Department of Commerce decides appeals involving planned LNG terminals

Pipeline & Gas Journal, August, 2008

The Department of Commerce has issued its decision on two appeals of state objections involving the proposed construction and operation of LNG terminals in Maryland and Massachusetts. The states independently objected to the projects on the grounds that the proposals were inconsistent with their federally approved coastal management programs. Under the Coastal Zone Management Act, federal agencies may not issue any permits required for a project if a state has objected, unless the Department of Commerce, on appeal, overrides the objection.

The decisions involved the AES Sparrows Point LLC and Mid-Atlantic Express LLC proposals. The Department overrode Maryland's objection to the AES Sparrows Point, LLC and Mid-Atlantic Express, LLC proposal to construct and operate an LNG facility east of the Port of Baltimore. The Department determined that the national interest served by the facility outweighs its limited adverse coastal effects.

* The proposed project would help meet regional energy demand by providing enough natural gas capacity to heat approximately 3.5 million homes per day or to generate electricity for 7.5 million homes per day.

* The impact of dredging to fish and aquatic vegetation will not be significant.

The Department upheld Massachusetts' objection to a Weaver's Cove Energy, LLC and Mill River Pipeline LLC proposal to construct and operate an LNG facility and associated pipeline near Fall River. The Department determined that adverse coastal effects--particularly navigational safety concerns associated with delivering LNG to the terminal by tanker up the Taunton River--outweigh the national interest.

When the Department overrides a state objection, federal agencies may proceed with normal permit and license processes for the project. The project will also be required to comply with all state and local permitting regulations, and complete all required environmental reviews.