On January 15, 2009, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) approved the Sparrows Point Project in Baltimore County, Maryland despite objections from Commissioner Jon Wellinghoff. The project includes a liquefied natural gas (“LNG”) terminal that will have a send-out capacity of 1.5 billion cubic feet per day and 88 miles of newly constructed natural gas pipeline.

The long process to approve the project began in April 2006 when AES Sparrows Point LNG, LLC (“AES”) and Mid-Atlantic Express, LLC (“Mid-Atlantic”) initiated the pre-filling process with the Commission. On January 8, 2007, AES filed an application for the new LNG terminal on Chesapeake Bay while Mid-Atlantic simultaneously filed an application for the new pipeline with the Commission.

After the initial filings, the parties responded to comments filed at FERC, conditions outlined in a preliminary Environmental Impact Statement, and concerns raised at eight different public meetings. State officials also tried to stop the project by changing local zoning ordinances on two separate occasions, but both of these efforts were blocked by the courts.

Despite the opposition, the Commission approved the projects by a vote of 4-1 largely because of the 169 mitigation measures that AES and Mid-Atlantic must implement before they can begin construction. The majority also noted in their decision that they adopted mitigation measures proposed by AES and Mid-Atlantic as well as all recommendations from FERC staff. These measures would focus on protecting wetlands and aquatic resources, increasing safety measures, and coordinating an emergency response plan with state and local agencies and municipalities.

Wellinghoff cited three different reasons why he felt the project’s benefits did not outweigh its associated burdens. First, he stated that the project is not needed to meet the region’s energy demands, citing reports that predict decreasing consumption of natural gas and fewer countries willing to export LNG. Second, Wellinghoff argued that other sources of energy, such as domestic gas and renewable resources should be used to meet the region’s energy demands. Finally, Wellinghoff thought the environmental impacts of 3.7 million cubic yards of contaminated sediment needed to dig a channel for LNG tankers were too costly to justify the project.

A copy of the Commission’s order is available at: http://ferc.gov/whats-new/comm-meet/2009/011509/C-1.pdf