India to get US gas after regulator approves Cove Point LNG scheme

US regulators gave the nod this week to a controversial, $3.8bn liquified natural gas (LNG) export facility on the Maryland coast that will ship millions of tons of fuel to Japan and India.

The scheme is only the fourth LNG scheme so far to get approval from the Federal Energy Regulatory Commission (FERC), but another 14 are pending as the US gears up to start exporting vast quantities of gas recovered by hydraulic fracturing, or fracking.

The decision came on Monday ahead of Indian Prime Minister Narendra Modi’s meeting with President Barack Obama in Washington DC.

The Press Trust of India reports that India’s state-owned gas utility GAIL India Ltd has already booked 40% of the 5.75 million metric tons of LNG the facility will process and ship every year.

The company behind the LNG plant is is Dominion Resources, which says the plant will cost between $3.4bn and $3.8bn to build. 

Its scheme at Cove Point, on Chesapeake Bay, is opposed by environmental and conservation groups who are concerned about local habitats, and who oppose fracking in general.

The Sierra Club said FERC’s approval would fuel the expansion of fracking, and called it a win for "dirty polluters".

"FERC’s decision to allow LNG exports from Cove Point is fundamentally flawed because the agency failed to consider the simple fact that exporting LNG will mean more drilling and fracking, and that means more climate pollution, more risk of contaminated groundwater, and more threats to the health of people who live near gas wells," said Deb Nardone, director of the Sierra Club’s Beyond Natural Gas campaign.

FERC said its decision came after more than two years of consideration during which the regulator heard from more than 140 speakers at three public meetings. FERC said it received more than 650 comments from the public and federal, state and local agencies on the application.

Dominion Resources applauded the move and said it accepted the 79 environmental conditions the regulator specified. "The FERC’s review of this project was exhaustive, complete, and reflects consideration of thousands of comments. We thank the FERC for its thoroughness," said Diane Leopold, president of Dominion Energy.

"We are looking forward to starting construction in the very near future, building the terminal with the public’s safety first and foremost in our mind, so that we can bring the economic benefits both locally and to our customers," Leopold said.

The plant is scheduled to start shipping LNG in 2017.

News agency Reuters commented that the Cove Point site, approximately one hour’s drive southeast of Washington DC, currently has four large storage tanks and a pier built in the 1970s to import LNG from Algeria, showing just how the global energy market dynamics have changed.

In the last decade the US has become the world’s top natural gas producer thanks to fracking, but has yet to export it in any quantity.

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