Press Release

April 24, 2007

WASHINGTON – U.S. Senators Benjamin L. Cardin and Barbara A. Mikulski have introduced legislation to give state and local governments the right to veto the location of Liquified Natural Gas (LNG) terminals. The measure would strike a provision in the
Energy Policy Act of 2005 that gave the Federal Regulatory Energy Commission (FERC) power to preempt state and local concerns about the location, construction and operation of LNG facilities.

“In recent years, the LNG industry has proposed building dozens of new LNG terminals throughout the United States,” said Senator Cardin. “Many of these terminals – including the proposed terminal at Sparrows Point – are being planned near populated areas or in environmentally sensitive areas. As a highly hazardous and combustible fuel source, LNG poses serious safety concerns to local communities from potential accidents, as well as terrorism risks. I am determined that state and local governments have a say in determining the location of future LNG facilities.”

“I am deeply concerned for the safety of communities surrounding LNG sites and the potential environmental impact of these facilities. A recent GAO report has given us even more evidence that approving LNG plants – like the proposed Sparrows Point site in Baltimore – is unsafe and unwise. Yet, federal agencies are all too quick to rubberstamp these facilities,” said Senator Mikulski. “State and local governments must be allowed to have their voices heard.”

In Maryland, which is already home to one of six operating LNG terminals in the United States, AES Sparrows Point LNG, LLC and Mid-Atlantic Express, LLC has proposed building a new terminal near a densely-populated area of Baltimore. The Maryland Congressional Delegation, Gov. Martin O'Malley, Baltimore County Executive Jim Smith and other local officials and community leaders have opposed this location because of unacceptable risks to public safety, the economy and environment.

Richard Clarke, a former Bush-Administration Counter Terrorism official, has said that LNG terminals and tankers present “especially attractive targets” to terrorists. Experts have identified a number of potentially catastrophic events that could arise from an LNG release, including pool fires – an extremely intense fire that cannot be extinguished and can spread over considerable distance, flammable vapor clouds that may drift some distance from the spill site, and flameless explosions.

Under current law, FERC now has exclusive authority to approve onshore LNG terminal location applications. While the law requires FERC to consult with State and local governments regarding safety concerns, they have no role in the final decision. Moreover, while the law permits states to conduct safety inspections of LNG terminals, they do not have the authority to require any safety precautions or to take enforcement actions if they discover problems at a facility during a safety inspection.

This measure would give states the same veto powers for onshore LNG terminal proposals as they currently exercise for offshore terminal proposals under the
Deepwater Port Act.