Conceding that its decision was not a “popular” one, FERC Thursday approved, subject to 169 conditions, the controversial AES Sparrows Point liquefied natural gas (LNG) terminal project near Baltimore and associated Mid-Atlantic Express pipeline, which would bring 1.5 Bcf/d of natural gas to growing markets in the Northeast.

“Our primary concern is assuring public safety. We have done so in this order by attaching 169 conditions that will protect public safety and mitigate any adverse environmental impact,” said FERC Chairman Joseph Kelliher. “I realize this is not a popular decision, but it is the correct decision, rooted in voluminous record and based on sound science.”

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 88-mile, 30-inch diameter pipeline that would extend from the terminal to connections with interstate pipelines at Eagle, PA.

The project, including three LNG tanks to store up to 480,000 cubic meters of LNG, would be located on 80 acres within the existing Sparrows Point Industrial Complex southeast of Baltimore in Baltimore County. The site was previously owned by Bethlehem Steel and housed a steel manufacturing and shipbuilding facility.

The decision by the Federal Energy Regulatory Commission comes two days after the state of Maryland, in a last-ditch effort, urged FERC to withhold approval of the terminal and pipeline project until the concerns of state and local governments are fully addressed (see Daily GPI, Jan. 15). Maryland’s concerns about the LNG terminal proposed near Baltimore are “substantial and numerous,” wrote Bruce Michael of the Maryland Department of Natural Resources in a letter to the Commission.

Even with FERC’s approval of the terminal and pipeline project, Maryland could delay the construction of the facilities indefinitely by refusing to issue water permits — as some states have done with contentious gas projects within their boundaries.

The Interior Department’s Fish and Wildlife Service last week also called on the Commission to withhold a certificate decision on the Sparrows Point terminal and pipeline facilities until issues involving endangered and threatened species have been resolved (see Daily GPI, Jan. 8).

Responding to the concerns of Interior and others, the FERC order clarifies that construction of the Sparrows Point LNG project cannot begin until the sponsors comply with the environmental conditions specified in the order. But the Commission denied pleas for additional time to submit comments on the final environmental impact statement.

Baltimore County, in its attempt to block the LNG terminal, took its case all the way to the U.S. Supreme Court last year, but it lost (see Daily GPI, Oct. 8, 2008). The state of Maryland also suffered a blow last June when the Department of Commerce overrode the state’s objection to the LNG facility (see Daily GPI, June 27, 2008).

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.