Planned Expansion Stirs Fury
Monday, March 27, 2006
Washington Gas has raised objections to a plan that would double the amount of liquefied natural gas shipped into a Southern Maryland terminal each year, saying the imported fuel could damage pipe fittings and lead to an increase in leaks that would in turn endanger homes.
Officials with Dominion Cove Point, which operates the Calvert County import terminal, say that the utility's fears are baseless and that blocking the imported fuel will only exacerbate soaring energy prices.
Washington Gas has filed a protest with the Federal Energy Regulatory Commission, which must give approval to the $740 million project before construction can begin.
The utility is asking FERC not to allow expansion until Cove Point eliminates any potential for problems from the imported gas. Although the company hasn't listed specific remedies, the fixes could potentially mean millions of dollars in upgrades to the Washington Gas system, which serves 1 million customers in Maryland, the District and Northern Virginia.
The dispute also could have implications for the gas industry, which has been studying the subject of "interchangeability" -- the feeding of different natural gases, including imported liquid natural gas, into the U.S. interstate pipeline grid. Cove Point is one of four import terminals operating in the United States; the others are in Georgia, Louisiana and Massachusetts. FERC officials have said they expect at least eight new terminals to begin receiving imported gas by 2010.
Industry experts believe importing liquefied natural gas from Trinidad, Algeria and other sources could help curtail volatile price swings when domestic supplies are interrupted, as they were so dramatically in the Gulf of Mexico last hurricane season.
Cove Point expansion would help ease the market volatility, "especially in the Northeast, where prices are the highest in the nation," said Dominion spokesman Dan Donovan.
FERC, which also is evaluating the project's environmental impact, has not made a decision and has no deadline to do so, agency spokeswoman Tamara Young-Allen said.
Washington Gas blamed imported gas piped up from Cove Point for a rash of leaks in Prince George's County in the winters of 2003-04 and 2004-05. The company launched a study into the problem after a District Heights home exploded in late March last year. No one was injured in the explosion, but the study found that the imported gas had lower levels of heavier hydrocarbons than domestic supplies used elsewhere in the Washington Gas system.
Sometimes referred to as dry gas, imported gas with these subtle molecular differences was drying rubber seals of aging metal couplings that link sections of pipe, the study found.
The utility is spending $144 million to replace the couplings in a 100-square-mile area of Prince George's that receives unblended, imported gas directly from Cove Point. The utility also has begun experimenting with injecting additives into the gas to make it more like domestic supplies. The surge of leaks did not reappear this winter, company spokesman Tim Sargeant said.
But with Dominion's plans to double its liquefied natural gas imports and send the gas into other pipelines, Washington Gas officials worry the fuel could cause problems in other parts of its system, including in Montgomery County and the District, where thousands of the same style of metal couplings are in use.
The couplings were widely installed across the country between the 1940s and the 1970s.
Cove Point plans to build two 160,000-cubic-meter storage tanks and expand pipelines in Maryland and Pennsylvania. The additional fuel would serve primarily the mid-Atlantic region, but the company also plans to pipe that gas to underground storage tanks in central Pennsylvania that supply much of the Northeast and New England, Donovan said.
Dominion and the company that makes the couplings insist that gas composition isn't the problem. They say the real issue is how Washington Gas installed the couplings.
At a FERC hearing last month, Glen McMurray, president of Norton McMurray Manufacturing, said tens of millions of his company's compression fittings are in use all over the world, many in places where liquefied natural gas with lower levels of heavier hydrocarbons is used. Only one other company has reported leaks. That was in 1993, when the Long Island Lighting Co. reported a surge of leaks after switching to a drier gas imported from Canada.