FEATURE-Liquefied natural gas foes go to the mat in Maryland

Sun Mar 2, 2014 10:00am EST
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By Timothy Gardner

LUSBY, Md., March 2 (Reuters) - Maps of Indian and Japanese ports paper the walls of a Dominion Resources Inc conference room in a small Maryland town, population 1,835, known more for crabbing and bird watching than global trade and the U.S. natural gas revolution.

Dominion, an American energy company long focused on U.S. markets, hopes to begin an expansion worth billions of dollars at its Cove Point complex on Chesapeake Bay later this year. As part of the plan, compressors fired by a new power plant would cool gas to -260 degrees F (-162 C) until it becomes the hot global commodity known as liquefied natural gas, or LNG.

But if environmentalists, including a group that has led the charge against TransCanada Corp's long-delayed Keystone XL oil pipeline, get their way, Dominion won't soon be shipping anything anywhere.

The Cove Point site, a little more than an hour's drive southeast of Washington, DC, boasts four large storage tanks and a pier built in the 1970s to import LNG from Algeria.

That was long before the United States rode the wave of hydraulic fracturing, or fracking, to become the world's top gas producer.

The gas boom has set off a race among U.S. companies to export LNG to China and India, which are both trying to cut their use of coal in power plants, and to Japan, which moth-balled nuclear plants following the 2011 Fukushima disaster. European economies also covet LNG.

Cove Point is among more than 20 U.S. projects that want to export LNG. Of those only one, Cheniere Energy's Sabine Pass in Louisiana, has full federal permitting.

Competition from other exporters, including Russia, Australia, Mozambique and Canada, makes it unlikely that all the proposed U.S. export projects will get off the ground, analysts say.   Continued...