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, including 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.
William Frohnhoefer, a New York-based analyst for BTIG LLC, said Ukraine might send a signal to Russia by entering into a contract to get gas from the U.S. in the next year or two.
Ukraine “does not need to replace all of their Russian gas tomorrow,” to show there are economic consequences to Russia’s actions, he said in an e-mail.
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.
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