FERC to reexamine security for Cove Point LNG terminal Friday

By the OGJ Online Staff

WASHINGTON, DC, Nov. 14, 2001 – The US Federal Energy Regulatory Commission has scheduled a Friday hearing to determine if security concerns justify reconsideration of its decision to allow the Cove Point, Md., liquefied natural gas terminal to reopen.

Williams Cos. Inc., Tulsa, Okla., received FERC approval a month ago to restart the terminal next May and expand storage capacity to 7.8 bcf from 5 bcf. (OGJ Online, Oct. 12)

Natural gas industry executives Wednesday said they hope FERC will affirm that decision. An industry lobbyist said, “Prices may be low now but we need to be thinking of adding alternative supply sources, not taking them away in this day and age.”

Cove Point was built in 1974 and later closed due to poor economics. It was used as a gas storage site for a period of time in the 1980s.

FERC officials agreed to revisit their approval for Cove Point after state officials, local residents, and some lawmakers complained reactivation would have “national security implications.”

FERC officials will meet with local policy makers and federal security officials at the Nov. 16 hearing in Washington, DC. FERC is expected to announce a final decision within a month.

Meanwhile, Williams intends to proceed with construction bids for a fifth tank that would increase storage 2.5 bcf .

Sen. Barbara Milkulski (D-Md.) led the effort to overturn FERC’s earlier decision. She argued residents fear ships carrying LNG could be hijacked and used to damage the Calvert Cliffs nuclear plant 4 miles from the LNG terminal. Milkulski also urged the Federal Bureau of Investigation and the White House’s Office of Homeland Security to stop the LNG plant from reopening.

Gas industry officials said the Bush administration has learned from its inquiries about the safety of other LNG operations. LNG shipments into Boston harbor were suspended following the Sept. 11 terrorist attacks but the US Coast Guard later allowed them to resume.

US officials explained LNG shipments are not a security threat although better scrutiny is needed to protect all critical energy infrastructures.

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