Maryland LNG project wins CZMA appeal

Nick Snow
Washington Editor

WASHINGTON, DC, June 27 -- US Commerce Secretary Carlos Gutierrez overturned one state's objection to a proposed LNG project but upheld another as the US Department of Commerce issued two federal consistency appeals decisions on June 26.

The secretary ruled against Maryland's objection to AES Sparrows Point LLC and Mid-Atlantic Express LLC's proposal to build an LNG facility east of the Port of Baltimore on Chesapeake Bay. However he upheld an objection by Massachusetts to Weaver's Cove Energy LLC and Mill River Pipeline LLC's proposal to build an LNG terminal and pipeline near Fall River.

Sponsors of each project had appealed to a rule after the state had determined that the project was not consistent with its plan under the Coastal Zone Management Act. Under CZMA, federal agencies may not issue permits for a project unless the Commerce secretary overrides the state's consistency objection on appeal.

In a decision announced by the National Oceanic and Atmospheric Administration's Office of General Council for Ocean Services, Gutierrez overrode Maryland's objection after determining that the national interest, which would be served by the Sparrows Point project, outweighs its limited adverse coastal effects.

The proposed terminal and associated pipeline would help meet regional energy demand by providing enough natural gas capacity to heat about 3.5 million homes daily or to generate enough electricity each day for about 7.5 million homes, the decision indicated. The impact of dredging on fish and aquatic vegetation would not be significant, Gutierrez said.

The decision means sponsors of the Sparrows Point project can continue to pursue federal permits and licenses, but will still be required to comply with all state and local permitting regulations and complete all required environmental reviews.

A timetable at the project's online website anticipates that the Federal Energy Regulatory Commission will complete a final environmental impact statement by Aug. 15 and issue a certificate by Nov. 20. Detailed engineering and procurement would occur during 2009's first quarter, and construction would begin during second-half 2009, with completion scheduled for second-half 2012.

In the Massachusetts decision, Gutierrez upheld the state's objection because it determined that adverse coastal effects, particularly navigational concerns associated with tankers traveling up the Taunton River to deliver LNG to the terminal outweighed the project's national interest.

Contact Nick Snow at nicks@pennwell.com.

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