Environmentalists fighting the Keystone XL pipeline are rallying to block a Maryland natural gas export terminal as momentum builds to use the U.S. fuel as a weapon against Russia’s intervention in Ukraine.
The energy required to liquefy and ship gas at Dominion Resources Inc.’s proposed Cove Point terminal in Maryland will raise the fuel’s greenhouse-gas emissions to the level of coal, says Mike Tidwell, director of the Chesapeake Climate Action Network. Such terminals threaten the climate like pipelines tied to developing oil in Alberta, such as Keystone, he said.
“This issue is a lot like the fight over tar sands,” Tidwell said in an interview. “It’s gone from non-existent to the biggest environmental fight in Maryland, and is on its way to being the biggest environmental fight in the Mid-Atlantic.”
Comparing Cove Point to the $5.4 billion pipeline project that’s fueled stiff environmentalist opposition shows a challenge advocates face in pushing to use gas, America’s newfound energy bounty, as a geopolitical tool. The export terminals are a “whole new category of fossil fuel trouble,” Bill McKibben, co-founder of the environmental group 350.org, said on a conference call with reporters today.
House Republicans introduced legislation to speed approval of applications for more than 20 terminals like Cove Point, in response to Russia’s actions. Russia, the second-largest global producer of natural gas after the U.S., twice since 2006 has cut supplies to Ukraine, a conduit for energy to Europe.
Russian President Vladimir Putin called today for Russia to absorb Crimea, where voters overwhelmingly backed secession, after signing a draft treaty to take the Ukrainian peninsula. He said Russia wasn’t interested in annexing other parts of the former Soviet republic.
Dominion said a study it commissioned by ICF International Inc. found that liquefied natural gas exports would cut greenhouse gas emissions if the fuel replaces coal as a way to make electricity.
“Slowing or preventing natural gas exports from the United States is a step in exactly the wrong direction for those who are concerned about climate change,” said Pamela F. Faggert, Dominion’s chief environmental officer and vice president- Corporate Compliance.
Chesapeake Climate Action Network, 350.org, the Sierra Club and 13 other environmental groups said today in a letter to President Barack Obama that the U.S. should conduct a more complete environmental assessment of Cove Point than planned.
Exporting natural gas “would lock in place infrastructure and economic dynamics that will make it almost impossible for the world to avoid catastrophic climate change,” according to the letter.
Tidwell says approving terminals won’t alter the situation in Ukraine because the facilities will take years to build.
The U.S. allows exports to nations with free trade pacts. The Energy Department conducts a more exhaustive market analysis for proposals to export to nations without those deals.
That list includes all 28 nations in the European Union. Russia provides 30 percent of Europe’s gas needs using pipelines that cross Ukraine. Export advocates said the U.S.’s growing energy resources can reduce its allies’ reliance on Russian oil and gas.
Some businesses also oppose to the export push. Dow Chemical Co. leads a coalition fighting overseas sales, saying exports might increase costs for an important ingredient for its products in the U.S.
A group of four refiners are bucking the oil industry’s campaign to remove restrictions on crude oil exports, with the U.S. forecast set to overtake Saudi Arabia as the main producer by 2015 by the International Energy Agency.
Monroe Energy LLC in Trainer, Pennsylvania, PBF Energy Inc., in Parsippany, New Jersey, Alon USA Energy Inc., in Dallas and Philadelphia Energy Solutions in Philadelphia formed the Consumers and Refiners United for Domestic Energy Coalition this month to lobby against removing export restrictions on oil.
Jeffrey Peck, a Washington lobbyist for the coalition, said lifting the restrictions will raise gasoline prices for Americans and keep the U.S. “overly dependent on imported crude oil.”
Advocates say exports won’t raise domestic costs because global markets set the price. More exports will encourage producers to keep drilling.
Senator Rand Paul, a Kentucky Republican, said in a March 10 interview on Fox News that the U.S. should lift oil and gas export restrictions.
“Russia has a difficult time making a profit if oil goes below $90 a barrel,” Paul said. “So, yes, part of our energy policy ought to be producing enough that Russia can’t dictate to Europe and that Europe is not beholden to Russia.”
Peck said the situation in Ukraine underscores the importance of energy security, and that the U.S. should be protective of its own by limiting exports.
The oil and gas industry has sought to export more of the U.S. bounty as supplies rise because hydraulic fracturing and horizontal drilling are unlocking stores previously uneconomic to procure.
Advances in drilling techniques, including hydraulic fracturing or fracking, have boosted U.S. production of natural gas by 35 percent from a decade-low 18 trillion cubic feet in 2005, according to the Energy Information Administration.
The Energy Department has approved six applications for export projects that would process 9.07 billion cubic feet of liquefied natural gas a day. It’s weighing 24 applications for projects to handle more than 31 billion cubic feet. The U.S. produces an average of 69 billion cubic feet of gas a day.
The rise in natural gas production has led to an increase in the use of the fuel to generate electricity. That has helped lower U.S. greenhouse-gas emissions, because burning natural gas releases about half the carbon dioxide as coal.
Tidwell says the climate benefits are lost when emissions to transport the fuel overseas and from the energy it takes to cool the gas to a liquid are considered.
Environmental groups oppose Keystone because it would carry fuel from Alberta’s oil sands, and producing and using the Canadian crude releases more carbon than other forms of oil.
Only one export facility, Cheniere Energy Inc.’s $10 billion Sabine Pass terminal in Cameron Parish, Louisiana, has the required approvals from the Energy Department and U.S. Federal Energy Regulatory Commission. Shipments are scheduled to start in late 2015, according to the company.
Representative Cory Gardner, a Colorado Republican, introduced legislation to require the Energy Department to approve all pending gas export projects. The projects would still need to clear federal environmental and safety reviews.
Energy and Commerce Committee Chairman Fred Upton, a Michigan Republican, said in a statement that passing the bill could help “supplant” Russia’s influence on the region.
The House Energy and Commerce Committee’s energy and power subcommittee plans to hold a hearing March 25 on a Gardner’s bill.
Democratic Senator Edward Markey of Massachusetts, who opposes the push to expedite exports, introduced legislation this month requiring the Energy Department to consider several factors before approving export terminals.
The Energy Department must review proposals to ship to countries lacking a free-trade agreement with the U.S.
The U.S. Federal Energy Regulatory Commission, which is responsible for weighing the safety and environmental risks associated with the export facilities, said last week that it will determine by Aug. 13 whether to approve Dominion’s plans for its Cove Point terminal.
Cove Point, about 60 miles southeast of Washington, would deliver fuel to Japan and India, according to data from Poten & Partners Inc., a New York-based ship broker.
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