Statement of
On The
SPARROWS POINT PROJECT
Submitted To The
Cooperating Agencies:
U.S. Department of
Homeland Security
NOTICE OF INTENT TO PREPARE AN
ENVIRONMENTAL IMPACT STATEMENT
Docket
No. PF06-22-000
North Point/Edgemere Volunteer Fire Company
Sparrows Point, Maryland
Introduction
My name is Norris
McDonald and I am the founder and president of the African American
Environmentalist Association (AAEA).
This written statement is being submitted to the Federal Energy
Regulatory Commission (FERC) to provide our views on environmental issues
related to the Sparrows Point Project (SPP), a proposed liquefied natural gas
(LNG) import facility and gas pipeline. The African American Environmentalist
Association supports LNG terminals because of the need for additional natural
gas for electricity generation. However,
we will withhold a position on this project until the relevant issues are
included in an environmental impact statement (EIS).
AAEA was founded in
1985 and is a national, nonprofit organization dedicated to protecting the
environment, promoting the efficient use of natural resources, enhancing human,
animal and plant ecologies and increasing African American participation in the
environmental movement. AAEA’s national headquarters is in the Washington, DC
Metropolitan Area. We have chapters nationwide and members worldwide.
The Sparrows Point
Project will consist of an onshore LNG import and storage terminal and an
87-mile natural gas pipeline.
Environmental Issues
Environmental Justice
Turner’s Station is
a community located near the proposed LNG facility. This will probably be an environmental justice issue for the
proposed facility because it is predominantly black.
The communities north of the facility are farther away and predominantly
white. Environmental justice applies even if residents of a community
‘perceive’ that a proposed facility poses a threat. Professional, mainstream (white) environmental organizations will
make sure that any environmental justice consideration is leveraged to the
maximum extent as a tool to prevent this project from being approved. This concern, however, rarely if ever
translates to any of them living in one of these communities regardless of its
actual or potential pollution level.
AAEA will withhold judgment on the environmental justice merits of this
case until we have scoped and polled the Turner’s Station community on their
feelings and position on this project.
Moreover, the EIS should provide the history of the Dundalk/Sparrows
Point area. Bethlehem Steel operated a
steel facility at this location for years.
The emissions from its smokestacks were orange while providing jobs for
many Baltimore residents for decades.
The waterfront on
both sides of the Patapsco River is heavily industrialized, as is much of
Baltimore. It is an old industrial city
and vulnerable populations have been exposed to its pollution for its entire
history.
An
environmental justice issue that is not normally addressed in these types of
proceedings is the lack of minority participation in energy infrastructure
projects. There should clearly be a
consensus on the historical reasons for this exclusion. This same history can also explain the lack
of amenities in black communities. Blacks do not own the oil, gas, coal, electricity,
gas pipelines, electricity transmission lines, refineries, tankers, oil fields,
outer continental shelf drilling platforms, power plants, or oil, gas and
utility companies that distribute energy in the United States. In fact, blacks
do not own one import tanker. Blacks,
who make up 13% of the American population, also do not exert influence from
the demand side of energy use. Blacks do not own, distribute nor use energy to
their advantage. Blacks must utilize
energy policy to become owners and suppliers of energy.
What is AES’ corporate
responsibility regarding the historical exclusion of blacks from participating
in the development of America’s energy infrastructure? Should FERC consider the historical
exclusion of blacks from participating in energy infrastructure development in
its environmental justice analysis? We
believe that AES and FERC should give this issue serious consideration. We also believe that state and local
regulators should give this issue serious consideration in the approval
process.
AAEA has given much thought and
research to the issue of black exclusion from participating in energy
infrastructure projects and community development. Here
are recommendations we think the local community, AES and FERC should consider:
1.
AES should purchase the homes or pay homeowners and businesses near the
exclusion zone a reasonable fee in exchange for support for the project.
2.
AES should pay for any increase in homeowners and business owners’
insurance premiums near the facility for those choosing the fee.
3.
AES should provide 51 percent minority ownership in the Mid-Atlantic
Express, LLC, the proposed owner of the 87-mile pipeline. Mid-Atlantic Express, LLC is a regulated project company formed
by The AES Corporation to own and operate the Mid-Atlantic Express Pipeline. Minorities own virtually no energy
infrastructure in the United States.
4.
AES should build a state-of-the-art recreation and computer facility
similar to the Fed Ex Field facility in Turner’s Station.
Adopting and implementing these
recommendations would truly represent environmental justice. We strongly suggest that such a path is good
business and could go far in preventing delays, uncertainty and litigation for
this project. Washington Gas is having trouble obtaining a
permit to build a peak shaver LNG storage facility in Prince George’s County
because of resistance from the local community and the County Council. We are trying to convince them that a
compromise similar to the one described above would go far in obtaining the
zoning variance they seek to build their facility. We believe our recommendations can save time and litigation
expenses for these types of projects.
Finally, we believe the approving agencies and state legislators in
Maryland and Baltimore would look favorably on the company and the project if
they agreed to implement these recommendations.
Dredging
Dredging
has a controversial history in Maryland, particularly on the Patapsco
River. Maryland probably lost bids for
supertanker business because of problems with deepening shipping channels. The Woodrow Wilson Bridge project was
threatened by dredge disposal issues
It took a private land owner in Virginia to solve the Woodrow Wilson
Bridge mud disposal problem. It
probably helped that the Woodrow Wilson Bridge mud was ruled to have no serious
contamination. Considering that the
Sparrows Point mud is adjacent to a facility that manufactured steel for
decades means the sediment is probably contaminated. We look forward to analyses included in the EIS on the sediment
at the site. Regardless, contaminated
sediment is not a deal breaker. It will
just complicate acquiring an appropriate disposal site.
Air Pollution
We
do not believe the AES Sparrows Point Project will be a new source of
significant air pollution. The EIS will
surely cover whether the facility has to obtain a Clean Air Act permit. Although methane is a potent greenhouse gas,
the contained engineering of the project should prevent significant
emissions. Of course, Baltimore is
categorized as ‘severe’ in terms of Clean Air Act nonattainment, so AES should
have some concern about penalties that could be issued to the State of Maryland
that might prevent it from getting a permit to build this facility.
The passage of the Healthy Air Act by the Maryland Legislature, and signed
by Governor Ehrlich on April 6, 2006, is an indicator that significant pressure
will be placed on the state’s coal-fired electricity generation plants to clean
up emissions or close. The Healthy Air
Act (HB189 / SB 154) requires that
emissions of four main pollutants 1) mercury, 2) carbon, 3) nitrogen, and 4)
sulfur be reduced at the seven dirtiest coal-burning plants in Maryland.
Nitrogen oxide will be capped at 20,216 tons a year by 2009. Sulfur dioxide
levels will be limited to 48,618 tons a year by 2010. And mercury emissions are
to be reduced 80 percent by 2010. The Healthy Air Act requires carbon dioxide
reductions by having Maryland join a multistate program called the Regional
Greenhouse Gas Initiative (RGGI). RGGI sets goals for states to reduce carbon
dioxide. Companies will be able to sell or trade their carbon dioxide
allowances. Maryland is an "observer" of RGGI, participating in
policy discussions, but not agreeing to make reductions. The law allows the
state to withdraw from the regional consortium after January 1, 2009 if reliability
and cost issues become a problem. Of
course, this opt-out provision will not prevent the pressure on coal plants to
significantly reduce emissions.
Ultimately, utilties will turn to natural gas as a convenient
substitute. Thus the need for
additional gas via LNG imports.
Water Pollution
The
AES SPP will not pose a threat to drinking water and does not appear to pose a
wastewater or stormwater effluent problem.
The ethylene glycol used to a heat transfer medium should not pose a
serious threat to the river.
An
accidental release of the liquid would gasify, evaporate into the atmosphere or
burn off and would not pose a threat to the river.
Brownfields
Although
it is not being characterized as a Brownfields project, we believe that such a
characterization would be appropriate and the project should pursue any
benefits that might be available from such a characterization. The EIS should also examine whether the area
is in an Enterprise or Empowerment Zone.
Toxics
Clearly,
portions of this former Bethlehem Steel site are highly contaminated. Hopefully, the EIS will fully examine the
level of contaminants at the site, report the results and describe any possible
problems it might cause for this proposed project.
The
initial description of the project suggests that the dredge spoil might be
deposited on the site. The EIS should
provide a full description of such a plan with diagrams for such deposition and
containment.
Energy Issues
Competition is
heating up in the Maryland LNG market.
Washington Gas and Dominion Resources have been jousting over gas issues
related to the Cove Point site. We
suspect there is more to it than the quality of the gas that caused the leaks
in Prince George’s County. The proposed
Sparrows Point Project adds another competitive component to the local and
regional gas markets.
The reality of
electricity generation in America today is that natural gas power plants are
the only facilities that can be approved for construction in today’s
‘Not-In-My-Backyard’ (NIMBY) climate.
Although coal provides fifty percent of electricity generation and
nuclear provides another twenty percent, public opposition is significantly
limiting the use of these fuels.
Natural gas provides about twenty-one percent of the fuels used to generate
electricity in the U.S. but it is the cleanest burning fossil fuel. For this reason, it is the fossil fuel of
choice for utilities, environmental groups, regulators and the general public.
Unfortunately, Maryland and the Mid-Atlantic
region do not have sufficient local supply and domestic and Canadian supplies
are in high demand all over the country.
Limited supplies and increasing demand are leading to price
volatility. The solution is to import
LNG from nations with abundant supplies of natural gas. If capacity is not increased by importing more
gas, building larger pipelines and exploring for additional sources of natural
gas, America will continue to demand gas, put pressure on the supply side
and continue to drive up the price of natural gas. The EIS should examine the implications of this Maryland facility
sending the gas out of state to existing pipelines in Pennsylvania.
In its vaporized state, natural gas is voluminous and therefore the
rate of energy transferred moves rather slowly through high-pressurized
pipelines, especially when compared to oil. To get LNG, natural gas is
cooled to a temperature of minus 260 degrees Fahrenheit until it becomes liquid
and occupies 1/600 of its gaseous volume. Large tankers are then used to ship the
LNG to major markets. A typical liquefying plant costs about $1 billion,
tankers are priced at $250 million a piece and a terminal to store the LNG and
to "regasify" runs between $300 million and $500 million. AES is proposing to make a very large energy
infrastructure investment in Maryland.
Domestic LNG Facilities
There are
approximately 113 LNG facilities in the U.S.
Currently, there are only four import terminals and one export terminal,
which is located in Alaska. Two percent
of the natural gas used by homes and businesses comes from liquefied natural
gas. The gas is chilled to 260 below zero to be stored and transported in
insulated tankers and then reheated into gaseous form at terminals such as Cove
Point before being piped to customers.
Liquefied Natural
Gas (LNG) is increasing market share because of increased use of natural gas at
electric utility plants. Today, LNG makes up about 2 percent of all gas
consumed in this country but if the projects now under consideration become
real, then LNG imports could supply 15 percent of the nation's gas demand by
2025, according to the U.S. Energy Information Administration.
Right now, only
four LNG receiving terminals exist in the United States and are located in 1) Georgia, 2) Louisiana, 3) Maryland and 4) Massachusetts. One of the
largest facilities, owned by Dominion
Resources, is located about 40 miles from Washington,
DC, Cove Point terminal on the Chesapeake Bay in southern Maryland. Tankers
deliver the frozen LNG from the dock through two 31-inch diameter pipes
to storage domes a mile from shore. Imports of liquefied
natural gas are expected to increase. In addition to Cove Point,
Maryland, the nation's other three liquefied natural gas facilities - at Elba
Island, Ga., Lake Charles, La. and Everett, Mass. - also have proposed
expanding and new terminals are being proposed on both coasts. If the Sparrows Point facility is approved,
it will put Maryland in the forefront of LNG importation in the United
States. There are at least 60 planned,
approved and proposed North American LNG terminals
The increase in gas
prices has opened the door to LNG. Gas inventories needed for the winter
are still way below normal. The gas has to come from somewhere other than the
terrestrial Lower 48 because domestic supplies cannot keep up with
demand. San Diego's Sempra
Energy is building a $700 million LNG terminal in Louisiana and
has applied for permission to build a terminal in northern Baja California,
Mexico. ChevronTexaco's
is planning an LNG facility in the Gulf of Mexico, 36 miles from shore, which
will import 1.5 billion cubic feet per day of natural gas by
2007. ChevronTexaco’s proposed Pelican LNG terminal in the Gulf would be
the delivery destination for a huge gas production and LNG processing plant
planned for Angola. (EIA, Sempra, ChevronTexaco)
AES has LNG import
facilities in the Dominican Republic and Bahamas (0.83 Bcfd). AES builds and owns electricity generating
power plants worldwide.
Texas LNG Facility Approved. The Federal Energy Regulatory Commission (FERC)
approved a $500 million liquefied natural gas (LNG) complex in 2004 owned by a
three-company consortium that will be located in Quintana Island,
Texas. Freeport LNG Investments, Cheniere LNG and Contango Oil and Gas
will build the facility 70 miles south of Houston, Texas, which will have the
capability to unload 200 ships a year of LNG. The Freeport LNG venture will be partially financed by
ConocoPhillip oil company in exchange for a portion of the gas. Dow
Chemical will also receive a large portion of the gas. (FERC)
Sempra, parent of
Southern California Gas and San Diego Gas & electric, also faces a need for
natural gas to supply three power plants being built in Bakersfield, Phoenix
and Mexicali, Mexico. (Sempra)
A single tanker
carries enough LNG to supply the daily energy needs of more than 10 million
homes. LNG, chilled to minus 260 degrees Fahrenheit, expands 600 times when
warmed to its normal vapor state. Chicago Bridge & Iron Company is
the world's largest builder of the cryogenic tanks that hold LNG in its liquid
state. Fluor Corporation of Aliso Viejo, and the Houston based Brown &
Root, a division of Halliburton, Inc build liquefaction and regasification
facilities.
The first LNG plant
built in the U.S. was built in Alaska in 1969 and is still operating.
Foreign LNG Facilities & Suppliers
There are
approximately 240 LNG facilities worldwide.
In 2002, 12 exporting countries shipped approximately 5.4 Tcf of natural
gas to 12 importing countries.
Natural gas
resources are plentiful all over the world. In addition to the U.S., there are
huge reserves in Indonesia, the Persian Gulf states of Qatar and Oman, as well
as in Russia and several West African countries. In ascending
order, the countries controlling the largest reserves of natural gas are the United Arab Emirates, Qatar, Saudi Arabia, Iran and Russia.
ExxonMobil Corp, the world's largest energy company, is building a
$12 billion LNG system in Qatar. It will deliver 2 billion cubic feel a
day of natural gas to the U.S. starting in 2008. This unprecedented project
will supply 2% of total U.S. natural gas.
Norway's biggest oil and gas company, Statoil ASA, has signed a letter
of intent with Dominion to provide gas for the additional storage at the Cove
Point terminal.
An Australian Company is
proposing an LNG port off the coast of California. BHP Billiton, an Australia-based company submitted a
license application in 2004 to construct a $500-million floating
deep-water liquefied natural gas port terminal off the Ventura County
coast. The Cabrillo Deepwater Port, which would act as a receiving point for
shipments of California-bound natural gas, would be the first such floating
terminal on the West Coast. Stored liquefied natural gas would be converted to
vapor through a heat exchange system and transported by an undersea pipeline to
existing onshore natural gas facilities. The project would be built about 20
miles off the coast of Oxnard. BHP has stated that the terminal would also be
placed outside shipping lanes and marine mammal migratory routes, as well as
away from the Point Mugu Navy base and the Channel Islands National Marine
Sanctuary.
Shipbuilders LNG Tanker Contract. According to
officials in Qatar, Hyundai Heavy Industries,
Daewoo Shipbuilding and Marine and Samsung Heavy Industries Company
have won a $3.2 billion contract to build eight of the world's largest tankers
for shipping liquefied natural gas, with an option for eight more.
The Overseas Shipbuilding Group, a tanker owner listed in the U.S., and
Pronav Ship Management (no website) of Germany ordered the ships. (Bloomberg
News)
BP & Sempra Energy LNG
Contract. In 2004, BP, Europe's
biggest oil company, and partners in Indonesia's Tangguh LNG project announced
they will start to deliver as much as 3.7 million metric tons of the fuel to
Sempra Energy in Mexico in 2008, Indonesia's oil and gas regulator said. BP and San Diego-based Sempra have signed a
20-year sales contract. The LNG will be delivered to Sempra's planned terminal
near Ensenada in Baja California. There, the LNG will be returned to gas form
for use in power plants.
Conclusion
LNG is an excellent
fossil fuel for electricity generation in the absence of nuclear power and
clean coal generation. We need a mix of
energy sources to produce electricity. Maryland
cannot continue to oppose new generation and new transmission lines and expect
economic growth to continue without disruptions. In today’s environmental climate, natural gas will be one of the
primary fuels used for electricity generation.
To the extent that plants are built to utilize this fossil fuel, it
needs to be available in quantities sufficient to meet local demand. We cannot NMBY anytime
and anywhere and expect to have electricity all the time and everywhere.
ATTACHMENT 1
Existing, Proposed and Potential LNG
Terminals
CONSTRUCTED
APPROVED BY FERC
APPROVED BY MARAD/COAST
GUARD
CANADIAN APPROVED TERMINALS
MEXICAN APPROVED TERMINALS
PROPOSED TO FERC
PROPOSED TO MARAD/COAST
GUARD
POTENTIAL U.S. SITES
IDENTIFIED BY PROJECT SPONSORS
POTENTIAL CANADIAN SITES
IDENTIFIED BY PROJECT SPONSORS
POTENTIAL MEXICAN SITES
IDENTIFIED BY PROJECT SPONSORS
.
Source: FERC Office of Energy Projects.
As of June 1, 2006.