Liquified Natural Gas (LNG) Terminal at Cove Point on Chesapeake Bay

From tiny Cove Point on the Chesapeake, tankers take natural gas around the world. At what cost?

Extracted from an Extensive Article by Kevin Rector, Baltimore Sun, March 20, 2019

In a quiet pocket of Southern Maryland where beach bungalows line dirt roads to the Chesapeake Bay, the nation’s booming natural gas industry has established an unlikely multibillion-dollar foothold.

For a year now, natural gas pulled from ancient shale formations deep below the surface of Pennsylvania and other states has been piped across Maryland to a new $4.4 billion gas export terminal in the woods beyond Cove Point Beach in Calvert County.

From there, the gas is cooled through a complex industrial process to minus 260 degrees Fahrenheit, which liquefies it and makes it easier to transport. It is then piped through a tunnel to a platform a mile offshore and loaded onto massive tankers for shipment overseas — to Japan and India, the Middle East and Europe, and countries across Central and South America.

Lea Callahan says the increase in tanker ships in the waters beyond her beachfront home, about 65 miles south of Baltimore, has been shocking. “All of a sudden, it was like boom,” she said. “They come in at all hours, so you wake up in the morning and you see another ship.”

The new activity makes Maryland a global gateway for natural gas extracted from the ground through hydraulic fracturing, or fracking, even though the state has banned the controversial process within its own borders. It also puts Maryland at the vanguard of a growing global trade in liquefied natural gas, or LNG, that U.S. government leaders and energy executives are feverishly working to support by building similar facilities across the country.

Global demand for natural gas is on the rise, particularly in China and other growing Asian markets. The United States is expected to account for 40 percent of the new production needed to meet that demand through 2025, according to the International Energy Agency.

The Cove Point terminal began operations in early 2018 as just the second large LNG export facility in the continental U.S.; Cheniere Energy’s Sabine Pass terminal in Louisiana began exporting in 2016. But more than a dozen others are in the works — each of them eager to replicate Cove Point’s success.

“This is the golden age of gas,” said Nobuo Tanaka, former executive director of the International Energy Agency. He lives and works in Tokyo, where much of the Cove Point gas is heading.

The Maryland terminal, owned by the Virginia-based utility Dominion Energy, used to import gas — from countries like Norway and Trinidad and Tobago. But that business largely dried up with the rise of fracking and other drilling techniques in the United States, and the resulting surge in domestic shale gas production.

In response, Dominion decided to convert the Cove Point facility to exports, initiating what officials called the most expensive private sector project in state history. Construction to convert the terminal, completed last year, employed 4,500 people at its peak and used 800 miles of wire and fiber, 80 miles of piping and 20,000 tons of steel.

The result has been a boon to business and to county coffers. The revamped facility now handles about 770 million cubic feet of natural gas per day, enough to power millions of overseas homes. That business generated more than $500 million in export revenue for Dominion last year. And Calvert County will get more than $50 million in taxes and other payments from the company this year — a massive influx for a jurisdiction with a general fund of less than $300 million.

“Frankly, I think we are the envy of many counties who would like to have such an economic driver,” said Evan Slaughenhoupt Jr., former president of the Calvert County Board of Commissioners.

But environmental activists and some local residents say the terminal is a giant, glaring contradiction — making Maryland the only state in the country that has both a ban on fracking and an export terminal for sending fracked gas to international markets.

Natural gas is used in cooking, heating and electricity production. It also is used in industrial production of plastics and other chemical products. It generally burns cleaner than coal and other fossil fuels, but critics say the industry that produces it is far from environmentally friendly.

Kim Grosso displays a jar of water from her farm’s well in Dimock, Pa. Grosso says the well was contaminated by Cabot Oil and Gas, which was fracking for natural gas beneath her property.

In particular, environmental advocates say fracking — which blasts water, sand and chemicals into rock formations to release trapped gas — is associated with groundwater contamination, increased risk of earthquakes and emissions of potent greenhouse gases.

And they say the Cove Point terminal provides incentive for fracking in states like Pennsylvania, Ohio and West Virginia, undermining and reducing the impact of the Maryland ban that Gov. Larry Hogan signed into law in 2017.

They and some local residents also believe the facility represents a more immediate threat to the communities around it, though Dominion and federal regulators say it is safe.

Callahan, 62, who inherited her Cove Point home from her mother, said she fears an industrial accident could spew out fire, chemicals or toxic pollutants. And she complains the changeover of the terminal to exports has turned her quiet waterfront enclave into a heavily patrolled security zone, where sheriff’s deputies paid by Dominion harass residents as they go about their daily lives.

“It used to be so nice. All of us used to walk over there with our dogs. … I’d bring the kayak right up, look at the marsh, look for blue herons and all that stuff,” Callahan said.

“I wanted to retire down here. And now I’m not doing it. I refuse to live near a potential bomb.”

She and other homeowners have joined environmentalists to protest the facility, both in Cove Point and in Annapolis, accusing state and federal regulators of conducting inadequate threat assessments. But they say their efforts have been ignored by both sides of the political aisle.

The new export terminal was pushed through regulatory and permitting processes during the administrations of President Barack Obama and Gov. Martin O’Malley, both Democrats, and has continued to enjoy support under their Republican successors.

Hogan said it “is delivering economic benefits to Maryland and the nation, and creating jobs right here in our state.” U.S. Energy Secretary Rick Perry, appointed by President Donald Trump, called Cove Point’s expansion into exporting “an exciting and remarkable new chapter in America’s history.”

Maryland officials agree with federal regulators that the facility is safe, and say it is in line with both the Trump administration’s goal of reducing trade deficits and the state’s goal of improving the environment. They contend natural gas is an important bridge fuel between dirtier coal and cleaner renewable energy sources like wind and solar.

“One of the few things that President Obama and President Trump have agreed on is the benefit to the country of exporting clean energy — natural gas — to other parts of the world,” said Benjamin Wu, Hogan’s deputy commerce secretary. “It’s a trade priority for us.”

Others argue the economic benefits to the state and county, dwarfed by Dominion’s own windfall, do not justify the threats the project poses to the public and the environment. In Pennsylvania and elsewhere, they say, other small towns are being overrun by the industry as it churns out gas for distant mega-cities like Tokyo.

These critics see only downsides — and danger.

‘It has a lovely marsh’!!! At least since the 1930s, Cove Point Beach had been an escape.

Far from the bustle of Baltimore and Washington but near enough for weekend getaways, the spit of beach drew residents from both cities. They built bungalows as vacation homes through the 1960s, and many eventually moved in for good, creating a community mixed with year-round and seasonal residents.

By the early 1970s, Cove Point was prized as one of the Chesapeake Bay’s few beaches. So when the park plans were scrapped in favor of building the import terminal, the decision caused a dust up echoed today. Many residents and environmental groups were furious.

“The bay at that point [is] relatively pristine. It is a beautiful site. It has one of the last remaining beaches on the bay. It has a lovely marsh,” said Ronald J. Wilson, then an attorney for the environmental groups.

But faced with a lengthy and unpredictable legal battle, opponents in 1972 agreed to a deal that allowed Columbia to build the terminal. The company made concessions.

It agreed to build a tunnel out to its loading platform rather than a pier. It put a majority of the 1,100-acre property not used for the termina.

Josh Tulkin, Maryland director for the Sierra Club, said the group was concerned that construction of the export terminal would be harmful to the surrounding environment. But it also argued the operations would contribute to global warming by supporting the fracking industry.

“There is no climate model that suggests we can be burning gas, to the extent that this facility requires, 30 years from now — or this planet is baked,” Tulkin said.

The Sierra Club made similar arguments in an unsuccessful legal effort to block the Cheniere facility in Louisiana. In Maryland, the Sierra Club took Dominion to court, and again lost. But about 800 acres of the property still had to remain wooded under the original easement.

The trees are part of why the nearby town of Lusby retains a rural feel, and why Cove Point Beach remains quaint. They also help to obscure 130 acres of dense industrial activity — activity some residents say has led to disturbing changes in their community, and to the bay it sits on.

Living with a refinery!!! What’s behind the trees and a 60-foot sound wall is a high-tech refinery — a maze of piping and metal and massive white storage tanks, where raw gas is purified and cooled into a liquid. That is critical, because the liquid occupies just 1/600th of the space raw gas would take up, making LNG much easier to transport.

There are combustion turbines and gas compressors. The cooling and refrigeration process relies on something called a cryogenic heat exchanger, and on a mixture of chemicals that are stored on site. The process is not easy, and not exactly clean. But the facility is designed to capture as much emissions as possible.

All told, the operation was responsible for more than 1 million metric tons of greenhouse gas emissions in 2018 — three times more than before exports began, according to Maryland Department of the Environment preliminary data.

That makes the facility one of the largest stationary sources of such emissions in the state. But the output fell well within the 2 million metric tons it is permitted to release into the atmosphere each year, state officials say.

Mike Frederick, Dominion’s vice president of LNG operations during the project’s construction, said the company regularly monitors some 270,000 different valves, pipes and other industrial components at any given time, especially for any leaks of greenhouse gases like methane.

For all that, some residents say they pay little mind to the facility. The construction that converted it for exports was annoying, and caused traffic, but that’s over now. It also provided some 10,000 people with temporary work, about 30 percent of whom were from Calvert and nearby Charles and St. Mary’s counties.

And it doubled the permanent jobs on site to nearly 200. Besides jobs, the company provides funding for a local park and local charities. Plenty of people see Dominion as a good neighbor — something Frederick says the company works hard at and prides itself on.

Others, however, believe Dominion’s good deeds are simply its way of buying goodwill not otherwise earned. Rather than being a good neighbor, they say Dominion looms over the community like an illegitimate landlord.

Linda Morin lived about a mile from the terminal for nearly 30 years, but moved 20 minutes north to Prince Frederick last year because of the shift to exports. Morin said she fears the terminal’s expansion made it more dangerous. She and others worry that its densely spaced chemical and gas storage tanks might explode in a chain reaction.

The Federal Energy Regulatory Commission, which gave its approval to the project in 2014, says the plant is safe and the residents’ concerns are unfounded.

Residents have other concerns, too — from the tides of the bay to the men who patrol its shore. Some complain about an arrangement through which the Calvert County sheriff’s office patrols the area on behalf of Dominion — which pays the salaries, benefits, pension contributions and other costs for nearly a dozen deputies. It also buys equipment, including boats, for their use.

Some residents say they have been harassed by the officers, who carry Dominion identification along with their deputy badges. They flash whichever one suits their need as they confront people strolling on the beach and walking their dogs, critics say.

“It just feels really ugly and creepy,” said Leslie Garcia, who has been part of the Cove Point Beach community for four decades. “This is all collusion. Government and corporate collusion.”

Calvert County Sheriff Mike Evans dismissed that notion. He said the county has had agreements with Dominion and the U.S. Coast Guard to provide security around the terminal for more than a decade, with the goal of serving and protecting the citizens, not Dominion. “There is no collusion,” Evans said. “We are good partners in this agreement.”

“Our daily orders come from the sheriff,” said Capt. Steve Jones, who leads the team of deputies detailed to the terminal. “Dominion does not give us marching orders.”

Some residents also believe Dominion caused the tides to change around Cove Point beach — resulting in a deadly undertow — by dredging out the shipping channel to its offshore platform in 2010.

Dominion referred questions about such claims to the government. State and federal agencies told The Sun they do not have the data to confirm or deny a change in the tides or the creation of a heavier undertow.

Garcia and others said they are convinced, citing the drowning deaths of three men in two separate incidents in 2015, in the same waters where they taught their kids to swim. “I’ve kayaked for years out there. …My son and his friends would go to the point and body surf. …You could step way out there and collect sharks’ teeth and do whatever, and you just can’t do that now,” Garcia said.

Tulkin contends that no one knows the full environmental impact of the Cove Point operation because federal regulators didn’t consider the ill effects of the fracking that harvested the gas nor of the greenhouse gases emitted when it is liquified, transported and burned throughout the world.

The Federal Energy Regulatory Commission, which approved the project after studying the issue for two years, determined it was “in the public interest” and would not significantly affect the “quality of the human environment.”

The regulators required Dominion to take various steps to mitigate local environmental concerns. But they also held — and state officials and a federal appeals court affirmed — that they were not required to consider concerns associated with the fracking industry at large.

Critics argue that in supporting the facility, state and federal regulators abdicated their responsibility to people and the environment not just in Maryland, but communities hundreds of miles away. See the Comment(s) to this Article below.

David Goldwyn, the U.S. special envoy for international energy affairs from 2009 to 2011, worked to pitch U.S. shale gas to foreign investors alongside then-Secretary of State Hillary Clinton. Now an international energy consultant, Goldwyn says Cove Point is “very well-positioned” to maintain its place in the market for many years to come given its proximity to the near-boundless Marcellus Shale.

Environmentalists should welcome that, he said, particularly given that coal-dependent developing countries are among Dominion’s customers.

Goldwyn argues the world should be moving from coal and diesel to natural gas as fast as it can — even if that means one day abandoning LNG plants like Cove Point once technological innovations make wind and solar a truly viable alternative.

“In the meantime, I will take every short-term [greenhouse gas] reduction I can get,” Goldwyn said.

Cove Point critics vehemently disagree, arguing the government should be trying to shutter the plant as a significant contributor to greenhouse gas emissions and move immediately toward renewable energy.

“I’m very, very concerned about our future, and not just here in Cove Point,” Garcia said. “I mean, we will be extinguished before everybody else, but we are a canary in a coal mine. …

“This is not the future. This is not the way to go. Period.”

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The 1640 MW coal-fired Chesterfield Power Plant is on the James River near Richmond, VA

Comments on air permit for giant new natural gas power plant in Charles City, Virginia

From an Article by Sarah Vogelsong, Virginia Mercury, March 19, 2019

A proposed new natural gas-fired power plant in Charles City County, which, if built, would be among the largest power generators in the state, has sparked few objections, even as other new gas infrastructure has faced a contentious path to approval.

Only three people spoke at a hearing hosted by the Virginia Department of Environmental Quality March 5 on the granting of a “prevention of significant deterioration” permit for the planned Chickahominy Power Station.

The permits are required for the construction of any new air pollution source that emits more than 100 tons per year of any of a set of pollutants identified by DEQ, including sulfur dioxide, carbon monoxide and particulate matter, among others.

For Charles City Supervisor Bill Coada, who attended DEQ’s March 5 hearing, there was little to fear from the proposed natural gas power station. “Of course we have concerns about the air quality,” he said. But, he added, “if you compare it to a coal-fired unit, you’ll find these are much cleaner.”

The Chickahominy Power Station is being developed by Chickahominy Power, LLC, a subsidiary of Balico, LLC, that was formed for the purpose of developing and operating the facility. Plans submitted to the State Corporation Commission and DEQ describe it as a combined-cycle natural gas generation facility with three turbines that will be capable of producing 1,650 megawatts. By comparison, Dominion Energy’s recently finished Greensville combined cycle power station is 1,588 megawatts and the company’s coal-fired Chesterfield Power Station is the largest fossil-fuel plant in Virginia at 1,640 megawatts.

As an independent power producer, Chickahominy would sell its power directly to the PJM Interconnection wholesale market. Located just over half a mile east of the intersection of Chambers and Roxbury Roads, the project’s 185-acre site surrounds Dominion Energy’s existing Chickahominy Substation and is crossed by two of Dominion’s transmission lines and a Virginia Natural Gas pipeline.

Documents from DEQ show that of 10 proposed emission constituents, seven are above the threshold set by the department to classify a facility as a major stationary source of the pollutant. These include three types of particulate matter, nitrogen oxide, carbon monoxide, volatile organic compounds and carbon dioxide equivalents.

Mary Finley-Brook, an associate professor of geography and environmental science at the University of Richmond aired concerns about the level of emissions that the plant is expected to produce at the March 5 hearing and recommended that the project be sent to the State Air Pollution Control Board for review.

“The one actually that concerns me the most would be the greenhouse gas emissions, so the carbon dioxide equivalent,” she told DEQ. “One of the main reasons why I think this permit should be rejected is because we are looking to limit our greenhouse gas emissions from our fossil-fuel sector.”

Steve Fuhrmann of Providence Forge also cited worries about emissions. “We already have a higher incidence than normal of both [chronic obstructive pulmonary disease] and asthma in this county, and any additions to our polluting atmosphere … is of great concern,” he said. (VDH maps show that relative to other areas of Virginia, Charles City County and the surrounding region show higher incidences of asthma.)

An engineering report by DEQ has found that “approval of the proposed permit is not expected to cause injury to or interference with … health.” As a further safeguard, the department has also attached to its draft permit the requirement that the facility carry out continuous emissions monitoring, which will constantly track and record the pollutants the power station is producing.

A ‘sudden surge of interest’ in new power production

Still, for some residents, the proposed Chickahominy Power Station is only the tip of the iceberg.

The project is the third major energy generator proposed for the county in the span of four years. In 2015, the Board of Supervisors approved a special use permit for the C4GT power station, another natural gas facility that Michigan-based NOVI Energy says it plans to develop on 88 acres less than a mile from the Chickahominy facility.

The C4GT facility, which has not begun construction (earlier this month, the SCC granted its certificate of public convenience and necessity a two-year extension), has a planned capacity of 1,060 megawatts.

Finally, this spring, the board is considering ambitious plans by Utah-based sPower to construct a 340-megawatt solar farm on more than 2,000 acres of land previously used for timber. While that project has not yet received the special use permit it needs to move forward in the county, the Charles City Planning Commission showed little opposition to it, voting 5-1-1 to recommend its approval.

If all three facilities are built, Charles City County will become one of Virginia’s biggest power producers, according to data collected by DEQ. “Geography has dictated this sudden surge of interest in Charles City County,” Coada said.

Balico director of development Jef Freeman, Jr., said growth in Virginia’s data centers is a primary driver of Balico’s interest in the Chickahominy project. “It’s really driven by the economic activity that’s going on in the region,” he said. “Data centers themselves require significant amounts of energy to support what they do and very reliable power.”

However, many of the companies building data centers are increasingly pushing to power them with renewable energy.

Charles City County, for its part, has highlighted the desire to develop its industrial assets in its 2014 Comprehensive Plan, which calls for the creation of a second industrial park, industrial reserve areas and a new industrial corridor overlay district.

Still, the handful of residents at the March 5 hearing expressed qualms about how the combination of new power generators might affect air quality overall.

Stanley Faggert, the DEQ’s minor new source review coordinator, said the agency had included the projected emissions from the C4GT plant in its air quality modeling for the Chickahominy Power Station. “We do model the background and we take into account existing sources around the facility,” said Michael Dowd, DEQ’s Air and Renewable Energy Division director. “It’s something we look at carefully.”

Fuhrmann asked that if DEQ decides to grant the permit, it take steps to do additional monitoring, as the closest monitoring station, at Shirley Plantation, sits in the opposite direction from prevailing winds relative to the Chickahominy Power Station. Dowd, however, said that the Shirley monitoring station “is darn close as far as monitoring goes” and observed that “many of these air quality impacts are regional in nature and not local.”

For Coada, the question comes down to not only the need for Charles City County to expand economically, but Virginia’s broader attempts to embrace clean energy. “When you look at what it’s replacing,” he said, “it’s actually doing the commonwealth a favor.”

Not everyone agrees. Thomas Hadwin, a former electric and gas utility executive in New York and Michigan who lives in Waynesboro, said that approval of the project “may not be good energy policy in the long run.”

Besides emitting significant amounts of greenhouse gases, he said, the plant would consume a large amount of Virginia Natural Gas’ supply to the region, which VNG has indicated is constrained. Furthermore, Hadwin questioned whether the demand exists in Virginia for two new major natural gas plants.

PJM, the regional transmission organization that coordinates wholesale electricity in all or parts of 13 states and the District of Columbia, including Virginia, is expecting capacity to significantly outstrip demand in the near future, according to data from the organization. Dominion has said it has no plans to build new combined-cycle natural gas facilities.

And C4GT, which this March petitioned the SCC to extend its certificate of public convenience and necessity for an additional two years, justified the project’s delay on the basis of “unexpected change in market for additional electric generating capacity.”

“These people are trying to move into a marketplace that’s already flooded with capacity,” said Hadwin.

Freeman, however, said that Chickahominy Power would not be pursuing a project that it didn’t think was viable. “There’s a lot that goes on behind the scenes to determine this kind of project,” he said, adding that “even with the two projects that are proposed, neither are assured of proceeding.”

The comment period for the VA-DEQ’s draft permit for the Chickahominy Power Station ended on March 20, 2019.

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