The co-sponsor of a proposal that sought to give states veto power over the siting of liquefied natural gas (LNG) terminal projects withdrew the measure at the last moment Tuesday, expressing concern that the controversial amendment could jeopardize passage of the broader bill. But he vowed to bring up the issue in the Senate later.

Democratic Sens. Ben Cardin and Barbara Mikulski of Maryland offered the amendment as part of a $13 billion authorization bill for the Army Corps of Engineers (HR 1495). The bill already has been passed by the House, and now is before the Senate.

Cardin, who withdrew the amendment, said he would seek another legislative vehicle for the measure. Specifically, the amendment would bar the federal government from approving or rejecting an application for the siting and construction of an LNG terminal project "without the express concurrence of each state affected by the application."

From the Senate floor, Cardin objected to the Federal Energy Regulatory Commission's sole authority over the siting of LNG projects. "It's totally up to FERC to make that decision, and that is wrong."

Mikulski and Cardin last month introduced stand-alone legislation that would give state and local governments the right to veto the location of LNG terminal projects (see Daily GPI, April 26). This measure was prompted in large part by the state's opposition to AES Corp.'s Sparrows Point LNG terminal proposed for Baltimore County, MD.

The measure (S. 1174) would strike a provision in the Energy Policy Act of 2005 that gave FERC the power to preempt state and local concerns about location, construction and operation of LNG facilities. The bill would provide states with the same veto powers for onshore LNG terminals that they currently have for offshore terminal projects under the Deepwater Port Act.

Under current law, FERC has exclusive authority to approve onshore LNG terminal location applications. While the law requires FERC to consult with state and local governments about safety concerns, they have no role in the final decision, Mikulski said. Moreover, while the law permits states to conduct safety inspections of LNG terminals, she noted they do not have the authority to require any safety precautions or to take enforcement actions if they discover problems at a facility during a safety inspection.

Mikulski has been an outspoken critic of the proposed 1.5 Bcf/d Sparrows Point LNG project, which would be built at the site of a former steel mill on a Baltimore peninsula that juts out into the Chesapeake Bay. Sparrows Point would be less than two miles from the nearest residential housing. She also unsuccessfully tried to block the reopening of the Dominion Cove Point LNG terminal in Calvert County, MD, following the terrorist attacks in 2001.

The AES Sparrows Point project, which is pending at FERC, 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 pipeline also would include connections with local distribution company Baltimore Gas & Electric (see Daily GPI, Jan. 9).

The project, including three LNG storage tanks, would be located on 80 acres within the existing Sparrows Point Industrial Complex in Baltimore County.

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