In the short run, it’s hard to dispute the logic here. Exporting gas represents a fundamental shift in the United States’ global energy equation. It would reduce U.S. dependence upon foreign energy and help rebalance a badly out-of-whack trade ledger. When measured against the status quo, it would also help the environment. Natural gas emits about half as much climate-changing carbon dioxide as does coal; miners don’t die and Appalachian mountaintops aren’t destroyed to produce it; and its use doesn’t generate radioactive waste requiring thousands of years of storage.
Yet many environmentalists are far from sold. As Josh Tulkin, director of the Maryland chapter of the Sierra Club points out, correctly, natural gas exports will encourage more fracking in states such as Pennsylvania and West Virginia, a practice that remains controversial because of the potential for serious groundwater contamination. There are also difficult-to-quantify problems with methane, a highly potent greenhouse gas, leaking from drilling rigs. Finally, opponents argue that exports could increase the domestic price of gas, perversely slowing the shift away from dirty coal at U.S. power plants. But given the sheer flood of gas that continues to come online, that concern at least seems unfounded.
For the key player — Dominion Transmission — it doesn’t appear to be a difficult call. Exporting from Cove Point is almost a no-lose proposition. Built during the energy-crisis years of the 1970s, Cove Point has had a checkered past. Highly volatile gas prices all but shuttered the facility several times before Dominion Transmission bought it in 2002. It then invested $1 billion in upgrades to allow the facility to handle major importers, but Donovan said that Cove Point nonetheless saw its last commercial LNG tanker in October 2011.
That investment may yet turn out lucky. As fracking lowered domestic prices, Dominion Transmission realized that it had most of an export infrastructure — a tanker terminal, pipes and seven tanks that act like giant Thermos bottles — already in place. All that was needed was the gear to turn vapor gas into a shippable liquid at minus-265 degrees Fahrenheit. Dominion Transmission had no trouble signing 20-year supply contracts with Japan’s Pacific Summit Energy and Indian’s GAIL-Global, which now pay at least four times the U.S. rate for natural gas. With the two contracts, Dominion Transmission has all the revenue it needs for financing. Final approval from the Federal Energy Regulatory Commission and the Energy Department is expected by early next year.
Calvert County will also obviously benefit as well. Watery and scenic, it is home to retirees and commuters. Thousands of military service members and civilians work at Patuxent River Naval Air Station, where watching the skies for pilotless drone aircraft is a popular activity. The utility says that county business sales will be boosted by $2.6 billion during the construction and operation of the facility. Calvert will also get $16 million and Maryland will receive $59 million in income and sales taxes over the life of the project, Dominion says.