DOE rejects Sierra Club appeal over Dominion Cove Point LNG project

An official at the U.S. Department of Energy on April 18 rejected a Sierra Club appeal of a DOE approval for liquefied natural gas (LNG) exports out of the in-construction Dominion Cove Point LNG facility in Maryland.

DOE’s Office of Fossil Energy (DOE/FE) had issued two related orders under the Natural Gas Act (NGA) which together granted the application of Dominion Cove Point LNG LP filed in October 2011.

The April 18 rejection letter was signed by Christopher A. Smith, Assistant Secretary Office of Fossil Energy.

In its application, DCP requested long-term, multi-contract authorization to export domestically produced LNG by vessel to nations with which the United States has not entered into a free trade agreement requiring national treatment for trade in natural gas and with which trade is not prohibited by U.S. law or policy (non-FTA nations). DOE’s final order authorized DCP to export LNG in a volume equivalent to 281 billion cubic feet per year (Bcf/yr) of natural gas (0.77 Bcf per day (Bcf/d)), for a term of 20 years.

DCP’s exports will originate from liquefaction and related facilities under construction at the existing Cove Point LNG Terminal (DCP Terminal), which DCP owns and operates in Lusby, Maryland. DCP is a unit of Dominion Resources (NYSE: D).

In approving the exports, DOE/FE determined that Sierra Club (as well as other intervenors and participants) had not demonstrated that DCP’s proposed exports would be inconsistent with the public interest, as would be required to deny the authorization. DOE/FE therefore granted DCP’s application, but conditioned the export authorization on: satisfactory completion of DCP’s environmental review process under the National Environmental Policy Act, then on-going before the Federal Energy Regulatory Commission (FERC); and issuance by DOE/FE of a Finding of No Significant Impact (FONSI) or a Record of Decision under NEPA.

On May 7, 2015, DOE/FE issued the Final Order granting final authorization for DCP to export domestically produced LNG to non-FTA countries in a volume equivalent to 0.77 Bcf/d of natural gas. The Final Order was conditioned on DCP’s compliance with the 79 environmental conditions adopted in a FERC order. On June 8, 2015, Sierra Club timely filed a request for rehearing of the Final Order.

In the April 18 decision, Smith rejected all Sierra Club arguments, including that DOE failed to adequately measure how LNG projects lead to environmental harm by stimulating U.S. production of natural gas, and that DOE failed to adequately measure climate change impacts due to LNG usage.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.