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Dominion suit challenges Sierra Club claim about LNG exports

Dominion Resources Inc. sued to confirm its right to construct a natural gas liquefaction plant at its Cove Point LNG terminal in Lusby, Md. The Richmond, Va., utility holding company sought a declaratory judgment from the Calvert County, Md., Circuit Court in response to what it considers an erroneous claim by the Sierra Club that the environmental organization has authority under a 2005 agreement to block the project.

Dominion said in its May 18 complaint that a 2005 agreement, to which it and the Sierra Club are parties, specifically permits all the activities related to the liquefaction project. The Sierra Club has said that the agreement covered LNG imports, but not exports.

“This project is of immense value to Calvert County, the State of Maryland, and the United States,” said Gary L. Sypolt, chief executive of the company's Dominion Energy business unit. “We have a long history of working with our environmental partners at Cove Point. Although the Sierra Club has chosen not to work with us in this instance, we are confident we are right and believe the best time to resolve this issue is now.”

Dominion said once it’s completed, the Cove Point gas liquefaction project is expected to handle LNG exports which would reduce the US trade deficit by more than $2.8 billion/year. It also would generate directly and indirectly about $1 billion/year in additional federal, state, and local government revenue, including $40 million/year in Calvert County where Dominion would become the largest taxpayer, the company added.

The Sierra Club said in an Apr. 26 letter to Paul E. Ruppert, senior vice-president at Dominion Transmission Inc., that the LNG export proposal would further industrialize land at the plant site, substantially increase hydraulic fracturing to recover gas from the Marcellus and other tight shales, and increase gas and electricity prices.

“We're disappointed and believe that our settlement clearly forbids Dominion’s activities and does not allow for export from the Cove Point terminal,” Deb Nardone, director of the Sierra Club’s Beyond Natural Gas campaign, said in a statement. “We will review the lawsuit and respond appropriately.”

Contact Nick Snow at nicks@pennwell.com.


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