By Peter Galuszka
Riding a chunky, balloon-tire bicycle may seem awkward enough, but imagine pedaling in a six-feet-wide concrete tunnel for one mile on the bottom of the Chesapeake Bay in Maryland.
It’s amazing what we Bacon’s Rebellion bloggers do to keep you readers informed, but it’s all in a day’s work — just like sucking in your gut when we read your nasty comments.
I’m here in a plastic white hardhat and safety gases trying to get used to the sense of confinement as we cycle to the terminal one mile off Dominion Transmission’s Cove Point facility to handle Liquefied Natural Gas (LNG). Richmond-based Dominion bought the facility in 2002 to import LNG from various global points such as Trinidad and Norway.
The last time a commercial LNG tanker actually showed up to unload, it was October 2011. The fracking revolution and the resulting flood of gas negated the logic of importing. Now Dominion wants to export LNG and has invited me along to see the facility. I wrote about it this Sunday in the Washington Post.
I found this one a hard call. The environmental lobby is against exporting gas, saying it will increase domestic prices and better time should be spent on developing renewables.
I say no to the first and yes to the second. Gas is now about $4 per million BTUs, far down from the $12 or so level of a few years ago. When the fracked flood hit, prices went way down to $2 mmBTU, but my logic is that they’d have to export a lot of gas to make a real difference in pricing.
On the second point, the greens are right. Maryland has a renewable portfolio standard of having 20 percent of electricity generation come from renewables like wind or solar by 2020. It is now about 7 percent. Granted, the gas that Dominion wants to export will go to Japan and India which are outside of the standards (Virginia’s, true to form, are voluntary, of course!), but their $3.8 billion or plan to allow Cove Point to export does absorb resources that could go to developing renewables.
If the project gets approval from the Federal Energy Regulatory Commission and the Department of Energy as Dominion expects by 2014, it is in a position to tap two pipelines carrying Gulf Coast gas in Northern Virginia, which is also the terminus from another pipeline running from the north and Pennsylvania’s Marcellus Shale formation where fracking really has taken off in the past few years.
To be sure, the verdict’s still out on fracking, which involves tough chemicals and lots of high pressure water to shatter geologic formation and get gas and oil unavailable before. It still hasn’t been proven that the chemicals won’t end up in the groundwater somewhere and wells can give off methane which can be flammable and a global warming ingredient. New York State still has a moratorium on fracking. Out West, energy firms are slurping up precious water for fracking while leaving farmers and herders dry.
On the plus side, gas released half of the CO2 as coal does, doesn’t kill miners and doesn’t result in highly destructive mountaintop removal. Only one person has been killed in a gas-related accident in more than 30 years of operation.
Cove Point has had a checkered history. It was built in the late 1970s during the energy crisis years and the suddenly went dormant when a pricing dispute with Algeria ended imports for a while. It’s been up and down since, with other owners. Dominion has agreements to lock in export shipping prices for 20 years and won’t own the gas which should make it immune from global gas price fluctuations. But before one thinks that exporting from Cove Point is some kind of Brave New World, consider that Dominion has all the contracts with two Asian utilities it needs. It isn’t looking for more customers.
There are 15 other export proposals in the U.S. and old field Senators are urging expediting permit processing. Dominion says that only six or so of the LNG export facilities will actually go through. That has more to do with economics than regulations.
