

It also raised concerns about the “character and composition” ofthe LNG that would be supplied to Cove Point. While Cove Point gotmost of its LNG from Algeria in the 1980s, BG&E noted that thistime supplies would come from a number of foreign sources. “Thereare simply too many unknown and unquantifiable variables forBG&E and the Commission to even begin to know the preciseextent and natural of the precautions that would have to be madebefore Cove Point would be able to safely and reliably embark onits proposal project.”

Given Williams’ failure to address health, environmental andsafety issues, the Maryland Energy Administration and the MarylandDepartment of Natural Resources said they had “no choice but toprotest the proposed approval date and construction time schedule”of the project, while they conduct a review of the “potentialimpacts” and benefits of the reactivation and expansion of the CovePoint facilities. However, they said they would not take a positionon the merits of the application at this time.

When the Commission authorized construction of the Cove Pointfacility in 1972, the agencies noted Calvert County, MD, waspredominantly rural and sparsely populated, and thus the projectdidn’t require a major review. But since then, it has become asignificant tourist attraction, boating center, and severalresidential developments have been sited near the Cove Pointfacility, they said.

“However, to date, there has been no comprehensive state reviewof the project nor does the application address in any detailthe…significant issues of public concern,” the Maryland agenciessaid. Specifically, they noted Williams’ proposal fails to addressthe impact on tanker traffic in the Chesapeake Bay.

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