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Judge Nixes Cove Point LNG Zoning Permit as Dominion Says Will Soon Receive Federal Permit

10:50 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Co-Written with Caroline Selle

Environmental groups fighting against the Cove Point LNG export terminal hailed Salmon’s judgment as a major grassroots victory.

An August 6 court decision handed down by Calvert County Circuit Court Judge James Salmon could put Dominion Resources’ timeline for its proposed Cove Point liquefied natural gas (LNG) export facility in jeopardy.

Salmon ruled that an ordinance exempting the Lusby, Md.-based LNGproject from local zoning laws — Ordinance 46-13 — violated both a section of a state Land Use law, as well as Maryland’s constitution. The facility will be fueled by gas obtained via hydraulic fracturing (“fracking”).

In the ruling, Judge Salmon described the zoning exemption as “a very unusual situation.” In 2013, the Calvert County Board of County Commissioners and the Calvert County Planning Commission carved out both LNG export and import facilities from zoning laws.

“To my knowledge no other municipality or county in Maryland has attempted to do what the Calvert County Board of County Commissioners has attempted to do, i.e. completely exempt two uses from being covered by zoning regulations while requiring everyone else in the County to abide by those regulations,” wrote Salmon.

Environmental groups fighting against the Cove Point LNG export terminal hailed Salmon’s judgment as a major grassroots victory.

“At a minimum, this ruling will likely cause real delay in the ability of Dominion to begin major construction of this controversial $3.8 billion fossil fuel project,” Mike Tidwell, executive director of Chesapeake Climate Action Network (CCAN), said in a press release. “The ruling should certainly give pause to the Wall Street investors that Dominion is seeking to recruit to finance this expensive, risky project.”

The plaintiffs in the lawsuit, AMP Creeks Council (shorthand for Accokeek Mattawoman Piscataway Creeks Council), came to a similar conclusion.

“This is a remarkable victory for the people of Lusby, Maryland, and folks fighting fracking and LNG exports throughout the Mid-Atlantic region,” Kelly Canavan, President of AMP Creeks Council, said in a press release.

Yet, Salmon concluded the ruling out by stating his decision “has no direct bearing on whether the facility will be built or not.” And even AMP Creeks acknowledged in its press release that its legal team “is still sorting out the implications of this ruling.”

Further, Canavan told DeSmogBlog in an interview that she agrees with Salmon, at least in terms of the legal argument he put forward about his role in the final destiny of the Cove Point LNG export facility.

“Even if he wanted to, he does not have the power to determine whether or not the facility will be built,” she said. “It doesn’t mean there won’t be a ripple effect.”

So, what gives? Is the decision a game-changer or something less? Dominion certainly thinks the latter, based on a review of its quarter two earnings call transcript.

Dominion Expects Federal Permit in “next few weeks”

During his company’s quarter two earnings call held prior to Salmon handing down the Calvert County ruling, Dominion CEO Thomas Farrell II told those listening that he expects to receive a final LNG export license from the U.S. Federal Energy Regulatory Commission (FERC) in the “next few weeks.”

“We expect to receive FERC order approving the project in the next few weeks and begin construction shortly thereafter,” Farrell said on the call. “The Cove Point Liquefaction is expected to begin operations during the fourth quarter of 2017.”

Canavan believes Farrell’s rosy prospectus appears unlikely, however.

“We obviously disagree with that, partly because if it wouldn’t delay the project to have to go through these processes, there wouldn’t have been any need to pass the ordinance in the first place,” she said.

Calvert County Board, Dominion React

In the aftermath of the ruling, Dominion made a statement, appearing to stand by its quarter two investor call. “We are reviewing the decision in detail and do not see any schedule impact,” said the company in a press release.

Meanwhile, the County Board stood by its original decision to offer Dominion a zoning exemption, saying Salmon’s ruling would be discussed at its then-upcoming August 19 meeting.

“[T]he premise behind the zoning exemption remains legitimate,” said the Board in a collective statement offered to the press. “It recognizes that review and inspection of these types of highly technical, stringently regulated projects should be conducted by experienced federal and state regulators due to the rigorous standards they must meet.”

A DeSmogBlog review of meeting minutes for that date and for the upcoming August 26 meeting shows the topic was never put on the agenda, though.

Which leaves us where we started: what’s the future of the prospective Cove Point LNG terminal? Your guess is as good as ours.

Keystone XL Fork in the Road: TransCanada’s Houston Lateral Pipeline

1:49 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

Houston Refinery at night

The southern leg of the Keystone XL pipeline is scheduled to bring oil & tarsands to Houston’s refineries starting in January.

Only Barack Obama knows the fate of the northern half of TransCanada’s Keystone XL tar sands pipeline.  But in the meantime, TransCanada is preparing the southern half of the line to open forcommercial operations on January 22.

And there’s a fork in that half of the pipeline that’s largely flown under the radar: TransCanada’s Houston Lateral Pipeline, which serves as a literal fork in the road of the southern half of Keystone XL’s route to Gulf Coast refineries.

Rebranded the “Gulf Coast Pipeline” by TransCanada, the 485-mile southern halfof Keystone XL brings a blend of Alberta’s tar sands crude, along with oil obtained via hydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale basin, to refineries in Port Arthur, Texas. This area has been coined a “sacrifice zone” by investigative journalist Ted Genoways, describing the impacts on local communities as the tar sands crude is refined mainly for export markets.

But not all tar sands and fracked oil roads lead to Port Arthur. That’s where the Houston Lateral comes into play. A pipeline oriented westward from Liberty County, TX rather than eastward to Port Arthur, Houston Lateral ushers crude oil to Houston’s refinery row.

“The 48-mile (77-kilometre) Houston Lateral Project is an additional project under development to transport oil to refineries in the Houston, TX marketplace,” TransCanada’s website explains. “Upon completion, the Gulf Coast Project and the Houston Lateral Project will become an integrated component of the Keystone Pipeline System.”

Boon for Houston’s Refinery Row

Houston’s LyondellBasell refinery is retooling itself for the looming feast of tar sands crude and fracked oil bounty that awaits from the Houston Lateral’s completion.

“The company is spending $50 million to nearly triple its capacity to run heavy Canadian crude at the Houston refinery, to 175,000 bpd from 60,000 bpd,”explained a March article in Reuters.

LyondellBasell admits TransCanada’s Houston Lateral project is a lifeline ensuring its Houston refinery remains a profitable asset.

“Over time, heavy Canadian oil is going to be extremely important to this refinery,” the company’s spokesman David Harpole said in a February interview with Bloomberg. “It’s not all getting down there today but as time goes on, that will become more and more powerful to an asset like we have.”

But LyondellBasell’s not the only company with skin in the game. Valero — whose refining capacity is currently overflowing with fracked Eagle Ford shale oil — is also considering expanding its capacity to refine more tar sands crude.

Not “What If,” But “Right Now”

A financially lucrative asset to refining companies like LyondellBasell and Valero, Houston’s refineries are an issue of life or death for those living within the vicinity.

“In a December 2010 report, the Sierra Club linked tar sands refinery emissions to prenatal brain damage, asthma and emphysema,” a March Huffington Post article explained. “A recent Houston-area study found a 56 percent increased risk of acute lymphocytic leukemia among children living within two miles of the Houston Ship Channel, compared with children living more than 10 miles from the channel.”

Like Port Arthur, Houston — the headquarters for some of the biggest oil and gas companies in the world — is a major “sacrifice zone” for front-line communities, with many people suffering health impacts from the city’s four petrochemical refineries.

“Much of the debate around the Keystone XL pipeline has focused on the dangers of extracting and transporting the tar sands,” DeSmogBlog contributor Caroline Selle wrote in a May 2013 article. “Left out, however, are those in the United States who are guaranteed to feel the impacts of increased tar sands usage. Spill or no spill, anyone living near a tar sands refinery will bear the burden of the refining process.”

With Keystone XL’s southern half currently being injected with oil and with TransCanada counting down the weeks until it opens for commercial operations, those living in front-line refinery neighborhoods face a daunting “survival of the fittest” task ahead.

“With toxic chemical exposure nearly certain, it is unclear what the next step will be for residents [living in refinery neighborhoods],” Selle wrote in her May article. “[T]his is a life or death struggle more immediate than the ‘what-if’ of a pipeline spill. And it’s not a ‘what-if, [but rather] the fight is ‘right now.’”

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