By Peter Galuszka
One way to clip the wings of Russian President Vladimir Putin and his aggressive land grabs, says U.S. Sen. Mark Warner who is running for reelection, is to expedite permitting of the 20 or so proposals to export liquefied natural gas, including one by Richmond-based Dominion Resources.
“Most of Europe and Ukraine are heavily dependent on Russian gas in particular for their energy use,” Warner told reporters. Europe depends on Russia for 30 percent of its gas.
It is true that hydraulic fracking has turned the oil and gas business in the U.S. upside down by creating such a flood of products that the U.S. may not only become energy independent but in a position to export. Environmentalists point out that fracking has its dangers but the remarkable change in energy dynamics plays to the producers’ hands.
The big problems with Warner’s proposal are that exporting LNG to Europe will be more time-consuming and costly than he might imagine. It also does nothing to address the climate change issues that gas contributes to, albeit not as much as coal.
One reason why Warner may be so interested in the issue — House Speaker John Boehner, a Republican, is making exactly the same proposal — is because of Dominion. The utility plans a $3.8 billion expansion of its Cove Point, Md. LNG import facility on Chesapeake Bay so that it can export LNG as well. Some of that gas could very well come from fracking operations in the Marcellus Shale fields of Pennsylvania and West Virginia along with the Gulf Coast.
Dominion is in the permitting process – perhaps No. 3 or 4 in line – for Cove Point. It has the gear to take super cold gas pf about minus 265 degrees and warm it up to a gaseous state so it can be sent through pipelines. Now it wants equipment to reverse the process – take gas and chill it into shippable LNG. Dominion has everything else it needs – a water terminal, tanks, and so on.
Warner, of course, gets lots of campaign money from Dominion and has just brought on as his campaign manager Eva Teig Hardy, who retired as one of Dominion’s top lobbyists and public affairs executives. I have known Eva since the 1970s and can attest that she is supremely competent.
There’s nothing wrong with Warner’s ties to Dominion although they should be known. What is troublesome is that his plan may not work.
Take Dominion. If Dominion gets its permits, it won’t be able to export LNG for maybe three years. By that time Putin will either have calmed down or gone beyond Crimea to conquer Europe as far as the Czech Republic or maybe France.
Dominion already has customers lined up for its LNG and they aren’t in Europe. They are utilities in India and Japan – which are the markets of choice for many of the American export hopefuls.
And as Steve Mufson of The Washington Post points out, while Russia exports gas via pipelines to Europe, it still isn’t as big a supplier as Norway. In fact, Cove Point used to see the odd tanker full of Norwegian LNG pull up at its bay terminal. Why can’t Norway increase its sales on the Continent?
Europe would have to build more LNG import facilities and that may take a few years. Meanwhile, the global money seems to be on sending LNG to Asia.
Mufson, in a separate article, has an interesting proposal that would address what Warner does not – namely somehow linking the cornucopia of natural gas with what Virginia, the U.S. and the world really need – more renewable energy sources as well as ones that emit less carbon.
The idea is to export LNG and coal but charge a special fee. The fee, based on so many cents per British Thermal Units, would be put in an infrastructure bank that could fund such projects as coal-burning generating stations that have sophisticated carbon capture equipment.
The gear is extremely expensive but it might do the trick about reducing carbon emissions. The problem now is that utilities need regulatory approval to charge extra fees to customers for carbon capture gear. The regulators are often hampered by laws requiring them to order the utility to go with the cheapest form of energy available. If gas is cheapest, then it’s gas.
Just an idea, but Warner ought to be exploring it rather than cashing on the news of the day to boost Dominion in a rather dreamy plan.
PS: For those dear readers who are gluttons for punishment, here’s a link of me on a panel at Montgomery County Public Television in Rockville, Md., discussing Cove Point. It was taped March 7.
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