AES Corp. asks for federal approval to build liquefied natural gas

Daily Record, The (Baltimore), Jan 9, 2007 by Andy Rosen

The AES Corp. asked for federal approval yesterday to build its proposed liquefied natural gas terminal at Sparrows Point in Dundalk.

The project has been widely discussed over the past year, but this is one of the first concrete steps for the Virginia-based power company.

Project Director Kent Morton said it is significant that the project got through the preliminary, "pre-filing" stage, and is now before the Federal Energy Regulatory Commission.

"It's a huge milestone," he said. "So many projects don't get to this stage because of the depth of review required to file an application."

AES is asking FERC to approve the construction and operation of the terminal, which would accept marine shipments of LNG and store them in three, 160,000-cubic meter storage tanks. The facility also would convert LNG into actual gas and ship it through regional pipelines.

FERC can approve the company's application, and will likely begin taking public input and studying the environmental effects of the project soon.

AES could face stiff opposition as it seeks approval, as area groups gear up to challenge the project

Company officials have maintained that FERC has the final authority to decide where to build LNG terminals, even in the face of a Baltimore County zoning ordinance that prohibits the terminal from being built.

A state-appointed task force on LNG also finished a report to the state last week, which brought up safety and environmental concerns about the Sparrows Point project. The group advised state legislators that the project is not in Maryland's best interests.

The FERC approval process can take between 10 months and a year, and allows interested groups to submit information and take part in the proceeding. The commission will create an "environmental impact statement" on the project before making its final decision.

Tamara Young-Allen, spokeswoman for FERC, said the commission is empowered under federal law to decide on LNG permits, but the state's position can come into play.

Under federal law, she said, issues having to do with coastal management, air and water quality and historic preservation are delegated to states. If state and local officials find that the project raises concerns about those subjects, that finding can nullify FERC approval.

"It can stop progress or kill a project that the commission has approved," she said.

Morton, of AES, said the company intends to file for state permits, and believes the project will stand up to Maryland regulations.

"You can't just arbitrarily deny a permit because somebody thinks it's a good idea or a bad idea," he said.

Some political leaders and community members welcomed the beginning of the FERC permitting process as a further avenue to oppose the project.

Sharon Beazley, who heads the LNG Opposition Team, said her group's legal counsel is already preparing a response to the application.

"We're glad that the process is starting and we feel like we're prepared," she said. "We're just in a real strong position and facts speak for the facts."

Baltimore County officials, many of whom have opposed the LNG terminal, will continue to fight against its approval through the FERC permitting process.

"We will be prepared to respond in depth as to why this is the wrong project for Baltimore County," Donald Mohler, spokesman for County Executive James T. Smith Jr. "We are confident that FERC will not approve this project."