WASHINGTON: The Sierra Club said Thursday it will try to block an energy company’s plan to export liquefied natural gas from the booming Marcellus Shale formation.
Virginia-based Dominion Resources Inc. is seeking to export 1 billion cubic feet per day through a terminal it owns in Maryland. A previous legal settlement dating to the 1970s gives the Sierra Club the ability to reject any significant changes to the purpose or footprint of the existing natural gas terminal in Cove Point, Md.
The environmental group says the export project could result in major damage to the Chesapeake Bay and nearby Calvert Cliffs State Park in Maryland.
Dominion says the Cove Point terminal is well-situated to export gas from the prolific Marcellus Shale region, which lies beneath Pennsylvania, New York, West Virginia, Ohio and other states.
“The damage that this project would bring to the Maryland coast as well as the disastrous effects of the fracking boom on communities in states like Pennsylvania make it clear that exporting liquefied natural gas is bad news for Americans’ air, water and health,” said Michael Brune, executive director of the Sierra Club.
Exporting liquefied natural gas, or LNG, would drive up the cost of domestic natural gas, Brune said, reversing the effects of a natural gas boom that has driven U.S. prices to 10-year lows.
Thomas F. Farrell II, president and CEO of Dominion Resources, said the company intends to go forward with the project.
“We have reviewed the various regulations, agreements and rulings from various regulatory bodies governing the site and are confident that we will be able to locate, construct and operate a liquefaction facility at Cove Point,” Farrell told reporters.
Dominion will design the plant to minimize damage to the environment, Farrell said.
The dispute over the Maryland plant comes as federal regulators have approved the first large-scale natural gas export facility in the United States.
The Federal Energy Regulatory Commission cleared construction of the Sabine Pass LNG terminal in Cameron Parish, La., last week. The facility, owned by Houston-based Cheniere Energy Inc., will chill natural gas into a liquid that can be shipped on tankers, allowing U.S. producers to export natural gas overseas for potentially huge profits. An existing LNG import facility at the Louisiana site will be converted also to handle imports.
The push for exports represents a turnaround from just a few years ago, when U.S. companies were seeking to build LNG terminals that would receive natural gas from other countries.
Those plans changed as improved drilling techniques, such as hydraulic fracturing and horizontal drilling, allowed drillers to gain access to natural gas wells that were hard to reach in the past.
Hydraulic fracturing, also called fracking, involves blasting mixtures of water, sand and chemicals deep underground to stimulate the release of gas. It is often combined with horizontal drilling, which can increase production far beyond a vertically drilled well.
Brune, of the Sierra Club, called on the Energy Department to review potential dangers of fracking. No federal agency has fully analyzed or disclosed such dangers to the public, he said.
Gas companies say fracking has been used safely for decades.
Follow Matthew Daly’s energy coverage in Twitter: @MatthewDalyWDC.