BALTIMORE – The delicate balancing act between the prospect of cutting energy costs on the one hand and preserving the environment and public safety on the other is playing out on the rusting industrial shoreline of Sparrows Point in Eastern Baltimore County.
International energy giant AES Corp. is proposing a $400 facility to import and process liquefied natural gas, along with a $250 million pipeline to send the gas to southern Pennsylvania. The Arlington, Va., based company says the project could reduce the Mid-Atlantic region’s gas costs by 15 to 30 percent. AES says its project offers a host of benefits to the once thriving industrial area around Dundalk, including more than 500 union construction jobs and more than $5 million per year in state and local tax revenue.
But the proposal has triggered fierce local opposition, prompting the General Assembly to establish a task force to investigate fears that the development will cause environmental ruin and be a safety hazard.
“People are concerned,” said Sharon Beazley, coordinator of the LNG Opposition Team leading the fight against the proposal and co-chair of the task force. “Our entire issue is based on the health, safety and quality of life of our people and the Chesapeake Bay.”
Opposition to the project among environmentalists is not unanimous, however. The Chesapeake Bay Foundation is withholding a judgment on the project.
“We don’t support or oppose it right now,” said Beth Lefebvre, a spokeswoman for the foundation. “There are some legitimate questions but potential impacts still remain unknown at this time.”
The task force, comprising a mix of government and private sector experts and apprehensive residents, held its first meeting in Baltimore on Tuesday. It must submit a report of its findings and recommendations to the General Assembly no later than Dec. 31.
AES at the end of the year plans to apply for a certificate from the Federal Energy Regulatory Commission, which is expected to decide on the project’s fate by the middle of next year. The terminal, though still being designed, could be in operation by late 2010, according to AES. If approved, it would be the second LNG terminal on the Chesapeake Bay, joining the Cove Point facility in Calvert County operated by Dominion Resources, Inc. of Richmond.
Opponents have a powerful ally in Gov. Robert L. Ehrlich, who announced last week he would not extend a dredging permit on the site. Ehrlich has joined state and local politicians from Baltimore and Baltimore County in opposing the project this election year.
Opponents fear that the plant may lead to further Chesapeake Bay contamination, fires, terrorist attacks and restriction to waterways long used by local residents for recreation and livelihood.
The closest population center – the historic, predominantly black community of Turners Station – is about 1.3 miles from the proposed site, according to AES. The surrounding Dundalk and Edgemere area is home to more than 60,000 people.
Ships from overseas carrying liquefied natural gas – cooled to 260 degrees below zero so that it can be easily and safely transported – would dock at Sparrows Point and transfer LNG to an onsite terminal. The LNG would be regasified and either used in the Baltimore region or pumped northward via the pipeline.
As U.S. natural gas usage increasingly outpaces domestic production, AES bills its proposal as an environmentally-friendly way to blunt soaring energy prices. Millions of Americans use natural gas each day for heating and cooking.
Prices in the Mid-Atlantic region are high in part because natural gas often must be piped to the region from places as distant as Canada and the Gulf Coast, AES says. The company contends that bringing foreign shipments to the Eastern seaboard is an efficient way to circumvent expensive piping costs.
But the LNG Opposition Team says importing natural gas is bad policy because it will increase U.S. dependence on foreign energy.
Although natural gas is non-toxic and cleaner than many other energy sources, LNG-facility opponents say its shipment up the Chesapeake Bay and close to civilian areas is unacceptable.
AES says that the 1.3 mile distance from the terminal to the nearest population site is enough to ensure the community’s safety. They also note that three LNG storage tanks in Baltimore, which have been in existence since the 1970s, stand within a mile of parts of Baltimore’s Inner Harbor, much of the city’s business community, M&T Bank Stadium and Camden Yards.
Of paramount concern to Dundalk residents is dredging of the bay floor off Dundalk which would be needed for the project to be built. They say Sparrows Point, once home to a gigantic steel mill and shipyard, has an abundance of toxins that would be released into the bay, precipitating environmental catastrophe.
Ehrlich last week directed the Maryland Department of Transportation to not extend a dredging permit to Barletta Willis LLC, which currently maintains a ship repair yard at the Sparrows Point site. It had been expected that Barletta Willis would lease its permit to AES so that dredging could begin.
Ehrlich spokesman Henry Fawell described the decision as “a big step towards preventing a liquefied natural gas facility from being put on line.” But Zack Germroth, AES’s spokesman for the project, said the governor’s decision is irrelevant because the company needs a separate dredging permit tailored to the needs of its own project.