Dominion Resources Inc. (NYSE: D) has a plan for the trillions of cubic feet of liquefied natural gas in the U.S.
In the U.S., natural gas only fetches roughly $2 per British thermal unit. In Europe, on the other hand, it is worth $6 to $8. And in parts of Asia, it could bring in $13 per unit.
So Dominion wants to turn its natural gas terminal at Cove Point, Maryland into a natural gas export facility.
But according to a legal agreement dating back to 1972, Dominion cannot make any of these major changes to the terminal without the express consent of the Sierra Club, an environmental group.
And the Sierra Club refuses to approve.
Executive director Michale Brune says that the sort of changes necessary to make the Cove Point terminal an exporter would damage the area around it:
“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.”
Hydraulic fracturing, or fracking, is the process of releasing natural gas from shale rock by injecting a mixture of water, sand, and chemicals into the rock to break it apart. It has been the driving force behind the shale boom, but it has also met with much resistance by environmentalists.
The Sierra Club believes the exports will ramp back up the low natural gas prices by lowering domestic supply.
But Dominion’s CEO, Thomas F. Farrell II, reminded them of the profit to be made by selling where prices are higher. And he also indicated that making Cove Point an exporting terminal could create thousands of jobs.
The legal settlement barring Dominion from moving ahead with this plan was last updated in 2005, allowing Dominion to add storage units. But it forbids large-scale construction without another update, an update the Sierra Club won’t provide.
Thomas Farrell has said that Dominion is still planning to begin construction in 2014. The company hopes to have it operational by 2017:
“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.”
That’s all for now,