In a highly unusual, if not unprecedented, move, FERC announced Friday that it will reconsider its decision to allow Williams to reactivate and expand its Cove Point liquefied natural gas (LNG) terminal plant in Maryland, even before rehearing petitions are due at the Commission.

The FERC order came just days after Maryland Sen. Barbara A. Mikulski denounced the agency’s post-Sept. 11 approval of the planned re-opening and expansion of the LNG import facility in Lusby, MD, because, she said, it would permit “flammable” LNG to be imported to a site within four miles of a nuclear plant in the state.

From the Senate floor last Wednesday, she said she was “deeply alarmed” the Commission would permit LNG to “come up the Chesapeake Bay and dock three-and-a-half miles down from the nuclear plant” at Calvert Cliffs, MD. This is a “nightmare scenario,” the Democratic lawmaker said.

Mikulski demanded that FERC Chairman Pat Wood review the agency’s permitting process and its Cove Point ruling in the “interest of national security and national safety.” In a letter to Wood last week, she asked, “What were you thinking when you granted preliminary approval to re-open the natural gas unloading plant at Cove Point, MD? I cannot believe you would give this approval on the one-month anniversary of the terrorists attacks on America while President Bush was announcing the our country was at war!”

In a swift response Friday, the Commission said it “has determined on its own motion that it is in the public interest to reconsider our Oct. 12 decision and to take further evidence with respect to national security implications associated with the order.” The order was issued four days before rehearing petitions on the Cove Point decision are due.

FERC directed “all parties and interested local, state and federal agencies that are not parties to the proceeding, but that share jurisdiction or regulatory responsibilities over security matters that may be implicated by the Commission’s actions…, to file comments on any issues or concerns they may have relating to the effect that reactivation of Cove Point’s LNG facilities may have on national security interests.” Comments, which will be treated as privileged documents, are due at the agency by Nov. 15.

The Commission staff also will conduct a technical conference on Nov. 16 to give “interested parties” and “indicated agencies” an opportunity to discuss national security implications of the Cove Point project. The conference will be closed to the public, given the “nature of the national security issues to be explored,” the order said [CP01-76].

At issue is a FERC order giving Williams the green light to re-start the Cove Point plant’s LNG import services by April 1, 2002, and to begin construction of a fifth LNG storage tank to boost capacity to 7.8 Bcf. The 850,000-barrel tank has an in-service date of Sept. 1, 2003. The $103 million project will make Cove Point one of the top LNG import terminals in the nation.

Mikulski said she plans to bring the matter to the attention of Homeland Security Director Tom Ridge and Robert Mueller, director of the Federal Bureau of Investigation, as well.

In addition, “I am turning to [the] U.S. Coast Guard…to ensure that the Coast Guard rigorously reviews the Cove Point proposal,” the Nuclear Regulatory Commission to examine the “potential threat to the safety of Calvert Cliffs by this proposed re-opening,” and to Maryland Gov. Parris Glendening.

“You can be sure that I will follow up with all these officials. I am very serious about the threat of terrorism…I want to make sure that LNG shipments into Cove Point and other American terminals are thoroughly considered as a national security issue, not just an energy issue,” Mikulski said.

“…We do need more natural gas in our country. We need to look at energy policy,” the senator conceded, but she said it shouldn’t be at the risk of further exposure to terrorists. “One of the main sources [for LNG] is Algeria. Algeria is on every terrorist watch list.” Yet FERC has given the go-ahead for Algerian tankers to “just come up and park in Maryland next to a nuclear power plant.”

Mikulski’s concerns come on the heels of the controversy surrounding LNG shipments through Boston Harbor in the wake of the Sept. 11 terrorist attacks. The Coast Guard there closed the harbor to LNG tanker shipments in late September, pending the development of additional security procedures to address local concerns, and re-opened it last month. But despite the stepped-up security measures, the city of Boston and neighboring communities continue to worry about the post-attack dangers of LNG being transported so close to heavily populated areas (See NGI, Nov. 5).

In addition, U.S. Rep. Edward Markey (D-MA) has pointed to the security vulnerabilities of Distrigas of Massachusetts LLC’s terminal facility in Everett, MA, which receives the LNG shipments that pass through Boston Harbor. He has called on the Department of Transportation and Ridge to augment the efforts of the local fire and police departments to protect the site.

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