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Interior Asks FERC to Withhold Approval of Sparrows Point Project

The Interior Department has called on FERC to withhold approval of the controversial AES Sparrows Point liquefied natural gas (LNG) import terminal proposed near Baltimore and associated Mid-Atlantic Express pipeline until issues involving endangered and threatened species have been resolved.

"The U.S. Fish and Wildlife Service [FWS], a bureau of the department, has determined that there are unanswered questions related to federally listed endangered and threatened species that may be affected by this project...Until these matters are resolved and [the] Endangered Species Action Section 7 consultation between the [FWS] and the Commission is concluded, we recommend that the Commission withhold certification for the project," Willie Taylor, director of Interior's Office of Environmental Policy and Compliance, wrote last Tuesday.

The Federal Energy Regulatory Commission (FERC) issued a final environmental impact statement (FEIS) in early December, finding that "if the project is constructed and operated in accordance with AES' and Mid-Atlantic Express' proposed mitigation measures, our recommended mitigation measures and route variations presented in...this final EIS, and the Coast Guard's safety and security measures, construction and operation of the proposed facilities and the related LNG marine traffic would have mostly limited adverse environmental impact."

The FEIS, however, said the proposed pipeline facilities and/or terminal could have an "adverse impact" on residential areas; property values; camps, parks and trails; and the bog turtle and Indiana bat, as well as on recreational waterfowl hunting practices near the Sparrows Point LNG terminal (see NGI, Dec. 8, 2008). The FEIS is the last step before receiving a project certificate at FERC.

The controversial LNG project has been the target of considerable fighting in and outside of the courts, with the case going as far as the U.S. Supreme Court. In October the high court let stand a federal appeals court ruling that struck down a Baltimore County, MD, zoning ordinance banning construction of the Sparrows Point LNG terminal (see NGI, Oct. 13, 2008).

The state of Maryland last June suffered another major blow to its efforts to block the LNG project -- this time outside the court system. The Department of Commerce at the time overrode Maryland's objection to the proposed Sparrows Point LNG terminal and pipeline east of the Port of Baltimore (see NGI, June 30, 2008).

Based on information submitted during the appeal, Commerce determined that the national interest served by the Baltimore facility outweighed its limited adverse coastal effects. The proposed project would help meet regional energy demand by providing enough natural gas to heat approximately 3.5 million homes per day or to generate electricity for 7.5 million homes per day, and the impact of dredging to fish and aquatic vegetation would not be significant, the department said.

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 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.

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