Dominion (NYSE: D) Poised for LNG Exports

Keith Kohl

Written By Keith Kohl

Posted May 13, 2014

For anybody out there who follows the backlash against hydraulic fracturing, Maryland serves as one of the front lines of America’s energy battleground.

The state is deeply divided. Some folks in the western part of the state have threatened secession, while communities around the Chesapeake Bay rally against the expansion of the Cove Point LNG import terminal into an export terminal.

At this point, we can fully expect that Dominion Resources (NYSE: D) will be allowed to export liquefied natural gas from its facility, even with the protests seen at courthouses in Annapolis.

Dominion has been battling the fractivists over at the Sierra Club over its export terminal for a long time. Right now, a judge is deliberating on the appeal by Sierra Club, who was previously defeated in a lower court ruling.

There’s a lot more at stake as the fight continues over the balance of good jobs and environmental impacts.

To start, the Marcellus shale is completely untouched in the western region of Maryland, and once the export terminal at Cove Point gets approval, the state could start to developing its natural gas assets.

Extracting natural gas has already worked miracles in Pennsylvania, West Virginia, and Ohio, where manufacturing has seen a resurgence thanks to the glut of cheap fuel — not to mention a wealth of jobs and economic growth for small towns.

And with the likelihood that Dominion will go forward and expand Cove Point, Maryland could see a whole new wave of wealth and manufacturing in the west.

Now, I’m sure the opponents will be louder than ever to stop hydraulic fracturing and the growth that comes with it, but if the government expects Dominion to keep a decent payroll and pay its taxes, we’re going to see more natural gas drilling take place.

Just last year, Governor Martin O’Malley declared that an environmental study was needed on the method before drilling permits were allowed.

That process won’t end until this August, which could mean Maryland will start issuing those permits just as Cove Point will begin its transition into an export facility.

That isn’t to say there isn’t plenty of ammo left for environmentalists. In the northeastern region, regulators suspended drilling in Ohio after a surge in earthquakes.

But regardless of the outcome in Ohio, it’s hard to imagine the EIA denying the Cove Point LNG export application, especially considering the competition. U.S. LNG exports will come much sooner than companies like Dominion expect.  

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