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35–913 PDF 2007

SAFETY AND SECURITY OF LIQUIFIED

NATURAL GAS TERMINALS AND

THEIR IMPACT ON PORT OPERATIONS

(110–31)

FIELD HEARING

BEFORE THE

SUBCOMMITTEE ON 

COAST GUARD AND MARITIME TRANSPORTATION

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

APRIL 23, 2007 (Baltimore, MD)

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

RICHARD H. BAKER, Louisiana 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

(II)

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION 

ELIJAH E. CUMMINGS, Maryland, Chairman 

GENE TAYLOR, Mississippi 

RICK LARSEN, Washington 

CORRINE BROWN, Florida 

BRIAN HIGGINS, New York 

BRIAN BAIRD, Washington 

TIMOTHY H. BISHOP, New York 

VACANCY 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

STEVEN C. LATOURETTE, Ohio 

DON YOUNG, Alaska 

HOWARD COBLE, North Carolina 

WAYNE T. GILCHREST, Maryland 

FRANK A. LOBIONDO, New Jersey 

TED POE, Texas 

JOHN L. MICA, Florida 

(Ex Officio) 

(III)

(V)

CONTENTS Page

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Beazley, Sharon ....................................................................................................... 54

Brooks, Dunbar, Chairman, Turner Station Development Corporation ............. 54

Doyle, William P., Deputy General Counsel, Marine Engineers’ Beneficial 

Association ............................................................................................................ 54

Hoffmann, Richard, Director, Gas, Environment, and Engineering, Federal 

Energy Regulatory Commission .......................................................................... 26

Kelley, Captain Brian D., United States Coast Guard, Baltimore Sector .......... 26

Mikulski, Hon. Barbara, U.S. Senator, Maryland ................................................ 5

O’Malley, Hon. Martin, Governor, Maryland ........................................................ 5

Salerno, Rear Admiral Brian, Director of Inspection and Compliance, U.S. 

Coast Guard .......................................................................................................... 26

Samson, Aaron, Managing Director, AES ............................................................. 54

Smith, Jr., James T., County Executive, Baltimore County, Maryland .............. 5

PREPARED STATEMENT SUBMITTED BY A MEMBER OF CONGRESS 

Mikulski, Senator Barbara A., of Maryland .......................................................... 76

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Brooks, Dunbar ........................................................................................................ 79

Doyle, William P. ..................................................................................................... 83

Hoffman, Richard R. ................................................................................................ 95

O’Malley, Hon. Martin ............................................................................................. 129

Smith Jr., James T. ................................................................................................. 136

Salerno, RDML Brian .............................................................................................. 140

Samson, Aaron Teal ................................................................................................ 149

ADDITIONS TO THE RECORD 

Baltimore Building and Construction Trades Council, Rod Easter, President, 

written statement ................................................................................................. 161

LNG Opposition Team, Russell S. Donnelly, Environmental Coordinator, written statement ....................................................................................................... 164

LNG Opposition Team, Comments Requesting Denial of Permit of AES Sparrows Point LNG, LLC and Mid-Atlantic Expres, LLC, packet ......................... 165

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35913.003
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35913.007
(1)

HEARING ON SAFETY AND SECURITY OF 

LIQUIFIED NATURAL GAS AND THE IMPACT 

ON PORT OPERATIONS 

Monday, April 23, 2007

HOUSE OF REPRESENTATIVES

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

SUBCOMMITTEE ON COAST GUARD AND MARITIME

TRANSPORTATION

Baltimore, MD. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in the 

Ceremonial Courtroom, University of Maryland School of Law, 500 

West Baltimore Street, Baltimore, Maryland, Hon. Elijah E. 

Cummings [Chairman of the Subcommittee] presiding. 

Present: Representatives Cummings, LaTourette and Gilchrest. 

Also Present: Representative Ruppersberger and Sarbanes. 

Mr. CUMMINGS. Good morning, everyone. This hearing is called 

to order. 

Before we begin, I just want to recognize that we lost—Congress 

lost a giant in our midst. She served on the Transportation Committee, Ms. Juanita Millender-McDonald from California passed 

away yesterday after suffering from cancer. And, Mr. LaTourette 

and I knew her very well. As a matter of fact, she came into Congress with me, I mean, she came in three weeks before I did, and 

so we were, I think, some of the few folk that came in 1996, because we came in special elections. We will miss her, and I just 

thought it would be appropriate that we start off this hearing by 

recognizing this truly, truly great lady. 

Before we begin, I ask unanimous consent that Congressman 

Ruppersberger and Congressman Sarbanes may join the Subcommittee today and participate in this hearing, and without objection it is so ordered. 

What we are going to do today, to the Committee Members, for 

the Committee Members, is I will make an opening statement and 

Mr. LaTourette will make an opening statement. Then we will be 

going to Senator Mikulski. However, if the Governor arrives by 

that time, then we’ll hear from the Governor, and then, of course, 

we’ll go to County Executive Smith. It’s my understanding that the 

Governor has some time constraints, and so that’s why we want to 

proceed in that manner. 

It’s a privilege to convene the Subcommittee on the Coast Guard 

and Maritime Transportation today here in Baltimore, in the 7th 

Congressional District of Maryland, which it is my honor to represent. 

2

I also thank Dean Rothenburg of the University for hosting us 

here at the University of Maryland Law School, and I see that 

President Ramsey is also here of the University of Maryland. 

Thank you both for being here, and thank you for opening the 

doors to this great law school, which so happens to be the law 

school that I graduated from. 

I also welcome the Subcommittee Members to Baltimore, and I 

especially thank the Ranking Member, Mr. LaTourette, for joining 

us today. Mr. LaTourette is from Ohio. 

I also welcome Congressman Ruppersberger and Congressman 

Sarbanes, who I just saw about to enter the room, who will sit with 

the Subcommittee, and Senator Mikulski, Governor O’Malley, and 

County Executive Jim Smith, who will testify before the Subcommittee as we consider a matter of deep concern to Baltimore 

and, indeed, to the State of Maryland, and, indeed, to the Nation, 

the safety and security of LNG terminals, including the proposed 

LNG development at Sparrows Point. 

This hearing is the first of two hearings that the Subcommittee 

will hold to examine proposed growth in LNG terminal sitings, and 

their impact on the safety and security of neighboring communities 

on port operations and on the operating capacity of the United 

States Coast Guard. 

Today’s hearing will be followed by a hearing on the proposed 

Broadwater Terminal in Long Island Sound on May 7th, up in New 

York. 

While these hearings will examine two specific LNG projects, the 

hearings, indeed, have national implications. The United States is 

taking momentous steps with our decision to begin siting additional LNG terminals. 

Aside from the consequences that expanded reliance on energy 

imports bring, we need to be sure that we are not rushing ahead 

with the construction of LNG facilities which constitute obvious 

terror risk before all the elements are in place to ensure the security and safety of the communities into which these unwanted 

neighbors move. 

Let me begin with a brief explanation of what Liquid Natural 

Gas, called LNG, is. LNG is natural gas that has been super cooled 

to become a liquid. Natural gas carried on ships is transported in 

this liquid form. Because LNG is so cold, everything else around 

it is, by definition, much hotter than it is. When LNG hits the air 

or water, it becomes a vapor heavier than air. If it finds a source 

of ignition it will burn and it can even burn on water in a phenomenon known as pool fire. There are only five on-shore LNG import facilities in operation in the United States at the present time. 

The Energy Information Administration reports that imported 

LNG accounts for only 2 percent of natural gas currently used in 

the United States. However, there has been a steep rise in applications for new LNG terminal permits, responding both to increased 

demand for and higher prices of natural gas and to changes made 

in Federal regulations in 2005 by the Bush Administration and Republican-controlled Congress to ease LNG terminal sitings, in part 

by preempting the efforts of state and local governments to regulate these sitings. 

3

There are now some 40 new projects that are in various stages 

of the process of applying for construction and operating permits. 

By the end of 2006, 12 projects had been approved for construction. 

The Energy Information Administration now estimates that by the 

year 2030 imported LNG could account for as much as 20 percent 

of all natural gas consumed in the United States. 

The willingness of the Federal Energy Regulatory Commission, 

also known as FERC, to consider sitings in populated areas like 

Baltimore, is of deep concern to me, because an attack on such a 

facility could produce terrible consequences. 

As I’ve already mentioned, LNG that leaks into the air can create a vapor cloud. If ignited, it will feed a fire that can burn so hot 

it may emit thermal radiation that could burn even those who are 

not directly in the fire. There is simply no reason to place these facilities in any location that could expose nearby residents to such 

risk. 

A key link in the safety net that we must build around LNG terminals is the United States Coast Guard, which conducts waterway 

suitability assessments as part of the evaluation of new terminal 

projects. It is imperative that thee assessments evaluate projects 

against a worse case scenario. As unlikely as such scenarios may 

be, before September 11, 2001 the terrible events we watched unfold on that day were considered impossible. 

Let me also clear that I believe that state and local governments 

must, must be key players in all aspects of the assessment of the 

proposed LNG terminal projects, including the conduct of waterway 

suitability assessments. 

Once terminals are built, the Coast Guard ensures security and 

safety in the ports in which the terminals are located and provides 

security escorts to LNG tanker ships. In fact, the security of the 

tankers is just as important as the security of the terminals, because they are floating targets. They bring risks near every community they pass. 

Our Subcommittee, which oversees all aspects of the Coast 

Guard operations, is deeply concerned that an increase in the number of LNG terminals will stretch a Coast Guard already strained 

by the new homeland security responsibilities it assumed after 9/

11, as well as by the need to continue its traditional missions of 

search and rescue and environmental protection. 

The Coast Guard, ladies and gentlemen, is our thin blue line at 

sea. It is our Subcommittee’s job to ensure it is an unbreakable 

line, because it is all that stands between our homeland and the 

risks that all maritime operations, including LNG shipping, can 

bring to it. 

Before we commit the Coast Guard to providing the resources 

needed to ensure the security and safety of the new LNG operations, we need to know what we are making commitments to with 

regard to the Coast Guard, and whether they can keep those commitments. 

And, with that, I recognize my Ranking Member, the distinguished gentleman from the great State of Ohio, who has just been 

a real partner in making sure that we have bipartisan efforts in 

our Subcommittee and in our overall Committee, Mr. LaTourette. 

4

Mr. LATOURETTE. Mr. Chairman, thank you very much, and I appreciate the invitation to be here in your hometown. When I accepted the invitation, I didn’t know we were also coming to your 

alma mater, so I appreciate that as well, and my thanks to the 

University of Maryland. When I went to law school, the room 

wasn’t as nice, this is a very nice room. 

Mr. CUMMINGS. Well, when I went to law school it wasn’t this 

nice either. 

Mr. LATOURETTE. I appreciate this hearing to review the safety 

and security of Liquified Natural Gas transportation and reception 

facilities. I want to echo your remarks, first of all, about Congresswoman Juanita Millender-McDonald, elected in a special election in 

1996. She was my seat mate for ten years, most recently served as 

the Chairman of the House Administration Committee, known as 

the Mayor of Capitol Hill. There wasn’t a finer Member of Congress 

or human being that I’ve run across in my tenure, and I know all 

of our thoughts are with her husband Jim and their children and 

grandchildren today. She will be truly, truly missed. 

I also want to welcome Wayne Gilchrest, seated to my left, the 

Congressman who represents the Eastern Shore of Maryland, and 

thank him for coming to today’s hearing. I knew this was an important hearing when we have Senator Mikulski, and the Governor, 

and the County Executive, and Congressman Sarbanes, and Congressman Ruppersberger, that really makes it an important hearing, and so I appreciate that very much. 

Natural gas accounts for nearly one quarter of the energy that’s 

consumed in the United States, and a safe and abundant supply is 

vital to our future energy needs and to support our national economy. As the United States looks to strategies to diversify and expand energy resources, natural gas is a promising alternative fuel 

source that burns cleanly and produces fewer pollutants, is easy to 

transport, and has a variety of uses. In the past, the United States 

has been able to meet natural gas demands with domestically produced sources. However, as natural gas consumption is increased, 

we are now forced to look to international sources to meet domestic 

demands. 

As a result, the Government has recently received numerous applications for the approval of proposed LNG terminals and storage 

facilities located both on shore and in U.S. waters. The Federal Energy Regulatory Commission, FERC, is required to review each proposal, including the safety and security efforts and effects that a 

proposed facility may have on a local area. The Coast Guard is required to review the effects that a proposed facility may have on 

maritime transportation in and out of the port, as well as safety 

and security concerns that may arise in the maritime environment. 

LNG shippers and the natural gas industry have made significant improvements in the safety and security of tank vessels, reception facilities, storage tanks, and LNG pipelines. However, safety and security must be the Government’s top-most concern when 

reviewing applications for new LNG projects. 

I look forward to hearing the testimony from today’s witnesses 

regarding the efforts that the Government and industry have made 

to enhance safety and security through each step of the process. I 

also look forward to hearing more about the specific plans and conVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
5

cerns regarding the facility that is proposed to be built in the Port 

of Baltimore. 

Mr. Chairman, again, thank you for the invitation and your 

warm welcome, and I look forward to the hearing. 

Mr. CUMMINGS. Thank you very much, Mr. LaTourette. 

To the Members, to Mr. Sarbanes, what we have decided to do 

was to, because the Governor has certain restraints, time restraints, we want to hear from the Governor, then we will hear 

from Ms. Mikulski, Senator Mikulski, and Jim Smith, County Executive Jim Smith, and then what we’ll do is, any opening statements we might have will be a part of the question and answer period. We are extending the question and answer period for seven—

from five to seven minutes. Normally, it’s five minutes, we’ll do 

seven. 

We are very pleased to have the Governor of the great State of 

Maryland here with us, and thank you, Mr. Governor, and, Governor O’Malley. 

STATEMENT OF THE HONORABLE MARTIN O’MALLEY, GOVERNOR, MARYLAND; THE HONORABLE BARBARA MIKULSKI, 

U.S. SENATOR, MARYLAND; JAMES T. SMITH, JR., COUNTY 

EXECUTIVE, BALTIMORE COUNTY, MARYLAND 

Governor O’MALLEY. Mr. Chairman, it sounds so good to be able 

to call you Mr. Chairman. 

Mr. CUMMINGS. It sounds so good to call you Governor. 

Governor O’MALLEY. Ranking Member LaTourette and Members 

of the Committee, I appreciate the opportunity to appear before 

you, and on behalf of the citizens of Maryland, with our Senior 

Senator, Senator Mikulski, and my colleague in Government, County Executive Jim Smith. 

We really appreciate the Committee’s visiting Maryland to discuss this issue, FERC’s decision to allow a Liquified Natural Gas 

facility at Sparrows Point is of critical concern to everyone in our 

State. 

I wanted to begin by just making a couple of comments about the 

importance of the Port of Baltimore. It is a major source of revenues in Maryland. The Port is responsible for $2.4 billion in personal wage and salary income. The Port generated $1.9 billion in 

business revenues in 2005, local purchases amounted to $1.1 billion. There are some 128,000 jobs that depend on the Port, and I 

understand that today’s discussion is focused on matters of concern 

to this Committee, and I wanted to limit my comments to those 

issues, namely, safety, security and the impact on port operations. 

I first want to say a couple words about remote siting. Remote 

siting of an LNG facility is required by FERC regulations in order 

to protect as many people as possible. Our interpretation of ‘‘remote siting’’ is just what it says, namely, that LNG terminals 

should be located as far removed as possible from populated areas 

and prohibited in densely populated areas. And, AES’ proposal, as 

drafted, fails this essential public safety requirement. 

When it comes to emergency evacuations, the proposed Sparrows 

Point project is actually on a peninsula, with minimal access to 

evacuate the public or accommodate emergency respondents in the 

6

event of an accident. There are a number of schools and religious 

establishments located in the area. 

The project will also be located about one mile from the second 

largest blast furnace in the United States, as well as very near an 

ethanol production facility, both of these would be potential ignition sources that increase the risk of an accidental explosion or 

flash fire. 

When it comes to ship navigation and safety, there is an 800-foot 

wide dredge channel from the Bay Bridge to the proposed LNG terminal. All LNG facilities in this channel would need a 1,500 foot 

moving security zone, which would severely impede the shipping 

traffic for the Port of Baltimore. In other words, the proposed LNG 

terminal and the associated delays that that would cause to other 

traffic would give port customers one more reason, our geography 

now being a bit of a disadvantage rather than an advantage, it 

would give them one more reason not to come to Baltimore. 

The fast track FERC process requires a very quick review of this 

extremely complex project, thereby limiting Maryland’s ability to 

adequately study the proposal. Additionally, I understand the U.S. 

Coast Guard has yet to submit its required waterway suitability report for our review. 

Beyond the safety and security aspects, let me just wrap up with 

a couple thoughts about how this would detrimentally impact operations at the Port of Baltimore. 

In order to remain competitive, the Port of Baltimore must expand its terminal in the coming years, and the Sparrows Point Peninsula is the last under-utilized property of its size in the Baltimore Harbor. It is a perfect match for the land-side needs of an expanding port. AES needs to explain how the proposed LNG facility 

could impact Maryland’s hope to grow demand for terminal services. 

Secondly, AES’ proposal would require the dredging of 4 million 

cubic yards of material and process it on site. But, given the high 

cost of processing dredge material and the limited on-site space, 

this plan does not appear viable. In the event that this processing 

plant fails, the Port Authority has no additional capacity to accommodate this additional dredge material. 

And additionally, as Maryland works to preserve its critical deep 

water channels, there is a need for another dredge material containment facility by 2013. Sparrows Point is the only site available 

that can meet the 2013 deadline. 

Finally, the residents of Sparrows Point have historically been 

forced to shoulder disproportionate burden of environmental and 

health impacts that come from the heavy industries that historically have been located at Sparrows Point. This would be unfair 

and unjust for us to allow AES’ proposal to continue that sad and 

unfair history. 

So, in closing, I want to thank the Committee for allowing me 

to be with you. I really appreciate, Mr. Chairman, your accommodation of my scheduling issues, and while Congress has given the 

Commission authority to make these decisions, I sincerely believe 

that it would contravene, not only sound public policy, but also 

public safety and security concerns, especially in this age, for the 

7

Commission to ignore the impact on communities, transportation 

system, and commerce. 

Thank you very, very much for your time. 

Mr. CUMMINGS. Thank you very much. 

Ms. Mikulski, Senator Mikulski, I’m sorry. 

Senator MIKULSKI. Thank you very much, Mr. Chairman, and 

Ranking Member LaTourette. We want to really thank you for 

holding this hearing, and, Chairman Cummings, for your leadership in this area. 

As the Chair of the Subcommittee on Coast Guard and Maritime 

Transportation, you play a crucial national role at this time, when 

we fight the global war against terrorism, and have to also protect 

our people against possible disasters in their own community, and 

also you play a very important local responsibility, because of the 

important role the Coast Guard plays to our community. 

I’m going to be very clear as we testify today. I am absolutely opposed to a new LNG facility at Sparrows Point. I oppose this because of my fears and because of my frustrations. I worry about a 

terrorist attack. I worry about an accident with ghoulish consequences. This is a national security issue and a community security issue. 

Mr. Chairman, I’m on the Intelligence Committee. I know my colleague, Mr. Ruppersberger, is on the House. Every day we are 

briefed on those who have predatory intent against the United 

States of America. I know that terrorists to our country are real. 

Attacks to our country are real. They are plotting to kill us every 

single day, and they are looking for targets. 

I’m also on the Homeland Security Appropriations Committee, 

and I know that our ports and our vital infrastructure are highrisk, high-target targets. These right now are targets of choice, but 

why should we allow them to become targets of opportunity. 

I know that the United States Coast Guard is stretched very 

thin. Their motto is semper paratus, meaning always prepared, but 

not the way they are funded now. It’s not that they aren’t up for 

the job, but their wallet is as thin as they are stretched. 

So, I worry about an LNG facility coming in to a densely populated area. I wonder who is going to guard it, and I wonder about 

what would happen in the event of an attack, and also an accident. 

Mr. Chairman, I’m not new to this. I raised this issue when there 

were concerns about building an LNG facility at Cove Point, three 

miles down from a nuclear reactor, and at the same time we’ve 

asked for a variety of reports, there is a GAO report which I commend to you and the Committee’s attention, called ‘‘Maritime Security: Public Safety Consequences of a Terrorist Attack on a Tanker 

Carrying LNG.’’ Right here, it’s GAO report 07316. I would commend your attention to something called page five. This isn’t Senator Mikulski talking, this is GAO after an extensive investigation. 

What do they say would happen if there is an attack? What would 

they say if it’s an accident? What do we say if there is a leak? Well, 

I’ll tell you what they say, individuals who would come in contact 

with leaking LNG would experience freeze burns, and as the liquid 

warms and churns into natural gas it forms a fog-like vapor cloud. 

Can you a vapor cloud coming out of Sparrows Point? And, at the 

same time, that as the liquid warms and becomes a vapor cloud, 

8

as it travels, it just won’t stink, it just won’t be explosive, it could 

cause asphyxiation. So, that means as the cloud moves it sucks oxygen out of the air, and all who would be subjected to it would die 

because they would suffocate. 

Well, Mr. Chairman, do we want that in Dundalk? Do we want 

that in Turners Station? We know the history of Dundalk and 

Turners Station. If it’s dirty and dangerous, dump it in Dundalk. 

If it’s dirty and dangerous, turn it in down at Turners Station. 

You know how we formed Team Maryland to stop a Federal prison from coming in there, but now we are talking about injury and 

death. 

So, Mr. Chairman, I’m hot about this issue, and as I said, I 

raised issues when Cove Point was being proposed. I remember 

coming into realizing that one month after the terrorist attack on 

the World Trade Center FERC approved the LNG permit for Cove 

Point, without any Homeland Security review. I wrote them a letter and said, what could you be thinking? And, I’m asking today, 

what are we thinking about here? 

I wanted FERC to take a look at this. I asked the FBI to take 

a look at it, the Nuclear Regulatory Commission, and most of all, 

the Coast Guard. While the Coast Guard responded after some 

push, after some pull, after some push, after pull, because they 

didn’t want to say what it would take, because it would take a lot. 

But, the Coast Guard promised to provide waterside security, scrutinize crew lists, board tankers, enforce exclusion zones, and look 

out for the community. 

Well, Coast Guard, worked with Dominion Power and it happened, but guess what? Five years later, we’ve gotten a letter saying, from the Coast Guard saying, they will no longer provide that 

security. The Coast Guard said it will no longer provider waterside 

security to Cove Point, so what the heck will they provide at Sparrows Point? 

Now, what they are essentially saying down at Cove Point is, you 

are on your own, and when we say you are on your own they are 

turning it over to the company and to the county. So, that means 

they are turning it over to the LNG company, and they are turning 

it over to the County Commissioners and the local sheriff. Oh, boy, 

now, that, you know, we love the sheriff in Calvert County, but he’s 

not exactly been trained to deal with the global war against terrorism. 

So, now this brings us to Sparrows Point, and I think it’s the 

same kinds of questions. Who will provide the security at Sparrows 

Point? Is it the county’s responsibility, and the County Executive, 

as gifted, and as talented, and as dedicated as this one is, his police 

department, his emergency management? Is it going to be AES, are 

they going to pay the bill in lieu of a Coast Guard? I don’t know 

that, and I’ve been trying to get answers, and what I get is a lot 

of paper and a lot of process, but not a lot of clarity. 

So, this is why I have so many flashing yellow lights about Sparrows Point, its environmental impact, the fact that there could be 

an attack or an accident, and who will then provide the security 

to deal with that or to prevent that? 

So, Mr. Chairman, I have a lot of questions. I commend this report to you. I think we have this hearing to try to get at this, but 

9

right now I just think it’s time to say no to those things that are 

dirty and dangerous coming to Dundalk and Sparrows Point. 

Mr. CUMMINGS. Thank you very much. 

Ladies and gentlemen—ladies and gentlemen, I would just ask 

that you not show—not applaud, please. This is a congressional 

hearing, and we would appreciate that, either for or against. 

What we want to do is, we want to now go to the County Executive, County Executive Smith, but I just want to check with the 

Governor. Governor, what I was going to do is go to County Executive Smith, and then I know your time is tight but have all the 

Members ask, you know, if they have a question of you, and then 

we’ll talk — then we’ll ask questions of Senator Mikulski and 

County Executive Smith, if that will work. 

Mr. CUMMINGS. County Executive, thank you very much for your 

leadership on this, and thank you for being with us this morning. 

Mr. SMITH. Thank you, Mr. Chairman, and Ranking Member 

LaTourette, as well as the other distinguished Members of this congressional Subcommittee, it’s nice for me to be back in my alma 

mater, and, Mr. Chairman, it didn’t look like this when I was here 

either, quite frankly. But, I’m really grateful for the opportunity to 

speak here today on behalf of the residents of Baltimore County, 

as well as all those who truly cherish the Chesapeake Bay. 

You know, as I’m confident this panel will recognize, the proposed Liquified Natural Gas facility at Sparrows Point poses a 

grave risk to the people and the environment, of not only Baltimore 

County, but of the entire region. The possibility of shipments of 

LNG into the heart of the Chesapeake Bay, with an 87 mile long 

pipeline transporting natural gas through populated areas is truly 

unacceptable. 

The citizens of Baltimore County have been unified in their opposition to the LNG plant. We have been joined in our opposition by 

our neighboring jurisdictions, along with our state and Federal 

elected officials. 

You know, as elected officials, we really have a responsibility to 

look beyond any minimal economic benefits of this facility to the 

long-term safety of our citizens and our environment. I’m here 

today to summarize the major points that are detailed in my written testimony that we submitted to you last week for your consideration, as you consider this very, very important decision. 

First, I have to say it is disturbing that until this hearing local 

governments were not included in this process. This exclusion really has given the public little confidence in the overall FERC and 

Coast Guard review process to date. At a minimum, I would hope 

that the Waterway Suitability Assessment report will be put on 

hold until the Coast Guard incorporates and/or addresses issues 

identified by the local governments and other organizations that 

have been excluded from the process. 

Second, my second major concern addresses what I believe is the 

fundamental conflict of locating a highly volatile LNG facility in 

the heart of a densely populated area. Placing this facility in the 

Port of Baltimore conflicts, not only with the operations of the Port 

itself, but also with recreational boating and chartered fleet fishing, 

and has the potential of damaging the Chesapeake Bay for generations to come. 

10

Third, this proposed facility is at odds with numerous provisions 

of the National Strategy for Maritime Security of 2005, and the remote siting considerations as provided in the 2005 Natural Gas 

Act. A terrorist attack on an LNG vessel traveling into the Port of 

Baltimore, passing under the Chesapeake Bay Bridges, and off 

loading a few hundred feet from an LNG conversion and storage 

facilities, poses a real and unacceptable danger to the critical infrastructures of this region, and thereby, frankly, to the United 

States. 

Fourth, the assurances of LNG proponents have been significantly eroded by the February, 2007 Government Accountability 

Office report on potential terrorist attacks on LNG tankers. I understand that the Department of Energy is looking to additional 

studies in 2008, to begin to address some of the issues raised by 

the GAO report. Making decisions today, without the benefit of 

these studies, that could impact our safety is just plain reckless. It 

is also unacceptable to the thousands of residents of this region 

who live and work, we have 2,500 who work at Mittal Steel within 

a mile of the proposed facility, to live and work with the anxiety 

of having this LNG facility in their backyards. 

In conclusion, I’m here today on behalf of my colleagues on the 

Baltimore County Council and the people of Baltimore County to 

oppose the proposed location of this LNG facility. An LNG facility 

at Sparrows Point would pose a significant threat to the people, 

economy and security of Baltimore County and the entire region. 

It really must be rejected, and I thank you for this hearing, and 

for your time and consideration. 

Mr. CUMMINGS. I want to thank you very much, thank all of you. 

What we are going to do now is, to the Members of the panel, just 

right now we just want to direct questions to the Governor, and 

then we’ll come back to questions for Senator Mikulski and County 

Executive Jim Smith. 

Let me just say this before we go on, I just want to thank Delegate John Olszewski for being with us, who represents Dundalk, 

and thank you very much for being with us. And then, we also 

thank Jerome Stephens, representing Senator Cardin, who couldn’t 

be here this morning, but thank you, Mr. Stephens. 

Let me just say to you, Governor, let me ask you something here. 

It seems as if, I mean, in their Coast Guard talks, in their written 

testimony about it being okay to have these facilities within a mile, 

in other words, a mile, they use a mile as the key, in other words, 

for residential areas and what have you, and then in other testimony, written testimony that we’ve gotten, there’s been a lot of 

mention of, I think it was Dunbar Brooks who will be testifying 

later, about how there are certain areas, like Turner Station, where 

there’s not—it’s almost—it’s very difficult to get out, in other 

words, there are not so many ways to get out, I was just wondering, you talked a little bit about earlier about the one mile situation, I take it that you have a lot of concerns about that, is that 

right? 

Governor O’MALLEY. Yes, Congressman, Mr. Chairman. The concerns are these, that the nature of the topography of that area on 

the peninsula would make evacuation in the event of an emergency 

very, very difficult, which means that, you know, rather than this 

11

being a remote site, this is a site that’s actually contiguous to a 

population that is living in an area that by its very nature is very, 

very difficult to evacuate. Contrast that with the location in Calvert County, and, you know, there there is a facility with easy access to the shipping channel, where you don’t have those concerns 

that you do in Turner Station and places like that, where populations are wedged into a peninsula. 

Mr. CUMMINGS. Mr. LaTourette. 

Mr. LATOURETTE. Thank you very much. 

Governor, thank you very much for being here, and I just have 

one question. 

Senator Mikulski, in her observations, talked about Cove Point, 

and I’m not a Marylander, I’m from Cleveland, Ohio, and the decisions by FERC relative to definition of remote site, is it your observation, based upon what you just said, that your opinion that the 

Cove Point facility would meet the remote site definition? 

Governor O’MALLEY. I think the Cove site facility is more in 

keeping with that remote siting mandate than certainly this one is, 

yes, sir. 

Mr. LATOURETTE. Okay, thank you very much. 

And, Governor O’Malley, I just want to—you were elected beating a fellow who was a classmate of mine, Governor Ehrlich, and, 

you know, in politics you say, oh, boy, I’m going to come to something and maybe I’m not going to like that person. In preparation 

for this hearing, my wife said I should read up about you, and I 

did, and I want to tell you, despite that fact I think you are a great 

guy and the State of Maryland is lucky to have you as its Governor. 

Governor O’MALLEY. Thank you very much. 

Mr. LATOURETTE. Thank you. 

Mr. CUMMINGS. Well, when he runs again we’ll bring you up here 

to campaign. 

Mr. LATOURETTE. Do we have that on tape? 

Mr. SMITH. We have that on tape. 

Mr. CUMMINGS. Congressman Ruppersberger, who has exercised 

his great and tremendous leadership on this issue, and thank you 

very much. 

Mr. RUPPERSBERGER. Well, thank you, Governor, for being here, 

and Congressman LaTourette, I want you to know that our Governor, former Mayor, is also a Ravens fan. I know how you feel 

about us in Cleveland, but stay with us. 

The questions I have really are probably to you and to Senator 

Mikulski about the Chesapeake Bay Bridge. The Bay Bridge is an 

irreplaceable part of Maryland’s transportation system. The bridge 

carries supplies and merchandise to the many businesses on the 

Eastern Shore, as well as thousands of tourists to the summer 

getaways. And, according to the Maryland Transportation Authority, on Saturdays in the summer an average of 95,000 vehicles 

cross the Chesapeake Bay Bridge, and they expect in 2025 there 

will be 135,000. 

Now, one of my big concerns would be if something were to happen to the bridge, and what that scenario could be. You have tankers that could, as a result of an accident, not in a terrorist situation, could cause severe damage on the Bay Bridge. Not only would 

12

it harm life, but also the economic impact that it would have in the 

State of Maryland to cut the Bay Bridge off. 

Richard Clarke was hired by the company that wants to build 

this facility, and he made a comment, and I responded to his comment in the media, that he did not feel there would be a security 

problem, including the Bay Bridge. And, one of my comments is, 

you have been hired by the company who wants to put the LNG 

facility, but secondly, have you never visited the Bay Bridge in the 

summertime? And, I think we really need to deal with this issue. 

The question would be, what economic impact would the Bay 

Bridge, if there was an accident or a terrorist situation, have on 

the economic impact of the State of Maryland and the Eastern 

Shore? 

And, there’s another issue that’s very important and I’m going to 

ask this to County Executive Jim Smith, the security issue for not 

only Coast Guard, but first responders. I’ll give you an example, in 

Boston an LNG tanker, the city has to supply the fire truck support, helicopter support, state police to block off a bridge, and I can 

imagine what would happen if we blocked off the bridge, the 

Chesapeake Bay Bridge, that the tanker passes under, marine police, state police, divers. 

Now, has the State of Maryland been able to assess the potential 

cost of security? What other facilities will be needed to provide this 

facility, and then also the economic impact. 

Thank you. 

Governor O’MALLEY. Congressman, our Secretary of Transportation, Mr. Porcari, is here, and I believe he’s going to be staying 

after I go. 

That’s been one of our concerns as well. One would think that 

if you need a 1,500-foot security, moving security zone around a 

shipment that it would necessitate the closing of the Bay Bridge 

when that shipment is moving through. I haven’t seen a definitive 

answer to that, but it would be all sorts of costs to holding that 

up, although, I guess Congressman Gilchrest might say there’s 

some constituents who would prefer that the Bay Bridge no longer 

give access to the Eastern Shore. 

Mr. CUMMINGS. We’re one Maryland. 

Governor O’MALLEY. But, I think that’s a big concern, and I 

think that’s a real concern and it’s a question that we have yet to 

receive an answer for, but it would necessitate additional security, 

it would necessitate blocking off the bridge if, indeed, we have to 

close it in anticipation of the shipment coming through. It would 

absolutely stretch our resources if we had to provide the air cover 

and everything else that it would need coming through, if those 

statements are true. 

Mr. RUPPERSBERGER. And, it’s my understanding, unless you correct me, that there’s no other route to the Eastern Shore, other 

than going around 95, is that correct? 

Governor O’MALLEY. You’d have to either go around north or you 

would have to go through the tunnel across from Norfolk. 

Mr. RUPPERSBERGER. I assume that would have great economic 

impact on the State of Maryland. 

Governor O’MALLEY. It would have a huge economic impact, it 

would be, you know, God forbid something happened and the 

13

bridge were taken out for more than the hours that it took for the 

ship to pass, then, yes, sir, that would have a devastating impact 

on tourism, and Ocean City, and the destinations, not to mention 

the displacement and the impossibility of many people who now 

live on the shore and commute to work on the western shore being 

able to get to and fro. 

Mr. CUMMINGS. Thank you, Governor. 

It’s my understanding that Mr. Sarbanes has to leave, but I want 

to thank you for being here, and Mr. Gilchrest has decided to yield 

to you, and so, Mr. Sarbanes. 

Mr. SARBANES. Thank you, Mr. Chairman. 

Just very briefly, I don’t have any questions for the Governor, I 

just want to thank you, Governor O’Malley, for your leadership on 

this issue, and many others, the compelling testimony as well to 

Senator Mikulski and County Executive Jim Smith. 

And, I want to thank you, Mr. Chairman, for your leadership. I’m 

on a steep learning curve in Washington right now, but it’s being 

helped by being able to watch you in action, not just in Washington, but when you bring these issues into the District. So, thank 

you very much. 

Mr. CUMMINGS. Thank you, Mr. Sarbanes. 

Mr. Gilchrest. 

Mr. GILCHREST. Thank you, Mr. Chairman. 

Welcome, Governor. Could you describe what your role is, I 

would like to make some comments about the Bay Bridge, but I’ll 

talk to Dutch a little bit later about the Eastern Shore remaining 

rural and agriculture, carpeted with farms and dotted with fishing 

villages. So, we are okay right now. 

Governor, could you describe your role as this permitting process 

has proceeded, as Governor of the State of Maryland, and I’m going 

to ask the County Executive the same question a little bit later, 

what is your role and your ability to effect the permitting process 

for this LNG facility, and what would you like your role to be considering we have a Federal system where the distribution of responsibilities are delegated between the Federal Government, and 

state governments, and county governments, and is there anything 

you think we can do as Members of Congress in Washington to enhance your ability to have some say in the process of permitting 

a facility that will bring in natural gas, or even maybe other products that are dangerous, that come from the International Community? 

Governor O’MALLEY. Well, my role is, first and foremost, as is 

the role of, I believe, every person in the Executive Branch of our 

Government, whether it’s Federal, state or local, to safeguard and 

protect the well-being of our people. So, first and foremost, that’s 

my primary concern. 

As far as the regulatory process and the permitting, the Federal 

Government has a great deal of power and occupies this particular 

realm with both feet, but I would hope that by being here today, 

and with the Chairman kindly bringing this hearing to Baltimore, 

that the voice of our state government will be heard in this matter. 

All of us are facing energy pressures, and challenges of creating 

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sumers as well, but I think that always has to be balanced with 

public safety concerns. 

Beyond the actual permitting of this facility, is also the logistics 

of keeping channels open, and making accommodations for dredge 

material, and doing those other things that fall within my role as 

the person primarily responsible for maintaining the economic 

health of a port that employs over 128,000 people. 

So, that’s how I see my roles, Congressman. 

Would we like to have more input in this? That depends on 

how—that depends on how these proceedings go. We do believe 

that right now we are being heard, but we believe that the security 

interests are paramount here, and that when the Governor of the 

state and the County Executive of the jurisdiction tells our Members of Congress that we do not have the capacity to be able to protect our citizens, given the particular topography of this site, we believe that those opinions should be heard. 

Mr. GILCHREST. Thank you. 

Just one other question. Do you see you role as Governor, is 

there another avenue, besides this hearing let’s say, that your voice 

can have an impact? 

Governor O’MALLEY. I don’t know, Congressman. I mean, we are 

participating in this process. We are joining forces with the County 

Executive, and we are going to do everything we can to exhaust our 

remedies in this process before going to any alternative or judicial 

process. 

Mr. GILCHREST. Thank you very much. 

Governor O’MALLEY. Thank you. 

Mr. CUMMINGS. Mr. Governor, I want to thank you very much. 

I know you have to go, but I just wanted you to know you’ve got 

the FERC people right behind you, they are literally sitting right 

behind you. 

Senator MIKULSKI. Mr. Chairman, before the Governor goes. 

Mr. CUMMINGS. Yes. 

Senator MIKULSKI. One point, and I know Congressman 

Gilchrest is familiar, is the Coastal Zone Management Plan, and as 

you know, that’s designed by the state, and, of course, it comes 

under the Commerce Department, as you know, Congressman 

Gilchrest, you’ve been so active on the Coastal Zone Management. 

And, I believe the Governor can have input there, ask for additional information through the CZMA. 

Mr. CUMMINGS. And, if there are—I see that a number of your 

staff, like Mr. Porcari is here and others, if there are additional 

questions, Mr. Governor, that you or your staff want us to present 

to the Coast Guard or FERC, please, get them to us and we’ll work 

with you. 

Governor O’MALLEY. Thank you. 

Mr. CUMMINGS. Thank you very much again, I really appreciate 

it. 

Governor O’MALLEY. Thank you. 

Mr. CUMMINGS. Members, what we are going to do is now go to 

the seven-minute rounds, and I’m not saying that you are required 

to use them, but we’ve got seven minutes each. 

Ms. Mikulski, Senator Mikulski, let me—your testimony probably 

has had—not probably, it has had tremendous impact on me, and 

15

I’m sure this Subcommittee, with regard to Cove Point, and let me 

tell you why. 

We just finished an eight-hour hearing on deepwater, and we 

saw, we have seen, we have, basically, looked at the Coast Guard 

from inside out, and we are abundantly clear that it is a great organization, as you said, a great organization, not good, great. But, 

it has, since 9/11 it’s been—more and more duties have been piled 

on the Coast Guard——

Senator MIKULSKI. Absolutely. 

Mr. CUMMINGS. —and it’s stretching, stretching, stretching, 

stretching, and we are concerned, as you are, that we wonder 

whether the Coast Guard is going to be able to take on these responsibilities of addressing the needs of a Sparrows Point LNG, 

and, and, keep in mind, there are 12 under construction. So, that 

means we’ve got a Coast Guard that’s already thin. We’ve got a 

Coast Guard that actually has vessels that are impaired, and I’m 

just wondering, with regard to the Cove Point, so when commitments were made to you with regard to Cove Point the Coast 

Guard was probably in better shape then than it is today. And so, 

I just wanted to just hear your comments on that, because—we 

don’t want a situation, I don’t think any of us want a situation, 

where we have something that’s been approved, and part of the 

process, of course, is making sure that if it were approved that it’s 

properly guarded, and everything is properly taken care of with regard to security, and then it’s turned over to a local police force. 

No offense to the local police forces, but the Coast Guard, one of 

the things that we do know from—this is our jurisdiction, we know 

the training pretty much that the Coast Guard go through, they 

know how to board these foreign vessels, they know what to look 

for, things of that nature, and so, and we keep in mind finally that 

all of these ships, all of them, carry the foreign flag, a foreign flag. 

And so, I just want your comments on that, please. 

Senator MIKULSKI. Well, first of all, your insights are accurate, 

Congressman. Number one, we have a convergence of two points 

here. 

Now, let’s look at where your Committee is, and let’s look at 

where the Coast Guard is. Remember, after 9/11 we moved the 

Coast Guard from the Transportation area, both authorizing and 

appropriations, and we put it under Homeland Security. So, the 

Coast Guard is supposed to be a Homeland Security agency, preventing and protecting us against predatory attacks. Also, they 

have that ongoing role of environmental enforcement in search and 

rescue, along with interdiction for drugs. 

Now, guess what, at the appropriations hearing we heard they are $8 billion short. So, for their national responsibility, and given 

the mandate we’ve given them to protect the Nation, and to rescue 

at sea, they are running an $8 billion shortfall. This can’t be made 

up by County Executives, County Commissioners, and sheriffs and 

local police. That’s not their job. It is our job, and that’s why we 

have to look at this budget and where our money is going. 

The other is, that in the Department of Homeland Security they 

decided that Maryland is not high risk, so we are not getting their 

fair share. It’s what you and the Members of the House, and I and 

Senator Cardin, have been fighting for, because, remember, they 

16

felt that Nebraska was a higher risk in terms of getting Homeland 

Security money than those of us in the Capitol Region. 

So, we’ve got a double whammy. Our beloved Coast Guard has 

a lot of unfunded Federal mandates in our protection, and they’ve 

decided we in Maryland don’t rank with Nebraska in terms of the 

funds for homeland security and port security. 

So, you see, they cannot have the resources to do this job. 

Cove Point, if I could just describe this, is—Cove Point is in Calvert County, which is midway up the Bay from the Eastern Shore, 

and the important thing about Cove Point is not about its access 

to water, and how easy it would be to get up on Route 301 in the 

event of an accident or an attack, it’s three miles from a nuclear 

power plant. Hello! What are the high-risk targets? 

Now, I must say, we’ve all worked very hard together to make 

Cove Point workable. The Coast Guard was prime time. We worked 

then with Governor Ehrlich, in terms of an overall support from 

the state police, Dominion Power work, et cetera, but just a few 

months ago we were told by the Coast Guard they were pulling out. 

So, guess what the Coast Guard is doing now, and we’ll ask them 

those questions, they said they are doing innovative and multi-jurisdictional security. I don’t know what that means. What it says 

now, they are providing a layered system, I don’t know what that 

means, of security. 

Well, you know what they are doing, they are training Calvert 

County sheriffs with ride-alongs. Well, I happen to believe in our 

sheriffs, okay, particularly, in our rural communities. They really 

stand sentry against gangs, meth, providing local law enforcement, 

but are they equipped in the event of this type of disaster, when 

again, the local governments certainly aren’t getting Homeland Security money, the Governor, we know we are not getting our fair 

share. 

So, I think we’ve got a jackpot on our hands here. 

Mr. CUMMINGS. I want you to understand that we’ve been trying 

to—and I think that what is interesting in our Subcommittee, I 

think you would have—there is a consensus with regard to our desire to see the Coast Guard be the very best that it can be, and 

be able to do all the things that we are requiring of it. And so, I 

thank you for your comments. 

And, I want to go to you, County Executive Smith. You know, 

you talk about the—you talked about the input that you have not 

had. I mean, nobody has talked to you about this, I mean, on the 

Federal level, and what have you been doing in an effort to try to 

have some input? After all, it does affect you and your government 

and the people that you have sworn to represent. 

Mr. SMITH. Well, we have participated in the FERC process. 

There was a pre-application hearing in June of last year, and I testified there, as well as had about 12 of my department heads, because we testified from various aspects as to the concerns and the 

inappropriateness of the location at that time. 

We also met the deadline with regard to the filing of the voluminous reports in connection with the window of opportunity we had 

in the FERC process. However, with respect to this waterways report, frankly, I didn’t even know it was ongoing, even though a 

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ing, pre-application hearing. So, we really haven’t had an opportunity to participate in this process until today, and we are very 

grateful for that opportunity that you have given us, by having this 

hearing today. 

As far as, you know, what does local government have the right 

to do, land use is something that is critical to local government, obviously, and Baltimore County has attempted to regulate the use 

of this land in a way that would preclude the LNG facility there, 

because we have the responsibility for the health, safety and welfare, and safety is one of the big issues with regard to government 

responsibility. But, actually, AES has us in Federal court trying to 

prevent us from having that land use measure sustained. 

We have also approached this from an environmental standpoint, 

through the Coastal Zone Management Act, I may not have the 

handle exactly right, but it is the Coastal Zone Regulations of the 

Federal Government, which allows the state to do some regulation, 

and the state allows the locals to do some regulation. And, we are 

working with respect to that area, mostly that deals, obviously, 

with the environmental component or concerns with regard to the 

location of this LNG facility. 

But, even with regard to that, NOAA has the right to overrule, 

and even if NOAA doesn’t overrule, quite frankly, the Secretary of 

Commerce can be appealed to, and the Secretary can overrule a 

local, state objection on environmental grounds, and still be overruled. 

So, kind of to get to Congressman Gilchrest’s question also, 

which is related to this, is we don’t have a lot of hours in the quiver, quite frankly, to address—even though we have the responsibility to protect our citizens, we really don’t have much of a role 

because FERC has really been given almost the absolute authority 

and power to override everything in connection with their determination as to whether to license this facility. 

I have Richard Muth over there, who is my Homeland Security 

and Emergency Management Director, and I have been beating on 

him for over a year with respect to what can we do if this happens. 

And, the reality is, we can’t do that much. I mean, the approach 

in the industry, as best we understand it, if there is an explosion 

you let it burn itself out. That’s, basically, how you handle this. 

So, the idea is, we never want an explosion. Well, how do you not 

get an explosion? You don’t get an explosion if, number one, you 

don’t have attractive targets, and, Congressman Ruppersberger, 

what more attractive to terrorists would it be with a summer-filled 

family, filled Bay Bridges going to the Eastern Shore that blows 

up, I mean, what an attractive and a very sick way, but an attractive target for terrorists. 

And then, what happens to the whole economy of the Eastern 

Shore, with respect to if the bridges are blown, I mean, that’s not 

just a season, that is years of economic harm that comes. 

So, all of these aspects, we have the responsibility, but we don’t 

have the ability to monitor. I mean, the Coast Guard really would 

have to provide the security. The Federal Government would have 

to stay on top of any potential terrorist activity in the Chesapeake 

Bay, if, in fact, this site is approved. 

18

So, you know, I may sound passionate about the issue, but it’s 

because it’s an issue that deserves passion, I mean, because it is 

that critically important to human beings, and when I hear that, 

well, there’s only 1,500 people who live in Turner Station, and 

there’s only 2,500 people who work at Mittal Steel, and so that’s 

4,000 people, and maybe there’s a few more people in Edgemere 

that would be affected if it blew, and that’s not enough? That 

makes me sick, quite frankly, to think that that isn’t enough people 

to be an attractive terrorist attack. 

And, the report, the GAO report, raises all kinds of issues as to 

whether a mile is the distance of the burn. They don’t know, and 

I think before we get into a populated area in the Port of Baltimore 

we ought to know. 

Thank you. 

Mr. CUMMINGS. Mr. Latourette. 

Mr. LATOURETTE. Thank you very much, Mr. Chairman, and 

thank you, Senator and County Executive, for your excellent testimony. 

I thought this hearing was going pretty well until Ruppersberger 

brought up the Baltimore Ravens, but it does—it does, in fact——

Mr. RUPPERSBERGER. I can understand that. 

Mr. LATOURETTE. —lead to my question, Mr. Smith. 

My staff tells me that Baltimore Gas & Electric has been liquefying natural gas in the City of Baltimore since 1975, less than a 

mile from your two beautiful, beautiful stadiums. Is that true? 

Mr. SMITH. I don’t know if that’s true. I can tell you, though, it’s 

not an operation of the dimension of the proposed LNG facility at 

Sparrows Point. 

Mr. LATOURETTE. But, let me ask you this, again——

Mr. SMITH. I know we have some, I just don’t——

Mr. LaTourette: —I think you have three tanks, if my information is right, and those tanks are about a third of the size of the 

tanks at Cove Point, and so if you’ll permit from a devil’s advocate 

standpoint to accept that as true——

Mr. SMITH. Sure. 

Mr. LATOURETTE. —I would ask you what this City’s experience 

has been with those facilities? 

Mr. SMITH. Well, Baltimore County is a jurisdiction that wraps 

around the City, but the City is a jurisdiction unto itself. So, I am 

not intimately familiar with what that—what issues they have had 

to contend with, Baltimore City has had to contend with, with regard to that facility. 

Cleveland, I think, is in a county, but Baltimore is its own jurisdiction, it’s not within the county. So, I’m just not intimately familiar with that situation. 

Mr. LATOURETTE. Okay. I would think if it had been a big problem it would have come to your attention, one, but two, and more 

importantly, I think the Senator’s point is right on the money, and 

what I’m trying to get at is, even though that facility has been 

there since 1975, and my information was that there was a crack 

in the mid 1990s that was resolved in an expedited manner, but 

I think the world has changed since September 11th, and so you 

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ing about how you take care of facilities, we are now talking about 

terrorist targets. 

So, are you saying that you are not the right county person to 

get in front of us to talk about what they’ve done to upgrade the 

security at this BG&E facility? 

Mr. SMITH. I don’t know what they’ve done to upgrade the security at the BG&E facility, but I think the point that you made is 

a critical point, that the world has changed since 2001, and what 

was reasonable back in 1975 is no longer reasonable any longer. 

I don’t—I know that the Governor, who was Mayor of Baltimore 

before he became Governor just last November, was a leader nationally in the area of Homeland Security, and had initiated a lot 

of Homeland Security programs, many of them in the City, because 

we worked in a collaborative fashion. 

But, I don’t know specifically with regard to the BG&E facility. 

Mr. CUMMINGS. Will the gentleman yield briefly? 

Mr. LATOURETTE. Absolutely. 

Mr. CUMMINGS. We will—we’ll make sure we get that information for you. 

Mr. LATOURETTE. Thank you, Chairman, I appreciate that very 

much, and then just lastly, sort of a comment. Somebody mentioned that these LNG ships are foreign flagged, which is right, but 

just to show you how everybody, I think, in the United States pulls 

together, and, particularly, men and women who served in labor organizations, it’s my understanding that the Maritime Engineers 

Beneficial Association has entered into an agreement to provide 

U.S. license and documented officers and merchant mariners 

aboard any LNG vessel bound for the United States operated by 

Excelerate, and I would hope that that would be something that as 

we look at all of the issues with LNG facilities that other organizations would seek to replicate. 

And, thank you, Mr. Chairman, yield back. 

Mr. CUMMINGS. We are going to have testimony from that organization, I think they are on the third panel, and we’ll hear from 

them. 

Mr. Ruppersberger. 

Mr. RUPPERSBERGER. Well, Mr. Chairman, I have a statement I 

want to read, I want to make sure I get it in the record, but I want 

to thank you for your leadership and bringing your Committee, and 

chairing the Committee. It’s so important that we have an open 

hearing such as this, and that the facts do get out. 

You know, this facility is, it’s just the wrong location, not anywhere in the Baltimore County area, but just the Chesapeake Bay, 

and all the other issues that are involved. Other locations don’t 

have the issues, you know, that we do have. 

I want to thank the gentleman from Cleveland for coming to the 

Land of Pleasant Living, Baltimore is a great place, and thank you 

for coming here. 

And also, Congressman Gilchrest, you’ve been so much involved, 

and Sarbanes, and Senator Mikulski has been taking—working 

with this on a daily basis, attempting to do the issues that need 

to be done, and also in her role in the Intelligence Committee. 

There’s a lot that we know that we can’t say, but we know the imVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
20

pact that this could have. And also, I know you’ve been working 

with Senator Cardin also. 

I represent the district where the proposed terminal is to be located, and I have a responsibility to my constituents to do everything I can to ensure this hazardous and dangerous project is 

stopped. This facility is wrong for the community. It’s wrong for the 

Chesapeake Bay, and wrong for Maryland’s security. 

If constructed at the former Sparrows Point Shipyard, it would 

be less than two miles from heavily populated neighborhoods of 

Dundalk, Turner Station, Edgemere, Waters Edge, and also 

Edgemere and in the midst of the fragile bay ecosystem. 

While I was Baltimore County Executive, the same job that County Executive Smith has now, we invested over $130 million to 

help revitalize this area, and I know that County Executive Jim 

Smith is doing even more in the revitalization issue in part of this 

area of the county. 

This facility would harm those revitalization efforts and, perhaps, most importantly, the neighborhoods around the proposed 

site would be vulnerable to an accident or attack at the facility. 

This would cause the revitalization effort to step back. It’s a perception that their families are going to be in danger, and that 

would be a bad thing. 

Before we get into the safety and security issues, I want to talk 

a little about the quality of life impact that this plant would have 

on our area. Recreational boating is a major part of the lives of the 

people who live in this area. It’s very unique to have more of a 

dense area, urban area, where we have boating. A lot of times 

water throughout the East Coast, it’s the States, but we have a 

quality of life where we go fishing, boating, crabbing, all of that, 

all of this would be impacted by that. 

Boating also supports a lot of small businesses, marinas along 

the Chesapeake Bay, that type of thing. And, because of the size 

of the tankers that would move through the Bay, due to this plan, 

recreational boating would have to be severely curtailed or even 

eliminated throughout the tankers’ routes, plus there’s a catchment 

area, if you’ve seen Cove Point, an area would boating would not 

be allowed to occur. The impact on boating in Maryland would be 

devastating and unacceptable. 

We have the Coast Guard here today, and I agree with Congressman Cummings. I didn’t realize until I came to Congress what a 

quality organization, they do so much, but they have so much responsibility, and they would just have a lot more responsibility, 

and I’m not sure that they have the resources, the support, or the 

money to do what they’d have to do. 

I want to thank the Coast Guard again for the hard work you 

do in the Baltimore area and around our Nation. The Coast Guard 

will be offering security and navigation safety recommendations to 

FERC, and I hope they will play a significant role in determining 

the future of this project. 

I’m very concerned that area residents could be harmed if there’s 

an accident at the facility or a terrorist attack. Liquified Natural 

Gas is hazardous fuel that can explode when ignited. In addition 

to the plant itself, the tankers bringing natural gas to the area 

would be targets as well. 

21

A report by the nonpartisan Congressional Research Service entitled, ‘‘Liquified Natural Gas Infrastructure Security: Issues for 

Congress,’’ cautions that, ‘‘Potentially, catastrophic events could 

arise from a serious accident or attack on such facilities, such as 

a pool or vapor cloud fires.’’

The U.S. imports about 3 percent of its natural gas as LNG, but 

by 2030 that percentage is supposed to rise to 17 percent. To meet 

these demands, there are now proposed 32 on-shore LNG terminals, plus five off-shore sites. 

It is my understanding that as of October, 2006, FERC and the 

Coast Guard have approved 13 LNG applications. We are moving 

quickly to meet our energy needs, but I fear that because of our 

haste that we are not adequately addressing security. This is the 

wrong location. 

We do have to find ways to meet our growing energy needs, but 

it must be done with safety as the paramount consideration. 

Throughout our country communities are concerned about safety 

issues and potential LNG terminals. I serve on the House Intelligence Committee, and Senator Mikulski in the Senate, and we 

know how familiar these type of threats are to our country. We 

have to recognize that the world environment we live in is dangerous. Terrorist want to, not only hurt us, but they also want to 

do it in a spectacular fashion. Imagine a tanker on attack under 

the Chesapeake Bay Bridge in the summertime. They want to draw 

attention to their attacks, and to show us that we are vulnerable 

in all aspects of society. 

At the heart of the safety issue is the heat impact of the LNG 

pool fire. There are at least six unclassified studies on the LNG 

safety issues. The range at which people would be in danger at 1/

3 of a mile up to 1.25 miles, but there are a number of risks aside 

from the explosion and subsequent heat exposure. There is asphyxiation and the yet to be fully understood cascade fire. 

I understand there is a lot of uncertainty on what can happen, 

and I think that uncertainty should be a warning sign to all of us. 

It should tell us all that we are not sure about what could happen. 

That’s not acceptable. 

And, in a densely populated area, the uncertainty should be 

enough to halt the LNG facility. The Baltimore area represents a 

unique security environment. For this proposed site tankers carrying natural gas would have to travel far up the Chesapeake Bay, 

past Cove Point LNG facility, past Calvert Cliffs, past the Port of 

Baltimore, and under the Chesapeake Bay bridge to reach our communities. It becomes path of targets. The tankers themselves are 

a significant threat to the environment, the Bay Bridge, and millions of people who live near the bay. 

The Coast Guard is already patrolling the LNG facility at Cove 

Point and Calvert County. The Coast Guard’s security capabilities 

could be stretched to thin if another plant is opened nearby. 

The Bay Bridge is an irreplaceable part of Maryland’s transportation system. The bridge carries supplies and merchandise to the 

many businesses on the Eastern Shore, including the rural businesses, as well as thousands of tourists to summer getaways. 

According to the Maryland Transportation Authority, on Saturdays in the summer traffic averages 95,000 vehicles and is exVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
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pected to increase 42 percent by 2025 to 135,000 vehicles on the 

Chesapeake Bay Bridge, going over the Chesapeake Bay Bridge. 

There are no alternate routes over the bay. Without the bridge, 

cars would have to travel far north or far south to get to the Eastern Shore of Maryland. If the bridge were made unstable by an attack or an accident on one of the natural gas tankers traveling up 

the bay, large portions of Maryland’s economy would be brought to 

a standstill. 

A majority of the community in Baltimore opposes this proposed 

terminal because of security reasons, environmental concerns, potential impact on the Port of Baltimore, and a basic elimination of 

life on the Chesapeake. 

I join with my community in opposition to the proposed LNG terminal in Sparrows Point. 

Thank you. 

Do I have anymore time? 

Mr. CUMMINGS. No. 

Mr. RUPPERSBERGER. No, okay. 

But, I also would like to—I would like to introduce also my written statement. Thank you. 

Mr. CUMMINGS. So ordered, and as a matter of fact, I gave you 

an extra minute or two, Mr. Ruppersberger. 

Mr. RUPPERSBERGER. Oh, thank you. 

Mr. CUMMINGS. I want to—just one quick thing, Mr. Smith. You 

understand that as I said to Senator Mikulski, our main jurisdiction is the Coast Guard, and the Cove Point situation, Senator Mikulski speaks of flashing yellow lights. It concerns me with flashing 

red lights. 

And, the reason why it concerns me so much is that it seems as 

if, and we will hear testimony a little bit later, commitments were 

made, but for whatever reason, for whatever reason, had to be 

changed and could not be kept, and I’m just wondering if you had 

to provide the security for these—for a facility like this, first of all, 

do you have the resources? Do your personnel have the training to 

do it? How would you handle that? I’m just curious. 

Mr. SMITH. Well, the answers to the first two questions are no 

and no, and, quite frankly, the last question would be, I have no 

idea how a local jurisdiction would handle it. I mean, you think 

about the nature of the issue, I mean, it’s not really handling the 

explosion after it occurs, because right now everybody says you just 

let it burn out, and you let it do the damage it’s going to do, and 

that’s it. So, the key is to make sure it never explodes. The key is 

to make sure that there is no terrorist attack. 

Local jurisdictions don’t have the information, I mean, we just 

heard Congressman Ruppersberger say that he and Senator Mikulski know some things that we don’t know, and I’m glad they do, 

but if we were going to have the responsibility in the local jurisdiction to meet that responsibility we’d have to know that. Well, we 

are never going to get that kind of information, the kind of terrorist 

information that the Federal Government has available to it that 

it can share with the United States Coast Guard, that isn’t going 

to be shared with Baltimore County Police. It’s not going to be 

shared with our Marine Division of our Baltimore County Police 

Department. We are not going to have the data, we are not going 

23

to have what it’s going to take to provide the security for prevention, prevention of a terrorist attack on an LNG facility at Sparrows Point. 

That’s the truth. That’s the reality. If anybody is saying differently, they are kidding you, because the information just would 

not be available to us. 

In addition to the fact, we don’t have—our Marine Division is not 

very large, quite frankly, in Baltimore County, even though we 

have 175 miles of waterfront, but we have a very small Marine Division of our Police Department. And, we don’t have the kind of national security unit that would ever be able to have what would be 

needed to provide the security for that plant in Baltimore County. 

Mr. CUMMINGS. Thank you very much. 

Again, we thank both of you. Are there any other questions? 

Mr. Gilchrest, I’m sorry, Mr. Gilchrest, I apologize. 

Mr. GILCHREST. It’s all right, Mr. Chairman. 

I want to stay on that line of thinking for a while, and we just 

had a GAO study that recognizes some of the inherent and potential problems with natural gas. 

We also have access to the Congressional Research Service, so 

maybe we should ask GAO and CRS to do an evaluation of the 

Interstate Commerce Clause, because I think maybe this touches 

upon that issue as far as the U.S. Congress being responsible for 

interstate commerce, LNG coming up to these different ports certainly with all the pipelines have to do with that constitutional 

issue. 

But, when we look at that constitutional issue, and then what 

you are describing here with the Coast Guard responsibility of 

looking after the safety of all these facilities, and then the Coast 

Guard not having enough people to do that, and then looking for 

ways to layer that into the local jurisdiction with local police and 

state police. 

So, it seems to me that if the local jurisdiction is going to have 

responsibility for the security of these facilities, for the safety of 

these facilities, then the local jurisdiction has to have some jurisdiction and direct responsibility in that permitting process. 

So, we want to stay involved in this and be your sounding board 

as we move through this process, certainly for the next two panels, 

so that we can ask them specific questions about safety and security measures, but coming from the Eastern Shore I know how burdened already the local police force is, and we have a lot of water 

on the Eastern Shore, local police force, and the state police, and 

people that work in the marine safety areas, they are already 

stretched beyond the breaking point. 

When we first began to look into this issue with Cove Point, 

when they operated, when they didn’t operate, now that they are 

operating, this was prior to 9/11, so we had a certain view of the 

world. Now we have a different view of the world. So, if local governments are going to be responsible for the safety and security of 

these kinds of facilities, which are, we must assume, targets for 

terrorists, there’s got to be a new time frame or new dimension to 

look at these issues. 

The other comment I wanted to make was, this is actually making us more dependent on foreign sources of fuel. The more faciliVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
24

ties you open, the more foreign sources will this country be dependent upon, and maybe we shouldn’t—you know, this is just a 

thought off the top of my head, maybe there should not be one 

LNG facility opened in the United States until we say that every 

single vehicle should be doubled in their gas mileage, that no incandescent bulb should ever be produced again, that we are going 

to target, and we have the technology that is available right now 

to really make us energy independent, if we had the political will 

to move forward and do that. 

Thank you, Mr. Chairman. 

Mr. CUMMINGS. Thank you very much. 

Just one other question to Senator Mikulski. Senator, we’ve been, 

and FERC is going to testify, but, I mean, just putting on your hat 

as a Senator and representing the state, one of the things that is 

interesting, according to our numbers, and FERC will correct me 

when they come up here, but, apparently, they’ve approved 12 for 

construction and denied one LNG plant, and I’m just wondering, 

does it concern you that maybe in the law of averages that maybe 

you would expect more to be denied? I’m just curious. 

Senator MIKULSKI. Well, Mr. Chairman, first of all I don’t know 

the circumstances of those requests, but I am concerned that FERC 

has a pattern of approving a lot of the requests. Second, I’m also 

concerned, and will pursue that in my questioning, about are they 

taking into consideration the national security issues that now 

have befallen our United States of America. We are at war. We are 

also at war in the global war against terrorism. What are targets 

of opportunity and also targets of choice, but energy facilities, 

whether they are nuclear power plants or LNG. 

When we looked at Cove Point, one of the places I went was to 

BG&E, Mr. LaTourette, to make sure what were they doing. BG&E 

is spending a bucket of bucks on their own to provide their security 

and then coordinating with a lot of other local resources. 

So my concern about FERC is, what are the national security 

concerns, and how do they coordinate that with the appropriate 

Federal agencies, the Nuclear Regulatory Agency, the Coast Guard, 

and, of course, the Intelligence Department at the Department of 

Homeland Security. I mean, this is, ultimately, where is the Coast 

Guard? It is no longer under the Department of Transportation, it 

is under the Department of Homeland Security, it’s job is to protect 

the homeland. FERC’s job is to listen to what the homeland protectors say and have that as part of their permitting process. 

Mr. CUMMINGS. Thank you. 

Mr. Ruppersberger. 

Mr. RUPPERSBERGER. County Executive Smith, I see FERC is 

here and taking notes, and I want to get this in the record. Number one, could you describe what Baltimore County is, as you said 

before to Congressman LaTourette, that it is on its own, and what’s 

your population in Baltimore County? 

Mr. SMITH. About 802,000 people. 

Mr. RUPPERSBERGER. Okay, now you have a large, diverse county, so you have other responsibilities, other than just to do what 

needs to be done in this area, is that correct? 

25

Mr. SMITH. Oh, right, it’s 640 square miles, and it has agricultural to heavy industrial, quite frankly. It is a microcosm of America. 

Mr. RUPPERSBERGER. Now, what I think in some situations have 

been approved, you have these facilities maybe in an industrial 

area, but could you describe what revitalization efforts are going on 

in the area, how densely populated the area is compared to other 

areas where maybe LNG facilities have been placed, where you 

don’t have that population. 

And also, in this revitalization, I know you as County Executive, 

and when I was County Executive, it’s Federal, state and local 

money that’s been invested, why it’s being successful, and what impact it would have on Baltimore County generally in that community if this were to come. 

Mr. SMITH. Well, the Dundalk community is one of the densely 

populated areas of Baltimore County. It’s also one of the industrial 

areas of Baltimore County, with very important industry there. 

And, Congressman Gilchrest, we are moving forward with an 

ethanol plant, which the community has been generally accepting, 

quite frankly. So, it’s not like they are against everything. They are 

not out there against everything. 

On your $130 million in your two terms, I’ve already, on behalf 

of Baltimore County, committed another $90 million on top of that. 

This is an area that is—we use the term renaissance now, but it’s 

an area that is experiencing a tremendous renaissance in Baltimore County. 

And, that is, as the Congressman has just pointed out, that’s 

both Federal, state and local dollars. So, it’s been a unified effort, 

and this is just, as the Congressman has said, it is the wrong place 

to consider an LNG plant. 

And, a big difference between, even this and Cove Point, and I’m 

not suggesting that Cove Point was an ideal location, but they unload their product a mile, I think it’s a mile and a quarter from 

land and pipe it in, this is like 300 feet or 300 yards, it’s something 

in that, I don’t know whether it’s feet or yards, it’s probably yards, 

from land. I mean, it’s a totally different operation, and, of course, 

it does come up, I mean, I’m going to end up repeating myself, but 

it does come up the Chesapeake Bay into the Port, closes the Port 

because of the distance that you have to be from the tanker, and 

that will close the channel, when the tanker is going to the LNG 

plant itself. I mean, it is a major threat and a major negative. 

I can tell you, the Dundalk area is in a renaissance, and our Economic Development Department has been taking prospects, businesses that we are looking to locate in Baltimore County. We’ve 

had two of those major employers say, is that where the LNG plant 

supposed to go? Show us other sites in Baltimore County. We do 

not want to be in close proximity to that facility. 

So, it’s not just the people of Turner Station, and Dundalk, and 

Edgemere, who work at Mittal Steel that are concerned, there’s a 

lot of concern out there, and I think it is clearly justified. 

Mr. RUPPERSBERGER. And, as you said, it impacts Anne Arundel 

County, Baltimore City, all these areas, where these huge tankers 

are coming up, not a terrorist attack, but could be exposed to an 

accident, which could cause devastation. 

26

Thank you, County Executive. 

Mr. CUMMINGS. Thank you very much. 

I want to thank you both for your testimony. We really appreciate it. It’s my understanding that now Senator Mikulski is going 

to join us. I ask unanimous consent that the Senator may join the 

Subcommittee for the remainder of the hearing, for the purpose of 

asking questions of witnesses. Without objection, it is so ordered. 

We are going to take a seven-minute break, seven-minute break. 

Senator MIKULSKI. Mr. Chairman, I also want to acknowledge 

the fact that Senator Cardin is also opposed to the LNG. He will 

be submitting testimony. He is at a meeting on the Helsinki Commission on Human Rights at the request of Senate leadership in 

Europe today. He wanted to be here, and he wants to be on the 

record, and we are both united in this. 

Mr. CUMMINGS. Thank you very much. 

Thank you, we will look forward to his statement. 

Thank you very much. 

Mr. SMITH. Thank you very much. 

Mr. CUMMINGS. We’ll take a seven-minute break. 

[Recess.] 

Mr. CUMMINGS. We are very pleased to have been joined by State 

Senator Vernon Jones, thank you, Senator, thank you for your 

leadership, Mr. Cummings. Rear Admiral Brian Salerno, thank you 

very much for being with us. 

STATEMENT OF REAR ADMIRAL BRIAN SALERNO, DIRECTOR 

OF INSPECTION AND COMPLIANCE, U.S. COAST GUARD; CAPTAIN BRIAN D. KELLEY, UNITED STATES COAST GUARD, BALTIMORE SECTOR, RICHARD HOFFMANN, DIRECTOR, GAS, ENVIRONMENT, AND ENGINEERING, FEDERAL ENERGY REGULATORY COMMISSION 

Admiral SALERNO. Good morning, Mr. Chairman, distinguished 

Members of the Committee, Senator Mikulski, I’m pleased to be 

here with you this morning to discuss the Coast Guard’s role in 

providing for the safety and the security——

Mr. CUMMINGS. Can you keep your voice up, please? 

Admiral SALERNO. —of Liquified Natural Gas vessels and facilities. 

In coordination with other Federal agencies, and with state and 

local stakeholders, the Coast Guard is responsible for ensuring that 

the marine transportation of LNG is conducted safely and securely. 

LNG vessels do have an impressive safety record. Since the inception of LNG shipping in 1959, there have been over 40,000 LNG 

shipments around the world with few serious accidents, and of 

those accidents none have resulted in significant damage to the 

cargo tanks. 

LNG carriers and other vessels carrying liquified hazardous gasses in bulk are built and inspected to the highest engineering and 

safety standards enforced internationally. 

Today, there are over 200 foreign flag LNG vessels in operation 

worldwide. Their crews include some of the most highly trained 

merchant marine officers and seamen afloat. 

Security for LNG vessels, as with other vessel types, involves 

multiple layers. The Maritime Transportation Security Act of 2002, 

27

MTSA, established a robust maritime security regime for vessels 

operating in U.S. waters and for the facilities which handle them. 

MTSA requires that the vessel develop and implement a threat 

scalable security plan, assign security duties to key personnel, and 

address a wide range of security topics, including access control 

measures, surveillance and monitoring, emergency procedures, and 

training. MTSA imposes comparable requirements on facilities. 

There is also an international counterpart to MTSA called the 

International Ship and Port Facility Security Code, is ISPFS. Because ISPFS requirements are in effect internationally, they serve 

to enhance the security of the supply chain from overseas loading 

ports, through ocean transit, as well as during port visits in the 

United States. 

In addition to these statutory and treaty-based regimes, we also 

have procedures to develop early awareness of commercial vessels 

intending to enter the United States. In particular, all deep-draft 

vessels must provide the Coast Guard with a 96-hour advance notice of arrival. This notice includes information on the vessel’s previous ports of call, crew identities, and cargo. This information is 

fully vetted through national databases to detect any concerns or 

anomalies well in advance of the vessel’s arrival in U.S. waters. 

Based upon the risk profile, the Coast Guard may employ a variety of means to verify that the vessel does not pose a threat, such 

as pre-entry security boardings to ensure that the vessel is under 

proper control. 

The Coast Guard typically escorts LNG vessels through key port 

areas, in order to protect against an external attack. Escorts are 

performed by armed Coast Guard vessels, often in conjunction with 

other Government agencies, including state and local law enforcement partners. 

The combined efforts of Federal, state, local and where appropriate private assets, contribute to the port risk mitigation plan. 

As for the facilities, the Federal Energy Regulatory Commission, 

FERC, has the siting authority for shore-side LNG terminals. However, the Coast Guard is a cooperating agency in the preparation 

of FERC’s environmental impact statement. 

Incorporated into the EIS is the local Coast Guard Captain of the 

Port’s assessment and determination regarding the suitability of 

the waterway for the proposed vessel transits, including the identification of mitigation measures needed to responsibly manage identified safety and security risks. 

Looking towards the anticipated growth of LNG, the Coast 

Guard continues to analyze resource allocation and capacity. Future increases in work load may be accommodated through a variety of measures, including reallocation of existing resources, expanding the use of other Government agency and private security 

forces to conduct security operations, requesting new resources, or 

some combination of these options. All of these options are under 

consideration. 

It is important to note that there are other hazardous cargos regulated by the Coast Guard to ensure the safety and security of our 

ports. Moreover, there are 11 mission areas in the Coast Guard’s 

portfolio, and to accomplish them our resources are multi-mission 

in nature. Our prevention and protection strategies are, therefore, 

28

aimed at ensuring that the highest risk situations receive the highest level of protection. This is an ongoing process. 

Thank you for giving me this opportunity to discuss the Coast 

Guard’s role in LNG security and our relationships with other 

stakeholder agencies. I’ll be happy to answer any questions you 

may have. 

Mr. CUMMINGS. Captain Kelley. 

Captain KELLEY. Good morning, Mr. Chairman, Ranking Member LaTourette, and distinguished Members of the Committee, my 

name is Captain Brian Kelley, and I am the Commander of Coast 

Guard Sector Baltimore. Our base of operations is located in the 

Curtis Bay area, just south of the City of Baltimore, at the Coast 

Guard Yard. 

Sector Baltimore is the largest Coast Guard operational unit in 

this area. The sector combines the former Coast Guard group small 

boat stations, Aids to Navigation Teams, and Marine Safety Office, 

all under one roof, which, hopefully, then equates to more convenient one-stop shopping for our customers. 

We conduct operations ashore, as well as on the water, ranging 

from safety and security inspection of vessels and facilities, all the 

way to search and rescue cases. 

Our sector has approximately 300 active duty personnel, 190 reservists, and 1,500 Coast Guard auxiliarists. Our operational units 

include three Aids to Navigation Teams and seven small boat stations, one of which is only manned during the busy summer 

months. 

The boundaries of my area of responsibility cover most of the 

navigable waters and tributaries of the Chesapeake Bay and the 

Potomac River, from Smith Point just south of where the Potomac 

River meets the Bay, northward to the C&D Canal at the Maryland/Delaware line. Also my area of responsibility covers both the 

Virginia and the Maryland sides of the Potomac River, including 

the Anacostia River. 

Our focus is mission execution, and my goal is to balance safety, 

security and commerce with the public’s right to the waters. We accomplish much of what we do by employing a multi-layered safety 

and security system, primarily placed there by the Maritime Transportation Security Act regulations. To do this, we work closely with 

the private sector and with the local county and state and other 

Federal law enforcement agencies to ensure that we are all working as effectively and as efficiently as we can in our collective missions. 

I wear many different hats in my job, and I have the responsibilities of the Federal On Scene Coordinator, Search and Rescue Mission Coordinator, Captain of the Port, Officer in Charge of Marine 

Inspection, and Federal Maritime Security Coordinator. The primary responsibility for me, as the Captain of the Port and the Federal Maritime Security Coordinator, is to steward the process for 

reviewing the proposed LNG facilities and to not promote any particular project itself. 

The Coast Guard has jurisdiction over the navigable waterways 

and waterfront facilities, strictly as they relate to maritime safety 

and security of commerce, vessels, facilities and their personnel. 

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minals, though, where the Federal Energy Regulatory Commission 

has the lead. Most of our requirements in this endeavor are found 

in Title 33 of the Code of Federal Regulations, Part 127, entitled, 

‘‘Waterfront Facilities Handling LNG and Liquefied Hazardous 

Gas.’’

This regulation requires an applicant desiring to build a waterfront LNG facility to submit a letter of intent to the pertinent Captain of the Port. In the case of Sparrows Point, that’s me. Because 

the transit of any LNG vessel will also be through Virginia’s waters 

in the southern Chesapeake Bay, we work with the Captain of the 

Port in Hampton Roads throughout the review process. 

This regulation then requires me to issue a letter of recommendation back to the applicant, as to the suitability of the waterway for the LNG marine traffic. Before that can happen, though, 

a lot of other things must happen first, such as an extensive safety 

and security risk assessment, which we call the Waterway Suitability Assessment. It’s reviewed by the local safety and security 

committees and by my office. 

This assessment and our review are also transmitted to FERC 

for inclusion in analysis in their environmental impact statement. 

We are in the process of reviewing the risk assessment submitted 

for Sparrows Point at this time. 

In addition to stewarding this review process and providing input 

to FERC, we have the additional job of inspecting the facility’s vessel-to-terminal transfer operations, the vessels carrying the LNG to 

the facility, and the security of both the vessel and the facility, to 

name a few. 

In this brief amount of time, I hope that I’ve shed some light as 

to the roles and responsibilities of Coast Guard Sector Baltimore in 

the proposed operations. 

Thank you very much for this opportunity to speak with you 

today, and I will be glad to answer your questions. 

Mr. CUMMINGS. Thank you, Captain. 

Mr. Hoffmann. 

Mr. HOFFMANN. Thank you, Mr. Chairman, and Members, and 

Senator Mikulski, I appreciate this opportunity to speak with you 

today. 

I’m the Director of the Division of Gas, Environment and Engineering, in the Office of Energy Projects at FERC, and my group 

is the one that does the environmental and safety reviews of 

Liquified Natural Gas facilities and all the interstate natural gas 

pipelines that get built in the country. 

First today I’m going to explain the extensive design review process that we use for all projects that come before us, and how we 

ensure safety and security, and second I’m going to give you a status of where we are with the AES proposal that’s the subject, at 

least in part, of this meeting today. 

The Commission’s primary role is as a safety regulator. It’s the 

most important thing that we do. The safety record of LNG import 

facilities over the past 35 years in this country has been exemplary. 

The FERC process is inclusive, comprehensive and transparent, 

inclusive in that we bring Federal, state, local agencies and the 

public into the process to get early input, and that’s very important 

30

information for us; comprehensive in the way that my testimony 

goes into great detail on the description of FERC’s engineering, environmental review, the cryogenic design review, and how we break 

the facility down into all its components and look at each one of 

them. That happens in three phases, pre-authorization, pre-construction and pre-operation. And finally, the process is transparent 

in that, virtually, everything we do is available through the web, 

it’s on the record, and it’s all available through our e-library system 

through the FERC website. 

I’ll go over each of the phases very quickly. First is pre-authorization. This starts with the pre-filing process, where we go out and 

we start to meet the public at company—usually proponent-sponsored open houses, FERC staff goes to those, we start meeting people and start to get a feel for the issues that they have. 

Shortly after that, we organize our own public meetings through 

our scoping process under the National Environmental Policy Act, 

and as you heard the Baltimore County Executive was there at our 

meetings, and we’ve had dealings with his people. 

As part of this pre-authorization process, we begin our detailed 

cryogenic design review of all the LNG facilities, the components, 

and the operations, and we begin our detailed independent assessment of the environmental impacts that we look at through our environmental impact statement that we prepare under the auspices 

of the National Environmental Policy Act. Here we begin our coordination with the Coast Guard, with the Corps of Engineers, with 

other relevant Federal agencies, state agencies, and also local and 

public input into that process. 

The state review under three very critical statutes begins during 

this period of time, too, and those statutes are the Coastal Zone 

Management Act, the Clean Air Act, and the Clean Water Act. 

As we compile all this data, when we get ready and our analysis 

we feel is complete, we publish our draft environmental impact 

statement, we put it out for public comments, that’s for 45 days, 

we’ll come back into the local area and along the pipeline route and 

we’ll have public meetings so people can share with us their comments on what they think of our analysis, and eventually we’ll 

compile a final environmental impact statement, which we’ll publish, and then eventually that record will go to our Commission. 

The Commissioners are the ones actually that make the decisions 

at the agency. I’m part of the Commission’s professional staff, and 

my job is to put a good complete record in front of them. If the 

Commissioners feel that, and our recommendation is that a facility 

is safe and environmentally sound, and they find that it’s in the 

public interest, they’ll approve it. If we don’t feel it’s safe and environmentally sound, I believe the Commission will deny it, but they 

will make a decision. 

The second phase is the pre-construction phase, and if a Commission order is issued then there’s many conditions that must be met 

before any construction is allowed. These deal with environmental 

engineering, final design conditions that we’ve put on the facilities, 

its components, the way it operates, how they put together their 

plans, and the FERC engineering staff goes through a very detailed 

review of all of the final designs, the piping and instrumentation 

31

diagrams, hazard control, hazard detection, and all the systems 

that go into that, both active and passive. 

Also a part of this pre-construction phase is the emergency response plan that has to get put together by the company, it gets 

coordinated with the Coast Guard and state and local officials, and 

emergency response planning has to be filed with the FERC, along 

with the cost sharing plan, and we have to review that plan, emergency response plan and cost sharing plans, and approve them before any construction will be allowed to begin. 

If a project does get the approval to go into construction, it goes 

into the third phase, which is the pre-operational phase. So, we 

continually inspect during the three-year period of time that facilities are under construction, at least every eight weeks we are on 

site doing our reviews. All the construction is monitored, we verify 

all the quality control inspections that are ongoing by the applicant, the engineering procurement construction contractor, and 

check everything out from both a safety and environmental, standpoint. 

The Waterway Suitability Assessment that gets submitted to the 

Coast Guard, and is the basis for their Waterway Suitability Report to us, that gets updated annually, so that any changes can be 

considered during that process before operations begin. 

Once all the conditions are met, and we do our pre-commissioning inspections, which are another set of inspections before a 

new facility goes into operation, then the Director of the Office of 

Energy Projects will issue a letter, if appropriate, and if safety can 

be assured, that would allow the facility to go into operation, and 

then after operation we continue inspections for the life of the 

project, and we do that along with the Coast Guard and with DOT. 

Now, I’ll just quickly give kind of a status of where we are with 

the Sparrows Point project. 

The pre-filing process began in April of 2006. That’s where there 

open houses around the site and along the pipeline route by the 

company, we attended them. The FERC staff held its scoping meetings in June, and we had site visits along the pipeline route and 

at the LNG terminal site in both June and July. 

I have a light flashing at me, so I might be taking too much time, 

sorry. 

The application was filed in January of ‘08—and I’ll be done very 

quickly. The Maryland, State of Maryland, filed its Safety Advisory 

Report with us in February, and we are presently reviewing all of 

that information, both us, the Coast Guard, the Corps of Engineers 

regarding dredging, and State of Maryland agencies. 

We have submitted data requests to the company and gotten 

some answers back. We are still waiting for more. We have to review all of this information, all of these replies, our own analysis, 

make decisions on whether or not that information is adequate, in 

order for us to proceed with our draft environmental impact statement. 

We are waiting for the Waterway Suitability Report, it’s a formal 

report from the Coast Guard to us, on the navigational suitability 

of this proposed tanker route coming up through Chesapeake Bay. 

Then eventually, we’ll issue our draft environmental impact 

statement. We don’t have a date for that right now. We will publish 

32

that for the comment period, and we’ll have the meetings I addressed earlier. 

Right now, specifically, the primary issues that we have before 

us, and these are kind of big picture, shipping safety and security, 

impacts to commercial and recreational boating and fishing is obviously a concern, the dredging concerns that you’ve heard about, 

bringing up toxic materials from the bottom, environmental justice, 

whether or not there’s any disproportionate impacts to the communities in Turner Station, Dundalk or anywhere else, concerns along 

the pipeline route, and its proximity to people, businesses, and 

we’ll look at all that. 

I can assure you that we will thoroughly examine every single 

issue that gets brought before us, and we’ll lay that all out in our 

draft environmental impact statement, and that’s about where we 

are. 

And, that concludes my comments. Thank you. 

Mr. CUMMINGS. Thank you all very much. 

Just to pick up where you left off, Mr. Hoffmann. When it comes 

to the dredging issue, in talking to some of our environmentalists 

community here, a lot of them are concerned that over many years, 

maybe even as many as 30 or 40 years, that when Bethlehem Steel 

was there that all kinds of things was dumped in the water. And, 

they believe that at the base of the—on the bottom, when you begin 

to dredge all this stuff up, you are going to run into a major, major 

problem, and they are concerned that it would be extremely harmful to the northern part of the Chesapeake Bay. 

And so, I just don’t know whether that has—when you mentioned dredging, I was wondering, is that one of the things that you 

are looking at? 

Mr. HOFFMANN. Yes, sir, absolutely. It’s a concern of everybody. 

It’s a concern of my staff, it’s a concern of the Corps of Engineers, 

the U.S. Army Corps of Engineers, the Maryland Department of 

Environment, everybody has their eyes on that as one of the number of issues. 

The techniques that are being proposed by the company to do 

that dredging, the potential for it to stir up any sort of pollutants 

that would be harmful and would spread through areas, are all 

issues that we have to study, and will. 

And, you know, our analysis of that will be laid out, in our case, 

in our draft environmental impact statement. The Corps of Engineers is a cooperating agency with us. The Maryland Department 

of Environment is an intervener in our case, so they are not a cooperating agency, but they have, I believe, it’s them or it’s the 

Maryland Department of Natural Resources, that has to issue one 

of the permits I made reference to earlier, which was the Clean 

Water Act 401, Section 401 permit, which is a state-issued permit 

based on Federal law under the Clean Water Act, and that’s a concern that everybody has, and we are going to get to the bottom of 

that. 

Mr. CUMMINGS. Now, there was—how many of these facilities 

have you all denied? I mean, in other words, that you said you 

were not—would not be suitable? 

Mr. HOFFMANN. Well, the one—there’s one, it was in—it was the 

Key Span facility up in Providence, Rhode Island, that the ComVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
33

mission issued an order and said that since that was an excellent 

existing peak shaving plant, it wanted to convert to a new import, 

to perform an import function, and it did not meet the current Federal safety standards for LNG import facilities, and the Commission issued an order denying that. 

That’s the only one, specifically, that we have denied, but there 

are a number of projects around the country that people have started proposing and, perhaps, just, you know, backed off or walked 

away from. 

Mr. CUMMINGS. One of the things, I think, that you can understand, that there are a number of people that are concerned that—

and they are hoping, and most respectfully they are hoping that 

this is not some type of, you know, that they go through the process and that the end result is sort of dictated before they even get 

started. Do you understand that? Can you understand that concern? 

Mr. HOFFMANN. Yes, absolutely. 

Mr. CUMMINGS. And so, they are concerned that all of the efforts 

that they are putting forth, and you’ve heard the testimony of the 

County Executive, you heard the Mayor, I mean the Governor, you 

heard our distinguished Senator, Senator Mikulski, we want to 

make sure that we have a fair process that takes into account all 

of the things that you have heard and more. 

And so, I hope that you will keep that in mind. 

Mr. HOFFMANN. Sir, it’s absolutely clear to me that our Commission has a very wide open process, and takes into account all of 

this information. You know, our analysis and our environmental 

impact statement, our work with the U.S. Coast Guard, is critical 

to making those determinations, and with the state, and the permits that they issue. 

Mr. CUMMINGS. Okay. Captain Kelley, Rear Admiral Salerno, you 

heard the testimony, and I’ve expressed my concern with regard to 

the Coast Guard, and I know that Senator Mikulski will probably 

ask some questions about this, but this Cove Point situation is 

quite disturbing, and can you explain what happened there? Apparently, some commitments were made, and then things changed. 

See, I think what we are concerned about is that you have an 

approval, and then everybody goes along their merry way, and we 

still have to deal with it. The folks who live here have to deal with 

it. And, the Coast Guard, you know, you are doing a great job, but 

you all move on to, and leave some of the responsibility to others 

who may not be trained to do what you do. And, you all are well 

trained. 

And so, could you comment on that for us? 

Captain KELLEY. Yes, sir, Mr. Chairman, I’d be glad to. 

First of all, let me dispel any thought that we are moving away 

from security for Cove Point. That is something that I looked at 

when I first came in here in June as the new Captain of the Port, 

and I saw that there was really a disproportionate amount of Coast 

Guard bearing that responsibility, not the responsibility, but actually the functionality of providing the security. 

We will continue to escort the vessels while they are underway. 

However, when the vessel is tied up at the facility, similar to 

guarding the front gate or the land side, I thought that it was perVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
34

tinent for the facility to bear part of the responsibility of security 

while the vessel is moored at the facility. 

So, to do that I engaged our partners at the county level, as well 

as the state and other local entities, and the facility operators 

themselves, to share in the responsibility for security while the vessel is moored. 

Now, to do that, Dominion Cove Point entered into an arrangement with Calvert County, and Calvert County Commissioners are 

supporting this, where Dominion is forking over a bucket of bucks 

to the county, so that the county may have—may acquire the resources, they are buying boats, they are hiring personnel, that we, 

the Coast Guard, are assisting in their training, as well as other 

Federal entities, such as the Federal Law Enforcement Training facility, they’ve got their personnel going down to Georgia to learn 

more about enforcement. 

I’ve also entered into an agreement with the county, so that their 

resources can enforce the security zone around the vessel while it 

is moored. 

So, I believe that we have a layered security system. I call it innovative, because I don’t know where they are doing it anywhere 

else, and it’s an opportunity for the vessel operators and also for 

the facility operators to share the burden of providing the security 

for the vessel. 

And, I won’t have them out there unless I certify that they are 

ready to go, and we will test them, we will train with them, they 

will share our tactics and our procedures, and also we operate with 

them, so that when we take them along, as we are right now, for 

vessel ride-alongs, they are learning the business, and they are 

learning our tactics, they are learning the boat handling that we 

have learned, and established ourselves as experts at. We are sharing that knowledge, so that they are fully prepared, ready to go, 

before I certify them. 

Mr. CUMMINGS. Rear Admiral Salerno, on page seven of your 

written testimony you indicate that the Coast Guard is working on 

regulatory changes in 33 CFR, Part 127, necessary to bring existing letter of intent and letter of recommendation regulations up to 

date. And, why have all these existing regulations not been brought 

up to date, particularly, as new terminal projects are now moving 

forward through the regulatory process? 

But, before you answer that, just think about that one, and I 

want to go back to you, Captain Kelley. When we look at this whole 

idea of 12 of these facilities already being approved for construction, and of all the things that we have to do with regard to the 

Coast Guard, and in light of deepwater, and all that has happened 

with regard to that, and all of Congress’ concerns and the Coast 

Guard’s concerns with regard to deepwater, and let’s say all of 

those 12 that have been approved for construction go forward, isn’t 

that going to be a bit of a burden on the Coast Guard? 

Captain KELLEY. Mr. Chairman, first of all, in the hypothetical 

situation where we would have that many facilities submitting for 

approval, in each individual case we would be looking at a waterway suitability assessment and then the Coast Guard would be 

issuing their Waterway Suitability Report. 

35

The Waterway Suitability Report would individually address the 

resources that are available to provide security and to manage the 

risk for each one of these facilities, which is, each facility is going 

to be different. Various locations, whether it’s at Sparrows Point, 

or whether it’s off shore. 

So, I find it difficult to generalize and specifically answer your 

question with a yes or no answer, because of them each being individually and our resources are not evenly distributed. 

Mr. CUMMINGS. Well, will these county marine patrols, will they 

have the same authority that you have? And, if they do have that 

same authority, where does that authority come from? 

Captain KELLEY. The authority comes through our Memorandum 

of Agreement that I have with the individuals who are—or the governments whose personnel are enforcing our security zone. 

Mr. CUMMINGS. And, that authority comes from where? Where do 

you get the authority to enter into that agreement? I’m just curious. 

Captain KELLEY. I don’t have the specific cite here with me, sir. 

Mr. CUMMINGS. I mean, it’s jut not something that you just came 

up with. 

Captain KELLEY. Oh, no, sir. 

Mr. CUMMINGS. Okay. 

Captain KELLEY. Absolutely not. 

Mr. CUMMINGS. We are in a law school. 

Captain KELLEY. Yes, sir, and I fully respect that. 

We do have an extensive law staff, and we’ve gone with the lawyers, for example, in Calvert County, we’ve worked hand in hand 

to make sure that everything is proper in regard to the law. 

Mr. CUMMINGS. All right, Rear Admiral, you can go ahead and 

answer my question, and then I’ll pass it on to my colleague. 

Admiral SALERNO. Yes, Mr. Chairman. 

The existing regulations do contain a process for th Captain of 

the Port to provide a letter or recommendation on the waterway 

suitability for LNG transit. Those regulations predated 9/11, and 

they were focused, primarily, on the safety, navigational safety concerns. 

Since 9/11 we’ve established guidelines which greatly expand the 

concerns over security and give guidance to the Captains of the 

Port and to applicants as to how to proceed through this process. 

Those guidelines are contained in a Navigation and Vessel Inspection Circular, No. 505. 

Our intention is to take many of those guidelines and insert 

them into Federal regulation. The guidelines, you know, since we 

are in a law school, as you know, do not constitute the same—they 

don’t have the same weight as a regulation. We are using them, we 

are following those guidelines, but to make this pure we really 

need to take those guidelines and make them part of regulation. 

Mr. CUMMINGS. We are concerned, by the way, that there are so 

many regulations that need to be addressed. And, we can—that 

may be the subject of a whole other hearing, but again, I wonder 

whether or not that part of the problem, while we haven’t had 

those regulations addressed, is because of personnel issues and 

things of that nature. But, that’s a whole other subject. 

36

One last question, Captain Kelley, probable cause, can that be 

delegated, that authority, with regard to probable cause? When you 

delegate this authority, through your Memorandum of Understanding, your authority with regard to probable cause, that is, the 

boarding of a ship or what have you, I mean, is that delegated to 

the locals? 

Captain KELLEY. We maintain our current authorities to stop 

any vessel in the territorial seas. 

Mr. CUMMINGS. So, you don’t need probable cause. 

Captain KELLEY. That is correct, sir. 

Mr. CUMMINGS. Well, what about the locals, they don’t need it either? 

Captain KELLEY. They would also be operating under our tactical 

control, so as far as——

Senator MIKULSKI. What about your legal authority? 

Mr. CUMMINGS. I yield to the gentlelady. 

Senator MIKULSKI. I just want to clarify the Chairman’s question. He isn’t asking you about your tactical, what legal authority 

can they intervene? 

Mr. CUMMINGS. That’s the question. 

Senator MIKULSKI. That’s a different legal authority than you. 

Captain KELLEY. Even though I sit in a law school, I don’t necessarily have all the expertise——

Mr. CUMMINGS. We are going to have to get to the bottom of that, 

because I think——

Captain KELLEY. Yes, sir. 

Mr. CUMMINGS. —it all goes to some things that Mr. Gilchrest 

was asking a few moments ago, because we’ve got to figure out 

what, you know, when we start bringing in the local authorities, 

and I know that you’ve talked about the training that you give, and 

all these wonderful things, but, I mean, we are talking about serious business here. 

Captain KELLEY. Yes, sir, without a doubt. 

Mr. CUMMINGS. And, these are shipments, I mean, you are talking about a lot of LNG coming through, you are talking about 150 

possible ships coming in a year, I think the testimony says. That’s 

a lot. 

And so, I think we need to look very, very carefully, you know, 

take a careful look at that, and, I mean, I respect Memorandums 

of Understanding, but we’ve got, you know, we do have a Congress 

here, and we do pass laws, and we need to take a look at that. 

Admiral SALERNO. Sir, if I may. 

Mr. CUMMINGS. Yes. 

Admiral SALERNO. Just to add something to Captain Kelley’s 

comments. There is a provision in the Federal regulations which allows the Coast Guard to use other law enforcement agencies in the 

enforcement of a security zone established by the Captain of the 

Port. 

Also, the other law enforcement agencies engaged do not surrender their own inherent law enforcement authorities. So, they 

would—we have concurrent jurisdiction out there. What the Memorandum of Understanding does is establish a partnership agreement and establish the rules of engagement. 

Mr. CUMMINGS. Well, we’ll take a look at that. 

37

Admiral SALERNO. Yes, sir. 

Mr. CUMMINGS. Thank you. 

Mr. Latourette. 

Mr. LATOURETTE. Thank you very much, Mr. Chairman. 

Captain Kelley, first to you, I know the thrust of this hearing is 

about the concern about the placement of the new facility at Sparrows Point, but just to close the loop on Cove Point. You’ve entered 

into agreements with local law enforcement. You said that the operator of the Cove Point facility, bucket of bucks isn’t really descriptive to me. I mean, it’s over a million dollars, is it not, a year? 

Captain KELLEY. That is correct, sir. 

Mr. LATOURETTE. For the specific purpose of training local law 

enforcement to assume some responsibilities when the ship is actually tied up. 

Captain KELLEY. That is correct. 

Mr. LATOURETTE. You are not transferring the responsibility of 

boarding the ship before, making sure everything is okay before it 

comes and ties up? 

Captain KELLEY. That is correct. 

Mr. LATOURETTE. It’s while the ship is docked. 

Captain KELLEY. Yes, sir. 

Mr. LATOURETTE. And, that requires a certification by you. I 

mean, are you going to sign off on that before you are convinced 

that it’s okay? 

Captain KELLEY. I will personally sign off on it, yes, sir. We will 

make sure that all of the resources that are going to be enforcing 

that security zone are capable before they are allowed to do the 

mission. 

Mr. LATOURETTE. Okay, thank you very much. 

Mr. Hoffmann to you, when the Governor was here, he referenced the term remote site, and as you know the Pipeline Safety 

Act directed the DOT to consider the cost and benefits associated 

with the placement of LNG terminals at remote sites. GAO testified in ‘79 that remote siting may enhance public safety in the unlikely event of an accident at a gasification facility. 

I assume FERC is required in this process that you’ve talked 

about to weight the benefits and costs of a remote site, is that 

right? 

Mr. HOFFMANN. Yes, sir. 

Mr. LATOURETTE. And, is there a definition in the Federal regulations of remote site? 

Mr. HOFFMANN. Well, the way that—DOT is responsible for establishing those Federal safety standards in accordance with the 

Act you quoted, and the way they went through that process was 

to set up exclusion zones around the shore-based facility, based on 

certain design type spills, including a full dike spill from a failed 

storage tank, which has never happened. And yet, that’s one of the 

criteria. 

So, we—my engineers go through a very exhaustive process of 

modeling each of the spills and calculating the exclusion zones. The 

exclusion zones have to either stay on the property of the proposed 

terminal, or if they go off there are certain uses, whether it be residential or commercial interests that cannot be within that exclusion zone. The company then would have to establish control over 

38

those areas, and those are calculations we are running right now 

on the Sparrow Point facility. 

Mr. LATOURETTE. So, if you were asked the question, is Sparrows 

Point a remote site, you don’t have the answer to that because you 

are still working on the calculations. 

Mr. HOFFMANN. Correct. 

Mr. LATOURETTE. Okay. And, if it was not, let me just be clear 

so I understand, if at the end of the day you determine that it’s 

not a remote site, you then would make additional requirements 

upon the potential operator to turn it into a remote site, or that’s 

just one factor. You say, well, it’s not a remote site, so that’s a 

black mark on that one. We’ll move on to the next. 

Mr. HOFFMANN. In the case I referenced before up in Providence, 

that facility did not meet the current standards for the exclusion 

zones, and we felt, and, ultimately, the Commission denied it because it didn’t meet those standards. 

So, meeting those standards is essential. 

Mr. LATOURETTE. And, is acreage, does that go into the discussion of remote site? And, I ask the question because, again, not 

being from here I’ve been told that the Cove Point site is big, 

whereas, this is 45 acres, am I right about that? 

Mr. HOFFMANN. I believe this is about 80 acres, the AES proposal is about 80 acres of a 170 acre parcel. They are planning on 

using about 80 acres. So, they have more land than what they are 

proposing to build on, and if the exclusion zones go off that, they’ll 

have to show that they’ve established control through either easement agreements or whatever. 

Mr. LATOURETTE. Okay. And then, there were some questions of 

the first panel about the concern that the state was going to be excluded from the process. Is it your observation the state participation is still required in the Coastal Zone Management legislation, 

the Clean Air Act, and that the state actually has to issue the Section 401 certificate under the Clean Water Act? 

Mr. HOFFMANN. Yes, and not only that, we, my staff has had 

meetings with the state sponsored Joint Evaluation Committee, 

which is made up of a number of different Maryland organizations 

that are all part of, you know, people we coordinate with in preparing our draft environmental impact statement. 

Mr. LATOURETTE. Okay. And lastly, the last subject that I want 

to talk to you about, in your oral testimony you said that the industry has a safety record that’s been exemplary over the last 35 

years. Could you amplify on that just a little bit? 

Mr. HOFFMANN. Yes, sir, that goes back to, I think the first one 

was the District Gas Facility up in Boston, but there are four on 

land import terminals in the Continental U.S. There’s one export 

facility in Alaska. There’s another import facility in Puerto Rico 

that’s under our jurisdiction, and there has never been an accident 

at any one of those, which has affected either the environment or 

off-site public. 

Mr. LATOURETTE. And that, I think, is the point I was trying to 

make earlier with the BG&E tanks that have been in Baltimore 

since 1975, there is an industry that does a good job of promoting 

safety, and I think that the safety record that you’ve talked of, my 

information on LNG accidents is the worst one occurred in CleveVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
39

land, Ohio in the 1940s, and clearly technology has caught up with 

what happened back in the 1940s, and we are way ahead of that. 

The ships are double hauled and so forth and so on. 

So, I think that we should separate inherently dangerous enterprise from what the Senator was talking about, this is a new world, 

and in the new world I think that our focus needs to be on how 

do we protect these assets from people that would do us harm, as 

opposed to scaring people that this is an unsafe enterprise. 

And again, based upon your—are you familiar with the BG&E 

tanks? Is that under your jurisdiction? 

Mr. HOFFMANN. No, that facility, that facility, there’s about 108 

LNG facilities in the U.S. We have 17 of them that operate in either import facilities or that operate in interstate commerce. So, 

there’s 12 peak shaving plants that are under FERC jurisdiction, 

maybe 13 now because we might have just approved another one, 

so that number might have just changed. 

And, BG&E’s facility is not one of them, but those three tanks 

hold the equivalent, I think, of about 1 bcf, 1 billion cubic feet of 

natural gas equivalent, and we’ve had staff go to that site and visit 

it, you know, not inspect it per se, but we are familiar with it. 

Mr. LATOURETTE. And, is the safety record comparable for that 

side of the industry from what you’ve been talking about, about 

these off-shore operations? 

Mr. HOFFMANN. Yes, it is, with the notable exception of the one 

that you referenced before, which was really pre—kind of pre-modern technology, the Cleveland accident. 

Mr. LATOURETTE. Okay, thank you very much. 

Thank you, Mr. Chair. 

Mr. CUMMINGS. Thank you very much. 

Mr. Ruppersberger? 

Mr. RUPPERSBERGER. Yes, thank you. 

Mr. Hoffmann, what weight is security given to the final determination? You have environmental issues to deal with, what 

weight would security be given? 

Mr. HOFFMANN. Well, I think safety and security is number one, 

it’s essential. I mean, if we can’t come to that decision that the facility can be operated safely and securely I believe our Commission 

will not approve it. 

Mr. RUPPERSBERGER. Now, how do you define security assessment, is that what you are getting from the Coast Guard, or you 

are getting from the applicant, how do you define security assessment——

Mr. HOFFMANN. Well, that——

Mr. RUPPERSBERGER. —when you are making a determination 

based on experts in that area. 

Mr. HOFFMANN. —that occurs on a couple of different levels. The 

Department of Transportation, also PHMSA, the Pipeline of Hazardous Material Safety Administration, are the group in the Federal Government that establish, promulgate, the Federal safety 

standards for the on-shore facilities, and they have some security 

requirements in their regulations. 

We include security in our review of the on-shore facility. The 

Coast Guard has responsibility under the Maritime Transportation 

40

Safety Act of 2002 for all waterfront facilities, and then the Coast 

Guard has the responsibility for security of the tanker operations. 

So, all of those things are reviewed in looking at a proposal. 

Mr. RUPPERSBERGER. Do applicants conduct their own security 

assessments? 

Mr. HOFFMANN. It pretty much all starts with the applicants, in 

terms of, you know, meeting the Federal standards and coming up 

with their own plans. 

Mr. RUPPERSBERGER. Has an applicant’s assessment been ever 

substituted for a Coast Guard assessment? 

Mr. HOFFMANN. The applicants begin the process, in that they—

the Coast Guard guidelines that were referred to before put the 

burden on the applicant to prepare a preliminary waterway suitability assessment, which is based on the channel, their proposal, 

the channel that they are operating in, and input from the port 

community, and that report is one of the initial pieces of seed information that goes into the Coast Guard process. 

Mr. RUPPERSBERGER. Some of my evaluation has shown that it 

seems a lot of weight is given to the security assessment of the applicant. I mean, that’s like the fox guarding the hen house, in my 

opinion. 

Now, I know that’s part of the process, but I wonder how much 

weight is given, and that’s a determination. 

Let me ask you this question. As far as intelligence, has an applicant’s assessment ever been—or does the Coast Guard or any of 

these assessments deal with intelligence issues? 

Mr. HOFFMANN. Well, I would have to say yes, although I don’t 

know exactly what the Coast Guard has dealt with. 

Mr. RUPPERSBERGER. Let me ask the Coast Guard. Do you have 

people who are cleared to talk about intelligence issues that should 

be very relevant to an assessment, security assessment? 

Admiral SALERNO. Sir, we do have people who look at the intelligence. That is an ongoing issue, as you might expect. 

Mr. RUPPERSBERGER. But, I’m asking as it relates to this issue 

itself, as to giving information in the assessment to FERC. 

Admiral SALERNO. We do look at overall risks, yes, including intelligence risk. 

Mr. RUPPERSBERGER. But, can you answer the question whether 

you know specifically whether or not the input from your intelligence goes into this? 

Captain KELLEY. Yes, sir, we do, we have a Sector Intelligence 

Officer who works directly for me, as well as a Field Intelligence 

Support Team. We look at all of the threats, in particular, for a 

proposed facility like this, to make sure that we are positioned to 

manage the risk. 

Mr. RUPPERSBERGER. Okay. Mr. Hoffmann again, what is the 

size of a standard hazardous exclusionary zone? I’ve heard that the 

exclusion zones are as small as 1,000 feet, and how does FERC determine the hazard exclusion zone? I think that’s a major issue, because we have different types of sites. Is there a certain standard? 

Mr. HOFFMANN. Yes, there are. They are laid out in the Department of Transportation standards. I made reference to that in general before, but what goes on in those standards is that there are 

certain specific design spills, whether they be from unloading line, 

41

during tanker unloadings, or whether it be as great as a catastrophic failure of a tank, and the dike around it fills up with LNG, 

and then the assumption is that it ignites. And we do our calculations either on vapor, all vapor from any sort of spill on the site 

has to remain on the site up to half of the lower flammable limit, 

which is 2-1/2 percent of natural gas and air, that has to remain 

on the site, per the proposal and the way it’s designed. All the different sumps and containments and things like that. 

Mr. RUPPERSBERGER. What is the appropriate size for the hazard 

exclusion zone for this proposed Sparrows Point site? 

Mr. HOFFMANN. We have not completed that work yet, but we 

will lay that out. I mean, we’ll explain all that and our calculations 

in our draft environmental impact statement. 

Mr. RUPPERSBERGER. Let me ask you this. What is the tenminute spill scenario? Is still the standard used for determining 

safety requirements? 

Mr. HOFFMANN. Ten-minute spill scenario is—I’m sorry, Senator, 

are you—oh, okay——

Mr. RUPPERSBERGER. She’s trying to assist me. 

Mr. HOFFMANN. She’s distracting you. 

Mr. RUPPERSBERGER. She’s my intern coach. 

Mr. HOFFMANN. The ten-minute spill scenario is for an unloading 

line spill while the tanker is unloading. They operate at a pressure 

that pumps on the ship, pump LNG out of the ship into the tanks, 

and one of the exclusion zone scenarios is a ten-minute spill from 

the unloading line. They have to have containment that would hold 

that amount of liquid, so it can’t spill out onto the ground uncontrolled. It has to be contained in——

Mr. RUPPERSBERGER. Is there just one scenario here? 

Mr. HOFFMANN. That’s one of many scenarios that get looked at. 

Mr. RUPPERSBERGER. Captain Kelley, has the Coast Guard, if you 

know, ever banned the shipment of LNG tankers into any U.S. 

ports? 

Captain KELLEY. Sir, I don’t know. 

Admiral SALERNO. Sir, I’ll answer that. 

Not permanently, sir, there have been occasions where a ship has 

been denied entry. 

Mr. RUPPERSBERGER. Sometimes you are told, not when you are 

in law school, you don’t ask a question unless you know the answer, I think the port in Boston was closed right after 9/11. Do you 

know what the circumstances were, why you closed that, that port? 

Admiral SALERNO. Yes, sir, I do. I happen to have been the Captain of the Port in Boston. 

Mr. RUPPERSBERGER. You are the right person. What’s your answer then? 

Admiral SALERNO. I signed the Captain of the Port order. 

The reason it was held out was, it was immediately after 9/11, 

we realized we needed better risk information, so that we could 

adequately put together a security plan for the port. Up to that 

point, we had a very robust safety plan, we needed to address security, and we needed to address the consequences of an attack. 

Mr. RUPPERSBERGER. My time is starting to run out, let me, and 

I thank you for that answer, that was a good answer, and I just 

hope we have those scenarios there now. 

42

Captain Kelley, the Water Suitability Assessment is very important to this whole process, and it is the one product that is needed 

in the security assessment, I believe, for FERC. 

Can you explain to me who on your team does the assessment? 

Do these people have expertise? Do you have the resources or 

enough people with all of the LNG applications coming on board, 

how can we be sure that the Coast Guard, who is overworked now, 

can be in a position to handle these assessments so that the security information does go to FERC, ultimately? 

Captain KELLEY. The Waterway Suitability Assessment is reviewed by our personnel at the Sector of Baltimore, but we don’t 

do it alone. Through the area Maritime Security Committee we’ve 

got a great collaborative effort where we have representatives from 

the private sector, as well as the state, county and local levels of 

government are partners in the port. They all have a stake in the 

facility. They all have a stake in reviewing the security and the 

overall assessment. 

So, prior to issuing my Waterway Suitability Report, which is an 

elaboration of the Waterway Security Assessment that is submitted 

by the applicant, we have a multi-level, multi-perspective review of 

the WSA. 

Mr. RUPPERSBERGER. Thank you, my time is up. 

Mr. CUMMINGS. Mr. Gilchrest. 

Mr. GILCHREST. Thank you, Mr. Chairman. 

Mr. Hoffmann, if the site that we are talking about now at Sparrows Point did not meet the standards for a remote site, would that 

mean any other consideration would be moot and the site would 

not be permitted? 

Mr. HOFFMANN. Well, if that happened, that would be based on 

findings that we would first make in our draft environmental impact statement. 

Mr. GILCHREST. Has that been made? That has not been made 

yet. 

Mr. HOFFMANN. No, that has not been made, and then, ultimately, that will go through public comment, go into a final impact 

statement, and that——

Mr. GILCHREST. But, that’s a pretty big hurdle. If it doesn’t meet 

the remote site, that’s a pretty big hurdle to cross at that point. 

Mr. HOFFMANN. That’s correct. 

Mr. GILCHREST. What is the hurdle that the Governor brought up 

a little earlier about interfering with port traffic, if there is a significant finding that the scheduling of LNG ships does interfere 

with port traffic, how much weight does that bear on this permitting process? 

Mr. HOFFMANN. Well, that’s one more of the burdens that we 

face. It’s our responsibility to assess the environmental effects of 

the Coast Guard’s report to us, the Waterway Suitability Report 

will establish in somewhat of a public format, but also in a security 

sensitive format, what their specific requirements are for safety security zones. 

Mr. GILCHREST. I see. 

Mr. HOFFMANN. And those things go in, you know, we have to 

evaluate the environmental effect of that. 

43

Mr. GILCHREST. Is there any—do you have some idea of the time 

frame before some of these decisions will be made, remote site, the 

safety zone around other ships, is that three months, six months, 

a year? 

Mr. HOFFMANN. I think that normally within 90 days after the 

follow-on, after a preliminary Waterway Suitability Assessment is 

put together, and meetings are held, then a follow-on Waterway 

Suitability Assessment, which is kind of a final, goes to the Coast 

Guard. That’s where they pull together their own expertise in the 

Committee, and I have a long list of Maryland and other agencies 

that were involved in those meetings. 

Mr. GILCHREST. I guess what I’m trying to ask, and maybe the 

Coast Guard, from today til when that is likely to be done, is there 

some sense? 

Mr. HOFFMANN. Normally, 90 days, but I think——

Mr. GILCHREST. From today? 

Mr. HOFFMANN. —right now there is—90 days from when an application was filed. 

Mr. GILCHREST. Oh, I see. 

Mr. HOFFMANN. Which was January, that’s the standard timing 

for the Coast Guard report to us. 

But, the Coast Guard is going to take as much time as it needs 

to do a proper analysis. 

Mr. GILCHREST. So, the Coast Guard does an evaluation of the 

security around an LNG ship, and the Coast Guard is now doing 

that in conjunction with the traffic that comes and goes up the Bay 

into the Port of Baltimore. 

Captain KELLEY. If I may, sir, that is correct. The applicant has 

submitted their Waterway Security——

Mr. GILCHREST. So, from this date forward when will that—when 

will you have an understanding of that? 

Captain KELLEY. When I received the Waterway Suitability Assessment from AES, it did not have as much information in it as 

I required, so I sent a correspondence back to them asking, specifically, for more information. 

Mr. GILCHREST. Does that 90-day period start all over again? 

Captain KELLEY. As I understand it, that would be correct, because I have not accepted what they deem as their Waterway Suitability Assessment. 

Mr. GILCHREST. Could any of these LNG ships go through the 

C&D Canal? 

Captain KELLEY. Could they? 

Mr. GILCHREST. Could they. 

Captain KELLEY. I——

Mr. GILCHREST. What’s the draft requirement for one of these 

LNG ships likely to be? 

Captain KELLEY. I believe that they would not be able to do that 

through the C&D. 

Mr. GILCHREST. Is it because of the draft, or is it because of its 

cargo? 

Captain KELLEY. Initially, I’d say because of draft, and then certainly we would have to weigh the other risks that are involved 

with transport through the C&D. 

44

Mr. GILCHREST. Mr. Hoffmann, under the remote possibility that 

this has been relatively a positive thing from your perspective, and 

the Coast Guard’s perspective, and everybody else, and then moving through, in other words, it meets the remote standard, it 

doesn’t interfere with port traffic, but you did say that there are 

a couple of provisions as far as the permitting process is concerned 

with environmental issues that the state has to issue a permit. 

Mr. HOFFMANN. Yes. 

Mr. GILCHREST. What if the state didn’t issue the permits? 

Mr. HOFFMANN. Well, of course, there’s a couple of things that 

go on there. Under our scheduling authority in the Energy Policy 

Act of 2005, the FERC was responsible for publishing rules on 

scheduling. And, our rules were just done last fall. Our Commission went through a rulemaking process, notice of proposed rulemaking, put together final rules, those rules went into effect on 12/

26 of 2006. What they require is that within 90 days after we complete our final environmental impact statement all other Federal 

authorizations have to be issued. 

If any Federal authorizations aren’t issued, a company, a project 

proponent, would have the right to go and appeal that directly to 

the U.S. Court of Appeals. 

Mr. GILCHREST. There was an LNG or some type of natural gas 

accident, I’m not that familiar with, in January of ‘04 in Algeria. 

If you are familiar with that, can you say what that accident entailed, and how many casualties there were? 

Mr. HOFFMANN. Yes, sir, in fact, I was a member of a DOE/FERC 

group that went over and investigated that accident right after it 

happened. 

There were—what we found out, basically, was that because of 

air intakes into their boiler, there was a spill at that facility, it was 

at Skikda, Algeria, and because of vapors going into the air intakes 

of the boiler there was an explosion in a boiler that created an even 

larger explosion. 

What we have done since then is come back into the U.S., and 

applied that knowledge, and we’ve gone through every facility we 

regulate now, and including these requirements during our cryogenic design review of Sparrows Point or others——

Mr. GILCHREST. So, you would say that that was a design flaw 

rather than negligence, incompetence, or terrorism? 

Mr. HOFFMANN. I would absolutely say it was a design flaw, yes. 

Mr. GILCHREST. I think that’s about it, Mr. Chairman. 

Thank you very much. Thank you, gentlemen. 

Mr. CUMMINGS. Thank you very much. 

How do we guarantee, just before Ms. Mikulski, how do we guarantee that that doesn’t happen here, just following up on what Mr. 

Gilchrest was asking you. 

Mr. HOFFMANN. Sir, we go through these facilities with a fine 

tooth comb. It would take me a long time to walk through the entire—but my testimony goes through to kind of give an idea of how 

we look at every valve, every thermal couple, every sensor in the 

plan, to make sure that if there is a leak or a spill it’s detected before it turns into anything worse. 

Mr. CUMMINGS. Senator Mikulski. 

45

Senator MIKULSKI. Thank you very much, Mr. Chairman, and 

first of all, I think for our dedicated civil servants and Coast Guard 

testifying know that as we ask these questions, and they are tough, 

it’s because we are very much concerned about safety and security, 

as are you. And so, just know, we have nothing but respect for the 

Coast Guard and also, Mr. Hoffmann, for FERC. 

Our job is prevention, prevention, prevention, the prevention of 

an attack, which is the Intel responsibility, but the consequences 

of an attack, and also the safety issues. 

So, with that in mind, what I’m concerned about are the national, as well as the local, consequences of deficiencies in funding 

which enables the Coast Guard to be the Coast Guard semper 

paratus, always prepared, and deficiencies in the regulatory process. So, we want to use Cove Point, Sparrows Point, as a case example to look, not only stand sentry over the safety of our own 

community, but also to look at what are the deficiencies in funding 

and also in the regulatory process. So, I just wanted to lay that 

ground work as we seem so hard hitting, it’s so that at the end of 

the day you can make a sound decision on your permitting process, 

but we can also fulfill our responsibility on safety. 

Let me go to Cove Point, Sparrows Point. My concern is that in 

terms of Cove Point, after the permitting process was done, and remember, you, FERC, issued the permit for Cove Point 30 days after 

9/11, with no national security regulatory mandates. 

We then pushed the Maryland delegation, I, along with Senator 

Sarbanes on the Nuclear Regulatory, on the FBI, on the Coast 

Guard. The Coast Guard then presented a very comprehensive plan 

for Cove Point, while it was also scrambling to create, see, what 

was their job going to be now in the global war against terrorism, 

which was astounding, astounding, to what we were asking the 

Coast Guard to do. 

This has all worked, a partnership with the Coast Guard, the 

state and locals, as you’d say, but also with the private sector, all 

of which have been very good. 

Then we understand that on July of ‘06, the Coast Guard notified 

Dominion, the private sector company, that it could no longer provide waterside security. 

Is that right, Captain Kelley? 

Captain KELLEY. Senator, the letter, basically, instructed Dominion that I believed that they should share responsibility for providing resources for the security, while the vessel is moored at its 

facility. 

Senator MIKULSKI. Well, according to a letter from Dominion, 

they say, ‘‘On July 5th the Coast Guard Captain of the Port ...,’’ 

I believe that was your predecessor? 

Captain KELLEY. On July 5th, that was me, ma’am. 

Senator MIKULSKI. ‘‘... he letter requires that we take on responsibility for waterside security.’’ Now, let’s just stop there. I know 

Dominion has put in the million dollars, as the Ranking Member 

has said, a significant amount of money, but were also then, according to you, Captain Kelley, training the local sheriff, with all 

due respect, to be the Coast Guard by proxy. 

This is an astounding turn of events. Okay? 

46

So, we are asking now the local law enforcement entity to assume responsibility that the Coast Guard did. Now, let me get 

clear on what the Coast Guard has been doing, and then what is 

it delegating, and then ask Sparrows Point. 

Can you just, I’m going to go rat-a-tat-tat, but again, it’s so we 

can get to the bottom. Let’s go to transit up the Bay, which I understand Mr. LaTourette has answered, as a vessel transits up to 

the bay to go to Cove Point you continue to do security sweeps, is 

that what the Coast Guard continues to do? 

Captain KELLEY. Yes, ma’am, we could have the security teams 

remain on board throughout the transit. 

Senator MIKULSKI. Do you or do you not do security sweeps for 

LNG coming to Cove Point? 

Captain KELLEY. We do as based on our risk assessment for each 

vessel entering the port. 

Senator MIKULSKI. Do you provide, as often required, armed escorts to bring an LNG facility to Cove Point? 

Captain KELLEY. Yes, ma’am, however, the vessels are not accompanied all the time throughout their transit. 

Senator MIKULSKI. And, what determines that? 

Captain KELLEY. Again, an assessment of risk. 

Senator MIKULSKI. And, I’ll come back to assessment of risk, because it’s important. 

Then, the Coast Guard enforces the international requirement of 

compliance, so you are doing that. 

Now, that’s what you are doing. Then, how would this then impact Sparrows Point, security sweeps, armed guard escorts coming 

up the Bay, under the Bay Bridge, into the Port of Baltimore? 

Would you do that based on risk assessment? 

Captain KELLEY. Yes, ma’am. 

Senator MIKULSKI. Tell me then, how is risk assessment determined? Is the Coast Guard, both the National Coast Guard, and 

you as the Captain of the Port, which is a big responsibility, are 

you in touch with the—what security agencies are you in touch 

with, and how do you evaluate that risk as to determine the level 

of security sweep and the level of armed guard escort service? 

Captain KELLEY. The first start is the Area Maritime Security 

Committee, which is, that is our collaborative organization 

where——

Senator MIKULSKI. Sir, I’m interested, are you in contact with 

the Department of National Intelligence? Are you in contact with 

the Office of Intelligence at Homeland Security? Are you in contact 

with the FBI and its National Security Division, which is now 

America’s MI5? Are these what you are contact with, and is it 

monthly, daily, hourly, what is the nature of that contact? 

Captain KELLEY. We have threat assessments passed to us virtually every day. Through my Sector Intelligence Officer and our 

Field Intelligence Support time, we are linked in, for example, with 

the Maryland Coordination and Analysis Center here in Baltimore. 

Senator MIKULSKI. But, we are talking about national threats. 

Captain KELLEY. Yes, ma’am, and also——

Senator MIKULSKI. We are not talking about drunk boaters. Tell 

me about the national threats. What national intelligence agencies 

are you in touch with? 

47

Captain KELLEY. Through the Coast Guard’s Intel information 

from them as it pertains to my area of responsibility. 

Senator MIKULSKI. And, that’s what you currently do for Cove 

Point? 

Captain KELLEY. Yes, ma’am. 

Senator MIKULSKI. And, that’s what you would then do with 

Sparrows Point, and depending on this assessment, which is calibrated day by day, and in some instances hour by hour, you determine that? 

Captain KELLEY. That’s correct, and also we have a system of 

maritime security levels that I can establish to control any type of 

response or prevention should a threat manifest itself where I 

think that we need to elevate our security level. 

Senator MIKULSKI. And, elevate, yes, and we don’t need to go 

into those, those, I know, are quite sensitive and we appreciate it. 

Mr. Chairman, I note the red light is on, could I then go to the 

waterside question, because I think we now get, though, the seriousness of transit in the Bay, security sweeps, armed guards if necessary, et cetera. 

Now, let’s go to waterside security. In the area of Cove Point, 

first of all, tell me what is waterside security, and what did you 

provide at Cove Point, and what will you now not provide, and who 

will provide it? So, what is waterside security? 

Captain KELLEY. To start, the waterside security components 

consist of a Coast Guard response boat, and that would be in the 

vicinity of the vessel while it is tied up to the facility. 

Senator MIKULSKI. And, it’s mission? 

Captain KELLEY. And, it’s mission is to intercept and, first of all, 

to deter, to detect, to intercept, identify, and stop, interdict, if you 

would. 

Senator MIKULSKI. Essentially, a water attack. 

Captain KELLEY. A water-borne attack, yes, ma’am. 

Senator MIKULSKI. In other words, a water-borne attack, so you 

have a Coast Guard vessel currently that would be standing sentry, 

so in the event that a Zodiac or something, a charter boat with a 

Stinger missile poised at this site, you would have the authority to 

interdict and take down. 

Captain KELLEY. We would respond to any waterside, waterborne threat. 

Senator MIKULSKI. Right. Well, let’s be clear, we could have a 

boat in the Bay with a Stinger missile. We could have those who 

have other mechanisms for attacks. I mean, this is big deal, it’s the 

port, it’s a nuclear facility, three miles down. 

So now, we are going to ask the sheriff’s department to take that 

on, is that correct? 

Captain KELLEY. Only if they are properly trained and equipped, 

and that they have what I deem are the tools necessary to do the 

job. 

Senator MIKULSKI. Okay, but——

Captain KELLEY. That’s everything from——

Senator MIKULSKI. —we are now asking them to deter a predatory water attack, an attach coming from another vessel in the 

water. 

48

Captain KELLEY. The same as we would of our Coast Guard resources. 

Senator MIKULSKI. Okay, I understand. 

Now, tell me then, what are other waterside security measures? 

Captain KELLEY. From the vessel itself? 

Senator MIKULSKI. You have a list of waterside activity, I’m asking you what have you provided at Cove Point and what now——

Captain KELLEY. In addition to the vessel itself that is on patrol 

while the vessel is at the facility, we also have personnel that are 

there to monitor the transfer operations and also to be on board the 

vessel. 

Senator MIKULSKI. So, you have people on the vessel, and what 

is their mission? 

Captain KELLEY. Mostly, their mission is to make sure that the 

transfer is going on safely and securely, and part of that is focused 

inward toward the facility, as well as some of their focus is outward toward the waterside. 

Senator MIKULSKI. And, that would be then now done by whom? 

Captain KELLEY. Well, it’s done right now by the Coast Guard 

Patrol. 

Senator MIKULSKI. I know, but with the delegation of waterside 

authority, who then would assume that responsibility? 

Captain KELLEY. I maintain the responsibility. 

Senator MIKULSKI. So you will keep that responsibility. 

Captain KELLEY. Yes, ma’am, absolutely so. It is my role as the 

Captain of the Port to ensure the security of that vessel and that 

facility. 

Senator MIKULSKI. Well, that’s quite hard to do. 

Now, tell me then, what do you do at the dock? 

Captain KELLEY. Our——

Senator MIKULSKI. Or the transfer point. 

Captain KELLEY. —our personnel at the transfer point, I have 

the inspectors that are there to observe the transfer, to make sure 

that all the procedures and all the protocols are being——

Senator MIKULSKI. Which also goes to the safety issue, because 

the transfer of LNG could be a vulnerable point in terms of an accident. 

Captain KELLEY. Yes, ma’am. 

Senator MIKULSKI. Isn’t that the most vulnerable point of an accident, Mr. Hoffmann, the transfer? 

Mr. HOFFMANN. It’s certainly one of them when it comes to 

transferring the LNG into the on-shore tanks, yes. 

Senator MIKULSKI. So, do you keep that or do you delegate that? 

Captain KELLEY. I will keep that. 

Senator MIKULSKI. So, you will keep that. 

Captain KELLEY. Really, ma’am, in the case of Cove Point, it’s a 

matter of the Calvert County Sheriffs trained and certified by our 

personnel providing the boat. 

Senator MIKULSKI. The boat. 

Captain KELLEY. And, the personnel. 

Senator MIKULSKI. Okay. 

Captain KELLEY. So, they are in the water along side. 

Senator MIKULSKI. Okay, then this is my last question. In terms 

of Sparrows Point, what then will you provide for Sparrows Point? 

49

We now understand what you’ll provide in terms of the Bay, but 

now you are coming under a Bay Bridge, you are coming into a 

more populated area, you are coming into the port, we are part of 

the Capitol Region, we are part of a high-risk level for homeland 

security as well. 

Now, who is going to provide the boats for the Sparrows Point, 

or has that not yet been determined? 

Captain KELLEY. That has not yet been determined. It will be addressed in the Waterway Suitability Assessment, as well as the 

Waterway Suitability Report. 

Senator MIKULSKI. Okay, and then, who would you ask then to 

provide in the Baltimore maritime waters, because, remember, you 

have Baltimore City, Baltimore County, though it’s literally in Baltimore County Port, as you know as the Captain, a very able, I 

might add, Captain, the port encompasses Baltimore City, Baltimore County and Anne Arundel, with implications up to Harford. 

Who would be the maritime cops on those boat? 

Captain KELLEY. There are two components that I’m looking at 

when I review the Waterway Suitability Assessment. I’m looking at 

the resources that are available in the port right now, and that 

may be anything from the Coast Guard through the various maritime organizations that have law enforcement authority in the 

port. That’s their capability to do it, to enforce any type of security——

Senator MIKULSKI. But, who would do this? Were you going to 

ask the Baltimore County Police to do this? 

Captain KELLEY. I will not ask them to do—them, in particular, 

to do it, it would be incumbent upon the facility and the vessel—

the security—I’m sorry, the facility operator to do that. 

It is my—I maintain——

Senator MIKULSKI. So, you would ask AES to kind of look around 

to see who they’d contract with? 

Captain KELLEY. And, they are doing that as part of their Waterway Suitability Assessment. 

Senator MIKULSKI. I’m not being sarcastic, nor in any way making a deleterious reference to AES, but it could be any company. 

So, the Coast Guard now says to the OES, hey, see what you can 

find out there? 

Captain KELLEY. Actually, what we would be doing is looking at 

each one of the potential enforcers of the security zone, and to 

make sure that they have the authorities, that they have the capabilities, the competencies. 

Senator MIKULSKI. So, it would have to be someone that already 

would come from local government. Number one, they couldn’t do 

it through a private security firm. 

Captain KELLEY. That is correct. Well, I would not—I personally, 

as the Captain of the Port, wouldn’t go that way. My emphasis 

would be on making sure that there are authorities there, competencies, capabilities, and then certainly that I certify them. 

Senator MIKULSKI. An ongoing certification. 

Captain KELLEY. And, they are operating under my tactical control. 

Senator MIKULSKI. Well, I know the Chairman has been more 

than generous with his time, my last question is this, was this deVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
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cision to delegate this authority at Cove Point a policy decision or 

was it based on a budget decision? 

Captain KELLEY. It was a policy decision. 

Senator MIKULSKI. And, who made that policy decision? 

Captain KELLEY. In the case of the Cove Point, it was my decision here locally, but it is part of our overall scheme. 

Admiral SALERNO. It is reflective of national policy, Senator, that 

the Coast Guard Captains of the Port would engage with other port 

partners in the enforcement of Coast Guard established security 

zones. It’s burden sharing, it’s a shared Federal, state, local, and 

private sector responsibility. 

Senator MIKULSKI. Well, I think it’s burden shifting, and I think 

it’s burden shifting, and I think it was motivated by the leadership 

of the Coast Guard, because of th shortfalls in their budget, and 

because of the unfunded mandates that we have given you, the 

United States Coast Guard, to stand sentry over our ports, our borders and so on. 

I think you do a fantastic job. I really do, and we want to be with 

you, and I think we have to assess the budgetary situations, because I think now budget is driving policy, rather than policy driving budget. 

Mr. Chairman, that concludes my questions. 

Mr. CUMMINGS. Let me, just before we let you all go, let me just 

say this, that our concerns, I mean, I think the line of questioning 

of Ms. Mikulski is very clear, it goes to my major concern. I assume 

that when this Cove Point situation first came up the Coast Guard 

had agreed to do certain things, is that right, with regard to security? 

Captain KELLEY. Yes, sir. 

Mr. CUMMINGS. And, there came a point in time when that 

changed, is that correct? In other words, you changed some of the 

things that you were taking responsibility for. Let me put it like 

this. You brought in the Sheriff’s office, and so other folk were 

doing some of the things that you would normally be—that you had 

agreed to do from the very beginning, is that accurate? 

Captain KELLEY. Actually, sir, I believe it was more the facility 

themselves that reached out to Calvert County, to see if they would 

be interested in assisting them, obviously, for reimbursement for 

their costs, and that’s where Calvert County said, yes, they would 

be interested in doing that. 

Mr. CUMMINGS. So, in other words, the Coast Guard was not 

doing all the things that the Sheriff’s office is doing now, is that 

correct? 

Captain KELLEY. The Coast Guard is doing everything that we 

are expected—the level of security that we are providing right now 

would be supplemented——

Mr. CUMMINGS. I think——

Captain KELLEY. —by the Calvert County Sheriff’s office. 

Mr. CUMMINGS. —but this goes to my concern. We saw in deepwater that, and we’re seeing it every day, that the Coast guard 

wants to do a lot of wonderful, great things, and the Coast Guard 

has been asked to do a whole lot of things, and the Coast Guard 

has said, we can do these things, but because of that stretching 

that I talked about a little bit earlier these things are not necVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
51

essarily being done the way I think even the Coast Guard would 

want them done, as was evidenced by testimony in our deepwater 

hearing just last week. 

And, I just think that we’ve got to at some point, we have a situation where we are post 9/11 now, and if people are looking, I think 

Senator Mikulski used the term, which I wish I had invented, she 

calls it targets of opportunity, but she’s right. We’ve got targets of 

opportunity, and if we look at what happened on 9/11, no one 

would have ever thought that someone would be flying a plane into 

a building. And, here we have this situation, which I think is probably, not probably, it is, has potential for a worse situation. I say 

this also to you, Mr. Hoffmann, and I just, you know, I want to 

make sure that we are not still stuck in the pre-9/11 mind set, because this is post 9/11, and I think we just have to have an over 

abundance, a tremendous abundance of caution, and we have to assume for the worse. 

Sadly, when we assume for the worse, it may be a little bit more 

costly, but we now have to synchronize, try to find a way to synchronize, Senator Mikulski, the duties of the Coast Guard and 

what you’ve been asked to do with the money and the resources 

that you need to do them, we’ve got to synchronize the two, because 

to be frank with you, to me, not right now, they are not synchronized. 

And so, thank you all very much. 

Mr. LATOURETTE. Mr. Chairman. 

Mr. CUMMINGS. I’m sorry. 

Mr. LaTourette. 

Mr. LATOURETTE. Thank you, just a couple observations on this 

last series of points, because I think it’s important. 

Captain Kelley, I don’t want anybody to leave this room thinking 

you’ve gone out on a lark, and it’s my understanding that under 

the Maritime Transportation Security Act of 2002, which the Coast 

Guard has jurisdiction to administer, that each shore-side facility 

is required to develop and implement a detailed facility security 

plan that designates the facility security officer, and outlines actions to be taken to respond to a potential security incident. Is that 

your understanding as well? 

Captain KELLEY. Yes, sir, that is correct. 

Mr. LATOURETTE. It’s also my understanding that the Congress 

amended the Maritime Transportation Security Act of 2002 and 

2004, and those amendments encouraged joint partnerships, similar to the one that you now have with the Calvert County Sheriff’s 

Department, is that your understanding as well? 

Captain KELLEY. That is my understanding. 

Mr. LATOURETTE. And lastly, just so we are clear, are you—how 

long have you been in the Coast Guard, sir? 

Captain KELLEY. I’ve been in the Coast Guard since 1978. 

Mr. LATOURETTE. Are you ever going to sign off on a security 

plan, at Cove Point or anywhere else in the jurisdiction that’s 

under your charge, if you are not convinced that it’s safe? 

Captain KELLEY. I am going to be personally convinced that it is 

safe before I sign off on it. 

Mr. LATOURETTE. Thank you very much. 

Thank you, Mr. Chairman. 

52

Mr. RUPPERSBERGER. Will the Gentleman yield? 

Mr. LATOURETTE. Yes, I’m happy to. 

Mr. RUPPERSBERGER. One question is, but do you have ultimate 

authority on whether or not this is approved? 

Captain KELLEY. I don’t have ultimate authority. However, sir, 

I do, in my Waterway Suitability Report, can deem whether the 

waterway is suitable or not. 

Mr. RUPPERSBERGER. But again, my question, FERC has the ultimate authority, is that your understanding of the process? 

Captain KELLEY. That is my understanding, it would go to 

FERC. 

Mr. RUPPERSBERGER. Thank you. 

Captain KELLEY. My Waterway Suitability Report is submitted 

to FERC for consideration in their environmental impact statement. 

Mr. RUPPERSBERGER. Thank you. 

I yield back. 

Mr. LATOURETTE. And, just taking back my time, to Mr. Hoffmann, can FERC approve a proposal that doesn’t have the water 

suitability, a positive recommendation from the Coast Guard? 

Mr. HOFFMANN. Without a positive recommendation? 

Mr. LATOURETTE. Yes, sir. 

Mr. HOFFMANN. I think if the Waterway Suitability Report from 

the Coast Guard comes in with a negative finding, that would be 

a sign of some serious trouble for any proposal that had that outcome. 

Mr. LATOURETTE. Well then, I know we are in a law school, and 

I don’t want to parse words, but serious problems, does that mean 

it’s dead on arrival, or that means it’s got a bigger hurdle to work 

on? 

Mr. HOFFMANN. Well, I’ve been told I’m allowed to be a historian. 

I can’t be a fortune teller. 

Mr. LATOURETTE. Right. 

Mr. HOFFMANN. So, I can’t tell what our Commission would do, 

but, you know, clearly to me any facility that doesn’t pass muster 

with the Coast Guard, for being determined safe and secure for a 

waterway, the project probably will not go forward. 

Mr. LATOURETTE. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. CUMMINGS. Well, let me, I’ve got to say this. Let me be real 

clear. We’ve got 12, we’ve got 12, 12 new facilities under construction, and I know that each Captain has their jurisdiction, and I understand what Mr. LaTourette just said, but at some point, my 

point is very simple, if you don’t match up, you can do all the planning you want, but if you don’t match up the resources with the 

demand something is going to break. And, we can act like that’s 

not a fact, but it is. 

And, my point is, I understand, and again, I want to be clear, 

nobody is trying to beat up on the Coast Guard, I think the Coast 

Guard is a great organization, we are your biggest fans, but we 

want to make sure that when you get out there you’ve got what 

you need, period, because the only people that we’re fooling is ourselves, I mean, and this goes to national security. This is serious 

business. 

53

And so, what we are trying to do is make sure we match those 

up, and we understand that things are being adjusted in the various areas or whatever, but again, I said we’ve got 12, and we’ve 

got another 20 some where people are making requests. So, we 

can’t just look at this just as a local thing, this is a big—this is the 

United States, this is big picture. 

And so, we are stretching, stretching, stretching, stretching, but 

if the resources aren’t coming in, like as they should, we’ve got a 

problem. 

And, I just hope that you all, when you go back, you’ll give all 

that consideration. 

Mr. RUPPERSBERGER. And, following up on the Chairman’s comments, you heard the testimony here today from the Governor, Senator Mikulski, Jimmy Smith, County Executive, you heard them all 

say that they don’t have the resources, they have other jurisdictions within their counties and their state that they have to take 

care of also from a public safety point of view. 

Are you going to consider their testimony and their position now, 

that they don’t have the money to come in and to provide what’s 

needed? I mean, I read off what happens in Boston every time a 

ship comes up, you have helicopters, you have police, you have to 

shut down bridges, are you going to consider all that when you 

make the recommendation of safety to FERC? 

Captain KELLEY. Yes, sir, that is absolutely one of the main considerations in my review of the Waterway Suitability Assessment, 

and it will be reflected in my report. 

If the capabilities and the capacity to provide security for the 

vessel, for the facility, throughout its transit and while it’s at the 

docks, so to speak, I won’t deem the waterway suitable. 

Mr. RUPPERSBERGER. But, Mr. Hoffmann gave you a lot of authority in this hearing, so I hope you do it well. 

Thank you. 

Mr. CUMMINGS. When is that report coming out, Captain Kelley? 

Captain KELLEY. I replied to AES, based on their initial submission for their Waterway Suitability Assessment, I did not provide 

them with a deadline to provide me with the additional information 

that I asked for. 

So, pending their response to me, is going to be, I guess we start 

the clock again, the 90 day. 

Mr. CUMMINGS. I’m sorry, the last words you said I missed. 

Captain KELLEY. We have a 90-day window within which we 

have to provide the report, based on the Waterway Suitability Assessment. I have sent back correspondence to AES asking for more 

information. 

Mr. CUMMINGS. Very well. 

All right, thank you very much, and thank you for your service, 

we really appreciate all of you. 

Thank you. 

Mr. CUMMINGS. We’ll call our last panel now. Aaron Samson, Mr. 

William Doyle, Dunbar Brooks and Sharon Beazley. 

Thank you all being with us today. We’ll first hear from Mr. 

Aaron Samson, Managing Director of AES. 

54

STATEMENT OF AARON SAMSON, MANAGING DIRECTOR, AES; 

WILLIAM P. DOYLE, DEPUTY GENERAL COUNSEL, MARINE 

ENGINEERS’ BENEFICIAL ASSOCIATION; DUNBAR BROOKS, 

CHAIRMAN, TURNER STATION DEVELOPMENT CORPORATION; SHARON BEAZLEY 

Mr. SAMSON. Thank you, Chairman Cummings and Ranking 

Member LaTourette, and Members of the Committee. My name is 

Aaron Samson. I’m the Managing Director of LNG Projects for the 

AES Corporation. 

AES is one of the world’s largest power companies operating in 

26 countries, with our home offices in Arlington, Virginia. We are 

a good corporate citizen of Maryland today, and operate the only 

clean coal plant in the State of Maryland in Cumberland County. 

AES has proposed to build the LNG import terminal at Sparrows 

Point, in an effort to introduce a new supply of natural gas into the 

Mid-Atlantic Region. 

A summary of my written testimony today will address the need 

for, and alternatives to, the site selection criteria, the safety and 

security, and impacts on port operations. 

To address need, natural gas has become the fuel of choice in 

both the United States and the Mid-Atlantic Region, due to its 

clean burning nature and the efficiency of its use. In order to combat the threat of global warming, increased natural gas use must 

be part of the solution. A modern natural gas plant emits half of 

the greenhouse gas emissions of a modern coal facility. 

This increasing demand, however, is outpacing supply of traditional resources. This demand has been confirmed in the ‘‘Energy 

Transition Report 2007: Maryland’s Energy Future’’ that was prepared for Governor O’Malley in February of 2007. The transition 

report stated natural gas needs for Maryland have grown. Of the 

fossil fuels, natural gas is the cleanest burning for energy generation. Maryland imports over 99 percent of its gas through interstate pipelines, primarily, sourced from the Gulf of Mexico. Supply 

and cost disruptions are possible, as seen in 2005 and 2006, as a 

result of Hurricane Katrina. 

The report went on to say, currently, pipeline capacity is also 

constrained, interstate pipelines that serve Maryland have been 

fully subscribed for several years. 

With regard to LNG, the report said it is unlikely, with the exception of LNG, large increases in gas supply in Maryland will 

occur. 

Additionally, natural gas prices set the price of electricity in the 

State of Maryland over 50 percent of the time. So, not only importing gas will reduce the price of gas, it will also reduce the price of 

electricity in the State of Maryland. 

Any alternative to the proposed LNG terminal at Sparrows Point 

would require the construction of thousands of miles of pipeline to 

provide the equivalent amount of new gas supplies to the Mid-Atlantic Region. This would have a significantly greater environmental impact, would be less reliable than importing the LNG directly to the demand center, and would cost more. 

The AES site selection process included review of land use compatibility, technical and economic feasibility, safety and security, 

land owner environmental impacts, and, primarily, remote siting. 

55

AES considered only locations for the terminal and associated 

LNG transit route that are at all times greater than one mile from 

residential communities and population centers. These guidelines 

are not a requirement of the FERC process, but they are supported 

by the Sandia National Laboratory report and the recently released 

General Accounting Office report that the outer limit of risk to the 

public is, generally, considered to be one mile. 

The additional point I would like to make, there was a lot of talk 

this morning about Cove Point, and in June of 2006 the Maryland 

Power Plant Research Program issued an independent risk assessment on the Cove Point expansion. The Cove Point facility is going 

through a significant expansion currently. That risk assessment 

done of the State of Maryland concluded that the facility would fall 

within a range considered acceptable. It’s important to note that 

the AES terminal is either further from residential areas, and the 

shore-side unloading platform associated with the AES project is 

also further from residential areas than the off-shore unloading 

platform at the Cove Point facility. I’ve included with my written 

testimony aerial photographs of both these facilities. 

One of the other areas that’s been raised concern is that this 

would create a high-value terrorist target. In addressing this, AES 

hired Richard Clarke, former White House Security Advisor to 

three presidents on national security and counter-terrorism. Mr. 

Clarke performed a review of the proposed AES Sparrows Point facility, utilizing the same methodology he was hired for by the Attorney General of Rhode Island to review the proposed facility in 

Providence that was ultimately denied by FERC. Mr. Clarke’s assessment was that he characterized the location as being a low-risk 

level, and concluded that any risk associated with this project can 

be effectively managed. A summary of Mr. Clarke’s findings is also 

included with my written testimony. 

As it relates to impact on the port operations, an important factor considered by AES in siting here was to avoid or minimize disruption to commercial recreational marine traffic while LNG vessels are in transit or at the berth. In a proactive effort to minimize 

this disruption, AES sought the advice and input from the Baltimore Maritime Community, Chesapeake Bay Pilots, the Baltimore 

Tug Operators, and the Maritime Institute of Technology and 

Graduate Studies, MITAGS, located here in Maryland. in fact, numerous real-time ship berthing maneuvers were performed at the 

MITAGS simulator with the assistance of the Bay Pilots and the 

existing Tug Operators. 

These berthing simulations were carried out with the support of 

the three new tractor tugs AES has proposed to add to the Baltimore Tug Fleet to support these LNG operations. 

Current vessel traffic transiting the Chesapeake Bay to the Port 

of Baltimore has significantly decreased in the amount of vessel 

traffic over the past few decades, from a little over 4,000 arrivals 

in 1975 to must over 2,100 ship arrivals in 2005. The AES project 

would introduce approximately 100 to 150 vessels per year into the 

Chesapeake. This modest increase in vessel traffic, compared to 

historical numbers, and the addition of new modern tractor tugs, 

will help maintain the economic health of the Baltimore maritime 

industry. 

56

The security zones that have been discussed significantly today, 

I want to address a number of issues related to the security zones. 

The same Federal regulations that operate to require security 

zones for LNG vessels, because they carry what’s called certain 

dangerous cargo, or CDC, also apply to a number of other vessels 

that transit the Chesapeake today, including petroleum vessels, 

propane ships, and ethanol vessels. The security zones would also 

apply to cruise ships. 

The introduction of additional LNG traffic in the Chesapeake will 

have limited or no impact on existing large vessel traffic in the Bay 

or for vessels calling at the Inner Harbor. Existing ship management protocols utilized by the Maryland Pilots Association would 

ensure that orderly inbound and outbound traffic is not delayed or 

otherwise negatively affected. 

Once at the terminate site, LNG ships would have no impact on 

large vessel traffic, as that traffic would be well outside the established security zones, as they enter the Inner Harbor in the existing shipping lanes. 

LNG shipping in the Chesapeake may cause minor inconveniences to smaller vessel traffic, due to the enforcement of these security zones around the LNG ships. The time interval during which 

the security zone applies at a given point is a function of the ship’s 

size and the ship’s speed. Vessel speeds north of the Bay Bridge average ten to 12 knots, and, therefore, the impact time for recreational boaters for the security zone enforcement is less than four 

minutes, and limited to two to three times a week. 

It’s also important to note that such restrictions would only apply 

to an inbound LNG vessel, and do not apply to an outbound LNG 

vessel in the Chesapeake. 

Mr. CUMMINGS. Mr. Samson, I’m going to have to ask you to 

wrap up. 

Mr. SAMSON. The impact to recreational boaters at the site has 

been talked about also significantly. It’s important to understand 

that when the slower maneuvering operations to berth the ship are 

underway, that that is about a 45-minute evolution, and that boaters can transit to the west side of Ft. Carroll, and that at no time 

will access to Bear Creek be completely cut off during this maneuvering process. 

Thank you. 

Mr. CUMMINGS. Thank you very much. 

Mr. Doyle. 

Mr. DOYLE. Thank you, Chairman Cummings, Ranking Member 

LaTourette, and the rest of the Committee for allowing me to speak 

today. Safe and secure transportation of Liquified Natural Gas to 

the United States is of critical importance, and we all appreciate 

your holding this hearing today. 

My name is William Doyle, and I am Deputy General Counsel of 

the Marine Engineers’ Beneficial Association, and a United States 

Coast Guard Licensed Officer in the Merchant Marine. 

For 137 years MEBA has represented Coast Guard Licensed deck 

and engineering officers serving in the commercial and Government fleets. Despite our presence in nearly every aspect of the maritime industry, there are practically no Americans employed on 

LNG ships today. 

57

The worldwide demand for LNG is increasing at such a tremendous rate it is very difficult for the maritime industry to keep up. 

With this increase in demand for LNG comes an increase in demand for qualified mariners to crew the LNG vessels. 

Currently, there is a worldwide shortage of qualified personnel. 

Keep in mind that this shortage of personnel is based on studies 

conducted in the international foreign flag fleet, and not based on 

what the United States has to offer by way of personnel. 

Anyway, it has gotten so bad in the foreign flag fleet that some 

ship operators have resorted to poaching officers from each other, 

paying as much as $22,000 per month to entice ship-board personnel to switch companies. 

As the size of the world LNG fleet expands, and the qualified 

mariner pool shrinks, there is a major concern that education and 

training standards will suffer. If that happens, the likelihood of an 

accident or incident substantially increases. 

We also know that security is a major concern, particularly, in 

the siting of land-based terminals. MEBA believes that the greatest 

threat to an LNG tanker would come from a knowledgeable crew 

member deliberately sabotaging a vessel. Therefore, we must ensure proper vetting of LNG crews. 

There is no uniform, completely trustworthy system for vetting 

foreign mariners, as this is next to impossible under the current 

system. Background checks of the level of thoroughness cannot be 

conducted on Americans by the United States Coast Guard and the 

Transportation Security Administration are only performed on 

Americans, and not on foreign crews. 

While the Coast Guard does require crew lists from vessels entering U.S. ports, they have no real way to be sure that those foreign crews on board those vessels are who they say they are. U.S. 

Merchant mariners, on the other hand, receive their credentials to 

work from the United States Coast Guard. Foreign seafarers do 

not. U.S. mariners undergo extensive background checks through 

the Federal Bureau of Investigation. Foreign seafarers do not. U.S. 

mariners are vetted through the National Driver Record Database. 

Foreign seamen do not. 

Soon, U.S. mariners will be subject to terrorism background 

checks through the Transportation Security Administration. Foreign seafarers will not. U.S. merchant mariners are U.S. citizens, 

or persons lawfully admitted to the United States for permanent 

residency. The mariners crew on these LNG tankers are not. 

MEBA solutions to these problems is based on common sense 

and very simple to achieve, utilize U.S. crews on LNG vessels calling on U.S. ports, both deepwater and land-based. Americans are 

available, well-trained, economical, and thoroughly vetted. Placing 

U.S. mariners on board these LNG tankers will go a long way to 

ensuring the safety and security and the American public deserves 

nothing less. 

The United States is a leading producer of mariners. Many of the 

state and Federal maritime academies and union training schools 

have added or updated their LNG curriculum. For instance, my 

training facility, the Calhoun MEBA Engineering School, just over 

the Bay Bridge in Easton, Maryland, recently installed a state-ofthe-art vessel and LNG bridge simulator. Right now, MEBA has a 

58

pool of qualified and experienced senior level mariners who are 

ready, willing and able to sail LNG tank vessels. 

With the help of Congress, and the authority given to the Maritime Administration over deepwater ports, MARAD has been able 

to convince some LNG operators to expand their LNG crewing 

practices to include U.S. citizen crews. These companies, Suez 

LNG, Freeport-McMoRan, and Excelerate Energy, must be commended. 

MEBA has recently a Memorandum of Understanding with the 

innovative LNG company Excelerate Energy, that will allow our 

members to sail on their international fleet of LNG tankers and 

worldwide. Excelerate is a company that recognizes the looming 

worldwide shortage of LNG officers, and is doing something to address this shortage before any significant problems arise. 

The risk of an accident or security incident on a vessel servicing 

a deepwater, off-shore LNG terminal is a concern. However, this 

concern pales in comparison to what would happen if there was a 

such an incident, intentional or otherwise, to a land-based LNG 

terminal when more people, property and overall public safety are 

at risk. 

Under current law, the Federal Energy Regulatory Commission 

and the Coast Guard have oversight over the land-based terminal 

permitting process, while the Coast Guard and the U.S. Maritime 

Administration have oversight over the process for deepwater 

ports. 

We feel that it is critical that FERC and the Coast Guard work 

with the operators of land-based terminals to actively encourage or 

require the use of Americans on these vessels in order to advance 

the interests of safety and security. 

We also urge Congress to review the permitting process for landbased terminals, and give the Maritime Administration a similar 

role in the permitting process of land-based terminals as they have 

with deepwater terminals, to ensure that their mission of promoting the U.S. Merchant Marine plays a part in this process. 

Thank you. I’ll take any questions. 

Mr. CUMMINGS. Thank you very much. 

Mr. Brooks. 

Mr. BROOKS. Thank you, Chairman Cummings and Ranking 

Member LaTourette. I want to thank you for allowing me to testify 

for residents of Turner Station, Maryland, regarding the safety and 

security of the LNG facility. 

We are 1.1 miles from this, we are at ground zero for this facility. Because of our close proximity to the facility, and the fact that 

3,000 people in our community have limited egress for evacuation 

in the event of an LNG catastrophe, it necessitates that we have 

a comprehensive plan and highly-detailed safety measures that 

should be developed by LNG facility operators, Federal, state and 

local First Responders, and the Coast Guard. 

Turner Station residents have never been presented by AES or 

any other entity a plan that addresses a comprehensive way for notification or evacuation of our community in the event of a terrorist 

attack or an accident in an LNG facility. 

It was suggested by AES that a horn be sounded at the LNG facility that would somehow warn our residents more than a mile 

59

away. First Responders for the State of Maryland and Baltimore 

County have stated they lack the resources and are incapable of 

dealing with an LNG tanker breach with a vapor cloud and resulting fire. 

The Turner Station residents are opposed to the siting of this facility so close to our neighborhood. We’ve been informed that these 

large LNG tankers that come into the Baltimore Harbor will add 

considerable responsibility to the U.S. Coast Guard mission, and 

will severely strain their already diminished resources. The impact 

of bringing these LNG tankers into the Brewington Channel and 

Bear Creek, and honoring the exclusion zones that must surround 

these ships, will suspend commercial and recreational boating in 

waters just off our shore for extended periods of time. 

The practical effect of permitting this facility means that you 

have 150 super tankers traversing the Chesapeake Bay and the 

mouth of the Baltimore Harbor. This means that on any given day 

there will be a super tanker either coming up the Chesapeake Bay, 

leaving the Chesapeake Bay, or docked, or docking in the 

Brewington Channel. This means that the Coast Guard and other 

Department of Homeland Security personnel must be present on a 

24/7 basis every day of the year in order to marginally protect the 

LNG vessels. 

Our community demands a highly-effective safety and evacuation 

plan. They should be developed, and since it hasn’t been developed, 

for that reason alone the project should be prohibited because it’s 

a terrorist target. 

Irrespective of AES official statements saying that we are safe, 

because there aren’t that many of you, and despite Richard 

Clarke’s and AES’ consultant statement in a February 1, 2007 Baltimore Sun article, in which he stated, ‘‘An operation at Sparrows 

Point would be safe. Terrorists want to kill people, they want to 

kill hundreds of people.’’ That flies in the face of the report that 

was just mentioned, that he did for Rhode Island, in which he 

made this statement in the beginning of the report, ‘‘As to the LNG 

ship, the creation of restrictive waterways around an LNG tanker 

and the use of armed Coast Guard patrol craft, provides little assurance that a determined terrorist group would be stopped before 

attacking the tanker, and with explosive-laden vessels,’’ and in this 

case it was Narraganset Bay, which is home to 1,000 small craft, 

thousands of small crafts. 

He went on to say, ‘‘We are unaware of any analysis performed 

by counter-terrorism experts in the U.S. Government, such as the 

U.S. Special Operations Command, that would demonstrate the 

ability of the Coast Guard and the Rhode Island Police to prevent 

attacks by determined and skilled terrorists, when in either the 

urban off-loading facility and/or the LNG tanker during the 29-mile 

inland waterway transit.’’

The thing that says to us is, this is a perfect description to us 

of our Chesapeake Bay and the dangers that we face, so we are left 

with, what statement are we supposed to believe by Mr. Clarke, 

the one that he says that we are safe or the one in which Rhode 

Island is addressed. 

The Turner Station community is surrounded by industry. The 

northwest portion of our community is less than 1,000 feet from the 

60

Dundalk Marine Terminal. Te Carnegie Plats community, which is 

adjacent to ours, abuts the Dundalk Marine Terminal. Any threats 

to our communities also imperil port operations at the Dundalk 

Marine Terminal. Any cessation of boating traffic in the Chesapeake Bay and the Baltimore Harbor will have a negative effect on 

marine terminal operations. Any LNG related catastrophe or catastrophic event that impacts the residential communities of Turner 

Station, Carnegie Plats or Waters Edge also place in peril private 

and state workers located at the Dundalk Marine Terminal. 

Our communities have been admonished by the AES officials to 

trust the science, but the February, 2007 GAO report entitled, 

‘‘Public Safety Consequence of a Terrorist Attack on Tanker Carrying Liquified Natural Gas,’’ need clarification. It concludes that 

we cannot make wise LNG siting decisions with only the results of 

existing research, such as the Sandia National Laboratory studies. 

The GAO expert panel recommends that further research needs to 

be conducted, and we think that until that research is completed 

that all decisions on LNG siting facility should be halted and that 

Congress get a better understanding of the consequences. 

Our three communities, Turner Station, Carnegie Plats, and Waters Edge, in the event of a catastrophic event and evacuation, all 

converge at a single exit point to leave our peninsula. The prospect 

of 5,000 people within a two-mile range trying to all leave a single 

community at a single exit point is a recipe for disaster, and it demands adequate planning. 

Our community, along with others, have raised the myriad of environmental problems that will emerge associated with the dredging of the Brewington Channel, and from the destruction and the 

disturbance of the Chesapeake Bay aquatic life and a lack of a plan 

to dispose of 4 million cubic yards of dredge oil. 

I want to thank the Subcommittee for allowing this testimony on 

behalf of Turner Station residents. We urge you to deliberate carefully and protect our port, which is our livelihood and our lives. 

Thank you. 

Mr. CUMMINGS. As we go to Ms. Beazley, I want to thank you, 

Mr. Brooks and Ms. Beazley, for your leadership, and I want to 

thank all the community members who have come out here today, 

and you are standing up, not just for yourselves, but for those who 

live around you. And, as someone said to me outside, for generations yet unborn. 

Mr. BROOKS. That’s right. 

Mr. CUMMINGS. And, we really do appreciate your leadership. We 

know it’s taken a phenomenal amount of your time, but we really 

do thank you. 

Ms. Beazley. 

Ms. BEAZLEY. First of all, last night when I was thinking about 

coming here, I thought to myself, you sit down to your computer 

and you are going to write something, you want to make sure that 

you get—do the best that you can possibly do, because you have 

tens of thousands of people depending on you. That’s the position 

that I found myself in over the last 18 months. 

And, finding myself in that position, I thought that I had to come 

here today and educate, because when I started this process with 

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community leaders 18 months ago I understood that it was an education process. 

Well, I ripped up everything I was going to say. I filed it away, 

because today I’m proud, I’m proud of all of you that sit up there. 

I’m very touched. I don’t have to educate you. Everything that I 

was going to say, a lot of what I’m going to say, I’m going to add 

some things, but I am so proud to be from a community that has 

been as proactive as our community has been. 

I will tell you that we are the only community in the United 

States that got together, and when we learned we educated each 

other, we knew that we needed a voice, we needed a voice in 

FERC. 

So, how many communities could organize, get together, and put 

together a 4,000 plus comprehensive EIS? I sat in a room day after 

day, week after week, and I watched hundreds of volunteers who 

brought their special talent forward, and we sat there, these kind 

of documents would cost millions of dollars, we had zero dollars, 

but we had lots of passion, lots of heart, and lots of determination. 

We put this EIS together, and when FERC came to our community we presented it, because you know what we didn’t want to 

have happen, we didn’t—you talk about terrorism, we do feel—

we’ve already experienced terrorism. We’ve been terrorized by Corporate America. They’ve come in, they’ve said we know best, you 

don’t, you’ve lived here forever. I’m sure most of you know that our 

community, most of our mothers, our fathers, our aunts, our uncles, my age have to take care of them today, because Corporate 

America walked out on our community, they took their pensions, 

they took their healthcare. We worked day after day in a mill that 

probably jeopardized our lives. 

The peninsula where this is being proposed, you must understand history to go into the future. What was a peninsula, was an 

island, in 1893 when the steel industry started, was a 500 acre island. Today, it’s registered as a 2,600 acre peninsula, 100 years 

later. Well, guess—God didn’t make that land, guess what made 

that peninsula, that peninsula was created by contaminated toxins, 

the byproducts of the steel industry at a time when there was not 

regulations. 

So, we went from an island to a big peninsula. No one has discussed the geological situation we are faced with. You have a tanker come in, there are three proposed tanks, bulk storage tanks, 

each to hold 40 million gallons, each 40 million gallons has the energy content of 55 Hiroshima bombs. The bottom line is, okay, let’s 

put all of this right here on the peninsula, but what we must remember, ladies and gentlemen, every gallon of that LNG is approximately the weight of eight pounds per gallon. I think we can 

all add, take eight pounds a gallon, multiply it by 40 million three 

times, and then take the weight of the steel, the infrastructure, the 

concrete, the barrier, and tell me that you can safety put that kind 

of weight on a proven filled area that is not stable and is contaminated. That’s one point that no one has brought up. 

The second point is, that site is less than 12 miles from BWI. 

There are many people that can go over there, if you have a license 

you can rent a plane. You can rent a plane, and you can come within couple matter of minutes, how is Homeland Security going to 

62

protect that? Couldn’t protect it with the World Trade Center. You 

can get a private plane and you could fly into that facility. 

Just recently, in 2006, something I want to bring up is that the 

Sandia National Laboratories did come out with a most recent report that was just published in January of 2006, which states, their 

summary, ‘‘A flammable Liquified Natural Gas vapor cloud could 

extend 7.3 miles.’’ This is documented. You have access to it. 

Another point I’d like to bring up is, how about the insurance? 

I have one focus and one focus only, the health, safety and quality 

of life of my people. Now, for 100 years we’ve endured contamination, we’ve endured dumping on Dundalk, and now an industrial 

situation is going—I’m not against LNG, but for God sakes, put it 

off shore, don’t put it near my people. 

Let’s talk, let’s talk about something. You know what, we are 

only a byproduct, we are just—we are passing through. This proposal is passing through our community. BG&E met with me, and 

told me, the people at the top, they would not be buying from AES. 

Secondly, we are a very small state, we have the largest LNG facility already. Not one ounce of this product would be going to our 

community. It would be transported from Sparrows Point to Pennsylvania, to provide energy, LNG, for the northeast. Now, why is 

that our people have to sit here and be terrorized, be in fear and 

anxiety, to provide to others. It’s not that I don’t care about others. 

The bottom line is, there are no advantages. This is ill-conceived, 

and I want to add one more thing. 

AES, there are five Commissioners that decide our fate. Those 

five Commissioners have a lot of power. Someone asked the question today to the Governor, is there something we could do to help 

and change. Absolutely, there is. Congress could do something. The 

Energy Act of 2005, and the present Administration, changed everything, they gave all the power to FERC. I’d like to see there be 

Governor veto power. There needs to be a camaraderie. We don’t 

need to have five people, and I have a concern. When I say we’ve 

been terrorized, I’ve been told by some people, you know, that two 

of the principals of the proposing company are ex-FERC Commissioners, and I was told by somebody smugly one day that it’s you 

know, not what you know, and that these Commissioners, since 

they are principals in the company proposing this, they are exCommissioners, you know, they have their ins in Washington, they 

know the lobbyists, they know this, they know that, and they think 

that we are powerless, and because they know who they know, and 

they have the money they have, that we are just the ant fighting 

Godzilla. Well, you know what, ladies and gentlemen, what I saw 

today here, I saw every Representative we have, I could not thank 

you more, I could not be more proud of you, because we are united, 

you get it, I trust you, and I believe all will be well. 

Thank you. 

Mr. CUMMINGS. Thank you very much. Thank you very much. I 

found your testimony so interesting I didn’t cut you off, and I 

thank you. 

Let me just ask a few questions of you, Mr. Samson. 

What other LNG terminals does AES operate in the United 

States? 

63

Mr. SAMSON. AES doesn’t operate any LNG terminals in the 

United States. We own and operate the LNG terminal and co-located gas fired power plant in the Dominican Republic. 

Mr. CUMMINGS. So, as far as the United States, this is new for 

you then, is that right? As far as the United States is concerned. 

Mr. SAMSON. As far as the United States, we don’t own an LNG 

facility. You have to remember there’s less than 50 of these in the 

world. 

Mr. CUMMINGS. Right. 

Mr. SAMSON. So, when you look at the corporate entities that actually own them, it’s a very small list. 

Mr. CUMMINGS. Okay. In the event of an accident at Sparrows 

Point, what provisions are in place to compensate private property 

owners and those who may suffer injuries and those who sadly 

might perish? 

Mr. SAMSON. It’s a very difficult question to pose, in the fact that 

it will, one, depend on what is the cause of that incident, whether 

or not it’s a facility incident, whether it was a negligent incident, 

whether it was a terrorism attack incident, whether it was an incident affecting the ship and, therefore, ship owners may be in the 

liability chain, and so forth. 

But——

Mr. CUMMINGS. I mean, are there insurance policies and things 

of that nature, I assume? 

Mr. SAMSON. Clearly, the facility will have what would be characterized as fairly massive general liability policies for claims 

against such an event. 

Mr. CUMMINGS. And, are costs associated with a major accident 

at Sparrows Point likely to be left to property owners? In other 

words, the problems, the costs of addressing it, or even state or 

local government? In other words, if there are problems, you know, 

I just heard some testimony a little while ago, and I don’t know 

how accurate this is, that said, I forget who said it, that, I think 

it was Jim Smith, the County Executive, amongst others, said that 

the way you deal with the fire is you just kind of let it burn out, 

and the question I guess is, what happens in the process of the fire 

burning out? 

Mr. SAMSON. Well, I mean, there’s two things about that you 

need to take into account. One is, we have cited this, whether it’s 

the Sandia study or the General Accounting Office, the experts in 

the world are, basically, in general agreement, or strong agreement, that a mile is the outer impact of a potential second degree 

burn within 30 seconds. That doesn’t mean anything gets ignited 

at that distance. That means if you don’t have your shirt sleeve 

covering your arm, your arm could get burned. It doesn’t mean 

your arm will start on fire, it doesn’t mean your house or your community will start on fire at those distances. 

And secondly, the amount of time that we’re involved here, when 

you look at the Sandia study, and you look at this worse case 

event, and the theory that you let it burn out, this event in order 

to reach out a mile has to be such a sequence of things happening 

all at the same instant, it lasts for less than ten minutes. There’s 

not an evacuation issue here. There will be an emergency response 

plan as part of the FERC process, and reviewed through the FedVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00075 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
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eral and local agencies, but we are talking about the scenario that 

can possibly reach a mile of heat, not flame, not igniting houses, 

and last less than ten minutes. 

Mr. CUMMINGS. Well, I hope that it never happens, but to that 

person who it might affect, it’s a major problem, it would be a 

major problem. 

Mr. SAMSON. I agree. 

Mr. CUMMINGS. Yes. 

Let me ask you this. I found that if you go back to what Ms. 

Beazley said, very interesting testimony about—and I’d ask a question in regard to this, this whole question of all of this material 

being dumped by Bethlehem Steel over the years, and I’m just 

wondering, you all have a program to recycle in the case of dredging, is that right? 

Mr. SAMSON. Yes. 

Mr. CUMMINGS. And, to kind of—could you describe that program 

and what the cost would be associated with that? 

Mr. SAMSON. Well, the program will, basically, take the dredge 

material, categorize it, depending on the potential contaminants in 

it. So, if you look at the first two or three feet of sediments that 

have built up in these areas over time they may have some level 

of contamination in it. 

As part of the FERC process and the application process, we’ve 

done extensive borings and have, basically determined, as the state 

also has followed behind us with additional borings, that the potential dredge spoils here in the upper areas are no different than is 

dredged from the Baltimore area now. So, this upper area may 

have some level of contamination. 

Because we are at an older shipyard, we are actually dredging 

into newer material that is expected to be very clean, and, therefore, what that can be recycled for will be different than the upper 

layers, and, basically, the recycling program can be mine reclamation, it can be parking lot base, where you take this material, you 

dry it, you add Portland cement to it. 

As it relates to cost, it’s an expensive process, and dramatically 

more expense than the $2.00 a ton disposal fee at a Hart-Miller Island disposal facility, that we understand and have committed we 

are not going to utilize port administration disposal sites. So, we 

are talking about, on a good day, we are hoping that could be 

$20.00 a ton, $20.00 a yard, as high as $30.00 a yard. So, you are 

talking about an overall impact to this project of $80 to $120 million. 

Mr. CUMMINGS. What types of physical assailants could the LNG 

storage tanks withstand? You know, one of the things that we are 

concerned about, I mean Mr. LaTourette made a very, I think pretty accurate statement that it’s one thing to be concerned about the 

storage itself, it’s another thing to worry about attacks. And, I’m 

just wondering what—just where you are on that. 

Mr. SAMSON. Well, I think——

Mr. CUMMINGS. And, what things did you all take into consideration? You’ve heard the witnesses talk about their concerns. 

Mr. SAMSON. —and I have. 

Mr. CUMMINGS. And, I know you don’t live within one of these 

situations, but they do, and you have to understand that their frusVerDate 0ct 09 2002 16:01 Nov 13, 2007 Jkt 000000 PO 00000 Frm 00076 Fmt 6633 Sfmt 6633 P:\DOCS\35913 HTRANS1 PsN: JASON
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tration is great because they realize, I think Ms. Beazley said it 

best, the big companies come in, they do their thing, and they still 

have to raise their children, and live, and play, and work, and go 

to church in these communities. 

Mr. SAMSON. I understand that, Chairman. 

Mr. CUMMINGS. You don’t plan to live there, do you? 

Mr. SAMSON. I actually proposed one of these less than a mile 

from my house. 

Mr. CUMMINGS. Okay. 

Mr. SAMSON. So, I mean, I do understand it, and maybe it’s my 

belief in the science and the technology. 

Mr. CUMMINGS. Where is that, where would that one be? 

Mr. SAMSON. In Haddam Neck, Connecticut. 

Mr. CUMMINGS. Okay. 

Mr. SAMSON. So, I—you know, maybe I’m foolish, but I believe 

in the science and the technology, and as it relates to the shoreside facilities, I think the risk and the worry that people have is 

not at the shore-side facilities as much as it is the ship, because 

if you put a hole in a ship it’s leaking into an infinite heat sink 

that will very rapidly cause that LNG to become a gas cloud. 

On shore, LNG leaking on shore will rapidly freeze the ground, 

lose its ability to gain heat, and very quickly stop vaporizing. 

The LNG tanks proposed at Sparrows Point are dramatically different than the ones that are at Cove Point today and the ones that 

are here in Baltimore. So, there’s three types of LNG tanks, this 

is a third generation of LNG tank, where the secondary containment isn’t on earth and berm if there’s a tank failure, when FERC 

talked about the exclusion zones that the tank failed and filled it’s 

earth and burned, and, therefore, that contained pond was on fire. 

Here, our secondary containment is a concrete outer wall, so that 

these tanks are inner tank with insulation, an outer carbon tank, 

and then up to the three foot of concrete, and the dome on this 

tank is also concrete. So, this is a third generation LNG tank, dramatically more safe from any type of missile attack that makes any 

sense, or even small aircraft attack. 

Mr. CUMMINGS. Now, what kind of security are you all planning 

for Sparrows Point, if any? 

Mr. SAMSON. Well, an overall security plan will have to be put 

in place that satisfies FERC and the various Federal agencies that 

will be involved in that, and it will include a number of high-tech 

components, most of which won’t get talked in hearings like this, 

including both in water and out of water surveillance and 24-hour 

manned security. 

Mr. CUMMINGS. Mr. LaTourette. 

Mr. LATOURETTE. Thank you very much, Mr. Chairman. 

Mr. Doyle, I want to start with you and thank you and members 

of your organization for reaching agreements with at least a couple 

of shippers in this regard, and I think that Richard Clarke, who 

has been quoted a couple times here at today’s hearing, I think he 

wrote a book and talks about a terrorist riding in on an LNG ship, 

and that’s how we would reach this conclusion. 

So, I would encourage you at MEBA to continue reaching out to 

operators and replacing foreign sailors with certified U.S. American 

mariners. 

66

And, just a short commercial, I would commend to you a piece 

of legislation that I’ve introduced on merchant mariner 

credentialing, and anything you could do to sort of shove the new 

Majority to give us a hand on getting your credentials quicker we 

would be very grateful for your support. 

And, Mr. Brooks, you quoted Mr. Clarke twice, and I know in 

this instance at Sparrows Point he’s the consultant who was retained by AES, and in the Rhode Island situation, who was writing 

the check for his evaluation? 

Mr. BROOKS. It’s, the firm was Good Harbor Consulting, LLC, it 

was for the Attorney General of Rhode Island. 

Mr. LATOURETTE. Okay. So, in this instance he found Sparrows 

Point to be a safe location, and he was retained by the gas company, and there he was retained by someone who didn’t want the 

Rhode Island facility, is that a fair observation? 

Mr. BROOKS. Well, I’m only going by the observations that he 

made that raised the concern with us, because we also had a statewide task force that looked at this document, and we wanted, we 

actually asked for a similar document and a study to be conducted 

in Maryland, I don’t know if Mr. Clarke would have been the principal investigator on that one, though. 

Mr. LATOURETTE. I got you, and I’m not casting aspersions at 

Mr. Clarke, but like the Chairman, and I don’t know who else, I 

practiced law for a number of years, and I always found that when 

I was retaining an expert, if I was paying——

Mr. BROOKS. You get what you pay for. 

Mr. LATOURETTE. —well, if I was retaining the expert they always seemed to say what I wanted them to say, and vice versa. 

And, let me make this observation, because I have a nuclear 

power plant in my district, and actually my house, it’s not very 

comforting when you talk about evacuation routes and things like 

that, my house is in the kill zone, and that, you know, as a homeowner, and as a father, that really doesn’t bring you a lot of comfort, that you are in the kill zone. 

But, I come to these discussions because, again, it’s my experience that everybody wants gasoline to be $1.00, everybody wants 

to heat their home in the wintertime for, you know, $40.00 or 

$50.00, but nobody wants it where they live. And, I sort of differentiate between facilities that you move to and facilities that move 

to you. You know, we have a lot of railroad tracks, for instance, 

and I remember a constituent called me up and said, man, I hate 

the train noise, can’t you do something about that? 

And, I said, well, when did you buy the house? 

He said, last year. 

And, I said, well, wasn’t the train track there when you bought 

the house? 

I do think that there’s a different standard, and that’s why, Mr. 

Samson, when I come to you I think that there is a different standard that when you are talking about going into a neighborhood and 

constructing a new facility, that maybe there’s a requirement that 

more be done. 

And, having said that, I have, based upon my knowledge of the 

industry, I think LNG technology is safe, and I have attempted to 

say during the course of this hearing a couple of times, that I think 

67

the greater risk is the terrorist riding in on the boat, is the person, 

as Ms. Beazley has suggested, rents the airplane at BWI and flies 

it into the facility, and the bigger risk from this technology are people that don’t want to—don’t wish us well. 

And, on that, I heard you, in response to the Chairman’s question about, we did learn from a previous panel that the state does 

retain authority under the Clean Water Act to issue the 401 permit, and I think the only change that the Energy Act of 2005 made 

was that it indicates that if the state improperly withholds that 

you can go to court and sue them and we’ll figure out whether it’s 

been improperly withheld. 

And, I was interested in your comment about borings. Are those 

borings that you’ve taken of the sediments, are they proprietary, or 

are those things that the company could provide to the Subcommittee? 

Mr. SAMSON. We can provide those to the Subcommittee. They 

are publicly available. 

Mr. LATOURETTE. Okay, and since I’m not smart enough to go 

get them where they currently are, could you maybe get them to 

the Subcommittee? 

Mr. SAMSON. We’ll send them to you. 

Mr. LATOURETTE. And then, the reason that I bring this up is, 

again, Ms. Beazley, I’m not familiar with the Republic Steel operation, but I live, you are going to want to think nobody is going 

to want to go where I live, because we not only have a nuclear 

power plant, but we also have, we are one of the areas of concern 

in the Great Lakes Contaminated Sediments, it’s taken us 35 years 

to put this first shovel in the ground, and the problem is, once you 

stick that shovel in the ground the PCBs, or the metals, or whatever happen to be in that muck, got up, and they get turned 

around, and in my case it’s Lake Erie. 

And so, if you could provide those borings, I think that that 

would be interesting, and I think that sometimes these dredging 

projects are a little more complicated than we think. I mean, in our 

case we had to build a facility, containment facility, that’s the size 

of five football fields, because you can’t put it anywhere else. 

But, the question I want to ask you, and it was hit upon a little 

bit by Mr. Brooks and Ms. Beazley, the evacuation route, and 

again, I sort of approach this the same way, there’s a nuclear 

power plant up in New York called Indian Point, and there’s a big 

brew-ha-ha now that the people that live near Indian Point are 

saying, you know what, there’s no proper evacuation route in case 

something, God forbid, should happen. 

And, using my own, you know, shame on you if you move close 

to something, when you sort of peel back the onion you find out 

that the plant was here, and everybody—these developers just 

build right up to the plant, so it really shouldn’t surprise you that 

there’s a problem with the evacuation route. 

I thought I heard one or both of these witnesses indicate that if 

there is a problem at this proposed site at Sparrows Point, that 

there’s no way for these folks to get out of town. Is that right? 

Mr. SAMSON. I think one, we would disagree, we think there’s 

two routes out of the different communities involved, and secondly, 

I want to get back to, this isn’t a new facility, and that in this 

68

worst case accident that there’s three tanks ruptured, and that the 

heat can reach out a mile, this event isn’t long lasting. There’s not 

an oil sheen left on the water when LNG is done burning. 

Mr. LATOURETTE. Right. 

Mr. SAMSON. It is over in under ten minutes, so that, for this 

heat to actually reach that far, all of it has got to get consumed 

in ten minutes for that flame that’s burning in a 500-meter pool 

to reach that far. 

So, it’s not that we ignore evacuation——

Mr. LATOURETTE. Right. 

Mr. SAMSON. — that in the worst case scenario it’s over before 

anybody gets to their car. 

Mr. LATOURETTE. Well, and let me ask you, because my knowledge is not as intense as maybe it should be on LNG, and I don’t 

think that LNG catching on fire is the big problem. I mean, is it 

not, and you can correct me if I’m wrong, I think the big problem 

with LNG is that when there’s a rupture, and the cloud happens, 

if there’s an ignition point outside, not caused by, you know, the 

puncture, whatever punctures the tank, that if the cloud is ignited, 

that that’s really the problem. Is that not right? 

Mr. SAMSON. It’s potentially a bigger problem, correct. 

Mr. LATOURETTE. Right. 

Mr. SAMSON. There’s also, one, that front movement of that flame 

is going to hit an ignition source and then rapidly burn back to the 

pool and turn back into the pool fire, where we were discussing a 

minute ago. 

So, an LNG, when it is initially vaporized, is lighter than air, but 

unlike propane in your backyard grill, this product is lighter than 

air when it is warmer than -160 degrees, so then it rises and dissipates into the atmosphere. So, there is multiple issues that could 

happen with a vapor cloud, all of which are extremely unlikely in 

the event that it’s going to generate the event. 

So, a vapor cloud that comes from a collision-type leak, which 

has never occurred in the LNG industry, and it’s not that LNG 

ships haven’t had collisions, an LNG ship hit the Rock of Gibralter 

at maximum speed and didn’t leak a drop of LNG, but a vapor 

cloud of the concern you are talking about would come from the 

same type of terrorist act that didn’t create an ignition source. 

And, if you, you know, the GAO report makes it clear that everybody in the scientific body agrees that this is an extremely unlikely 

and not the issue to be dealt with in potential LNG terrorist attacks. 

Mr. LATOURETTE. I think the last question is that, if all the 

things are in place in terms of safety, security, the science and so 

forth and so on, that in your testimony, why are these folks still 

upset? 

Mr. SAMSON. You know, we are a big power company, and we get 

crowds not this big, but we get crowds when we put up wind turbines, all right, big energy infrastructure projects, affecting land, 

affecting people’s perceived rights, are always emotional issues. 

LNG is new, all right, we import 60 percent of our oil, but until 

recently we haven’t had to import natural gas. So, it’s not well understood, and it’s new, and in a post 9/11 world it’s a very emotional issue. 

69

That’s why we have science, process and procedure. 

Mr. LATOURETTE. Do you think from a company standpoint, if 

the Chairman will let me have this last question, from a company 

standpoint you’ve done everything you can to go into these communities and talk to them? I mean, I heard the guy from the county 

say that he’s heard, you know, well, 2,000 people, 4,000, who cares, 

I mean, it’s only 2,000. I mean, that hasn’t been the attitude of 

your company, has it? And, have you done what you are supposed 

to be doing with these folks, to allay the concerns that you are talking about? 

Mr. SAMSON. Absolutely. I think that we, you know, we have a 

mandatory pre-filing process at FERC, we were in the community 

six months before that process started. We met with every government official that this district is in before we started the process. 

Did we have the unfortunate of deciding to proceed forward in 

an election year in Maryland that affected some of this? Sure we 

did, but the need is here, and these things take a long time to 

bring on line. 

There may be 12 of them approved and heading into construction, none of them are serving market areas. There’s a difference 

between building an LNG terminal in the Gulf of Mexico and building thousands of miles of pipeline, than bringing it to the area it’s 

going to be used in. 

Mr. LATOURETTE. Thank you, Mr. Chairman. 

Mr. CUMMINGS. Mr. Ruppersberger. 

Mr. RUPPERSBERGER. Sure, thank you. 

Well, first, let me address the issue on the response to the communities. Those of us up here, I think, have been in politics for 

over 20 years, and there are a lot of groups that do not like change, 

I agree with you. 

When this first came to the table, the community came to me 

and said, we demand you be against this. And, I said, I’m not going 

to take a position until I do my own research. I went to Congressional Research that we have available to us in Congress, and 

asked them about the issue of safety, and they felt that in the end 

that a facility such as this should not be near residential areas, it 

should be in more remote places. At that point, I decided that I was 

going to be, you know, against this facility. 

And, I do want to respond to the issue of this community, and 

Sharon Beazley is here with Dunbar Brooks, who I’ve worked with 

for over 20 years on education issues and everything else, and this 

community, when they came to me, I said to them, you are not 

going to win this issue on a emotion, and how many people are 

there, or how many signs, or whatever, you are going to win it 

based on the facts and you’ve got to get your arguments together. 

And, if you can hear what the testimony they gave today, they 

got out and they got people together, they had people assigned to 

different committees, and they got their facts, and I think those 

facts were well presented, and it’s helped me and other people 

move forward in this process. 

And so, I want to make sure that the record is clear, we use it 

sometimes in politics, sometimes people become CAVEs, citizens 

against virtually everything, this is not this group. They’ve done 

70

their homework, they are not emotional, and they are factually correct. 

Now, let me get into some of the issues, Mr. Samson. How long, 

how many LNG facilities do you operate in the world, not in the 

United States, I heard one, is it? 

Mr. SAMSON. One. 

Mr. RUPPERSBERGER. One, now how long have you operated that 

facility? 

Mr. SAMSON. Since 2003. 

Mr. RUPPERSBERGER. All right, do you have any safety record one 

way or another? Are there regulatory groups in the Dominican Republic who oversee you? 

Mr. SAMSON. There’s no incidents at the facility. 

Mr. RUPPERSBERGER. Are there any—do they have a regulatory 

operation in Dominican Republic that deals with your LNG facility? 

Mr. SAMSON. They have an environmental regulatory agency, 

plus they have their public works agencies that regulate both propane in the country and the LNG. 

Mr. RUPPERSBERGER. How many jobs do you generate for Dominican Republic in this facility? 

Mr. SAMSON. In this facility? I would say, it’s a facility that’s colocated with a combined cycle power plant, so the number is probably around 35 or 40. 

Mr. RUPPERSBERGER. It’s fair to say, basically, you don’t have a 

lot of experience, one facility since 2003, in managing LNG facilities. 

Mr. SAMSON. I would think compared to most companies in the 

world, including energy companies, we have more experience. Shell 

is the biggest exporter of LNG in the world, and they are starting 

up their first import terminal. 

Mr. RUPPERSBERGER. Where are you going to get your natural 

gas from, what parts of the world? 

Mr. SAMSON. It’s undetermined. We’ll probably contract with a 

number of oil majors that will bring it in from a number of different sources. 

Mr. RUPPERSBERGER. Could it be areas in the Middle East? 

Mr. SAMSON. The Middle East as in? 

Mr. RUPPERSBERGER. I’m just saying, generally, the area. I’m 

going to ask you Africa. I’m going to ask you other spots in the 

world. 

Mr. SAMSON. Well, it could come from, it could come from Africa, 

it could come from Egypt, it could come from Trinidad. Trinidad is 

the largest supplier of LNG in the United States today. It could 

come from Qatar. 

Mr. RUPPERSBERGER. Qatar is very large. Okay. 

Does your company own or operate any tankers that will be 

transporting LNG gas to the United States? 

Mr. SAMSON. No. 

Mr. RUPPERSBERGER. Okay. Do you know, will your tankers 

make one stop, will they stop in other areas on their way to the 

United States? 

Mr. SAMSON. Typically, not. LNG tankers, unlike a lot of tankers, 

do not operate in partial cargo mode. So, they fill up and they 

empty. 

71

Mr. RUPPERSBERGER. Now, do you know what the security is at 

the port of embarkation, where this gas is coming from? 

Mr. SAMSON. I know that part of the Coast Guard’s process is to 

visit and vet the various exporting countries that bring LNG to the 

United States. 

Mr. RUPPERSBERGER. And, do you know if there are any background checks that are being done, or that you will do as it relates 

to the people on the ship? Mr. Latourette raised the issue where 

his concerns were, and do you know if there’s any background 

checks on the people that are on those ships, or do you know what 

the security is on those ships? 

Mr. SAMSON. I will primarily defer to what the Coast Guard’s 

process is, which is to, as part of their arrival notice is to have, not 

only notices of arrival of a ship, but it’s list of its crew members. 

Mr. RUPPERSBERGER. Well, that’s manifest, but let me say this 

to you. The Coast Guard has so much responsibility, I mean, there 

seems to be that if you are going to be in the business you better 

have security at the port of embarkation, based on the issues of 

threats that have been talked about here today. 

Mr. SAMSON. Well, I—Congressman, with all due respect, I 

thought the Coast Guard vetting these would be more appropriate 

than me. It’s not that the company wouldn’t vet, or know the companies, and the security policies, and the procedures they employ 

in order to bring LNG to this facility. 

Any agreement we have drafted or entered into with these companies has the same type of requirements that the Coast Guard 

would require, as far as crew vetting and those kind of things. 

Mr. RUPPERSBERGER. Well, what I’m getting at——

Mr. SAMSON. Actually——

Mr. RUPPERSBERGER. I’m sorry, I want you to finish. 

Mr. SAMSON. I know I actually thought that it would be more 

comforting that the Coast Guard vets these crews than a private 

entity. 

Mr. RUPPERSBERGER. But, I want to get back to your point that 

you’ve been in business since 2003, this is really your first operation other than that, this is big business. There’s a lot of money 

to be made, but part of that business is security. That’s why Dubai 

did so well, and yet, we worked very closely with the Port of Dubai, 

and yet we don’t have the ability to control their people, and who 

are on their ships, and do the background like we do in the United 

States. 

Let me get to Richard Clarke, because that’s been raised here 

today. You know, I know the industry, and AES specifically, have 

engaged Mr. Clarke to tell us that LNG plants, even the one proposed, are safe. Now, is Mr. Clarke paid by you or the LNG industry in general? Do you know that? 

Mr. SAMSON. I don’t think anybody else in the LNG industry has 

engaged Richard Clarke. When we engaged him, his comment to us 

was, you don’t seem to understand, I’m the guy that puts a bullet 

in these projects. We engaged him anyhow. 

As I testified earlier today, AES has a siting policy that says we 

won’t put one of these facilities less than a mile from populations, 

and that is different than the facilities operating and proposed in 

72

the State of Massachusetts, and proposed in Rhode Island, where 

Mr. Clarke’s testimony was against those projects. 

Mr. RUPPERSBERGER. Do you know if Mr. Clarke visited this 

area, this site, and the surrounding communities, when he came to 

his conclusion? 

Mr. SAMSON. I know that Mr. Clarke flew this site, in a helicopter. 

Mr. RUPPERSBERGER. Do you know if he traveled, did he travel 

the path that the tankers would take up the Chesapeake Bay? 

Mr. SAMSON. I know they reviewed the path of the tanker up the 

Chesapeake Bay, and the draft WSA was provided to his firm in 

order to do that. 

Mr. RUPPERSBERGER. Do you know if Mr. Clarke’s or your company received daily intelligence reports, so that you have the absolute most up-to-date security assessment of the region? 

Mr. SAMSON. I know that Mr. Clarke maintains his security 

clearance, what his ability or contacts with the intelligence community, I cannot testify to that. 

Mr. RUPPERSBERGER. Do you know if Mr. Clarke evaluated the 

traffic that travels the Chesapeake Bay on a summer weekend, because it seemed to me that that wasn’t addressed in his report, and 

it seemed, if you’ve heard the testimony today, it’s a very relevant 

security factor. 

Mr. SAMSON. Well, I think it was addressed in his report. 

Mr. RUPPERSBERGER. What did it say? 

Mr. SAMSON. That as far as the impacts on traffic? 

Mr. RUPPERSBERGER. As far as tankers, not just terrorists, but 

safety issues also, about tankers coming under—that have to come 

under the Chesapeake Bay. 

Mr. SAMSON. Well, Mr. Clarke was engaged to analyze potential 

terrorist threat to an LNG ship transiting to or being docked at the 

Sparrows Point facility. 

Mr. RUPPERSBERGER. Do you know if in the report that he addressed the issue of coming from the Atlantic Ocean, up the Chesapeake Bay, past the different urban areas, into Dundalk, do you 

know if he took that route and evaluated the whole route when he 

was coming up the Chesapeake Bay? 

Mr. SAMSON. Yes, he did evaluate the whole route, and it’s important to note that nowhere in that route does an LNG ship come 

within a mile of populations. 

Mr. RUPPERSBERGER. And, you think there’s a big difference between a mile and a mile and a half or two miles? 

Mr. SAMSON. I think that when the vast majority of the scientists 

engaged in this field agree that a mile is the outer limit of the potential heat impact to populations, it’s an appropriate standard. 

Mr. RUPPERSBERGER. You know, you are getting ready to try to 

build this facility, and we hope we can stop it in this site. We understand the issue of energy policy, and those type of situations. Do 

you have a safety plan or standards in place on what you are going 

to do if you get the permission to build this, on how you are going 

to protect your own facility and the community surrounding it? 

Mr. SAMSON. The safety plan is a number of things, and it will 

constantly be an evolving and living document. AES has a tremendous safety record. We may only operate one LNG facility, but we 

73

operate $30 billion of power plant assets, which involve significantly higher risk to our employees around the world. 

So, safety is an ongoing issue. There will be an emergency response plan, as far as this project. There will be safety procedures 

on site. There will be firefighter training. There will be firefighter 

training provided on LNG-specific fires for the county responders 

and our employees. All of those things are part of the process. 

Mr. RUPPERSBERGER. Let me ask you this question. Assuming 

that you have built this after five years, what do you anticipate 

your profit will be, after five years, profit to your company? 

Mr. SAMSON. I can’t tell you that. 

Mr. RUPPERSBERGER. Well, you’ve got some projections or you 

wouldn’t be in business. What do you feel your profits would be 

after one year, five years, ten years? You are in this business, you 

want to build a plant here, what will your profits be? 

Mr. SAMSON. It’s——

Mr. RUPPERSBERGER. I mean, you are talking about capacity, you 

have to put a plan together for that, you are talking about building 

cement tanks, what will your profits be once you’ve built this facility? Probably enormous. 

Mr. SAMSON. —well, you are confusing AES with an oil and gas 

meter. 

Mr. RUPPERSBERGER. Well, I’m just asking you, because what I’m 

getting back to is the issue of, number one, what’s going to be put 

back into the community that won’t even take advantage of this, 

what are your profits, or do you not want to answer that question? 

Mr. SAMSON. I can’t give you a reasonable forecast on what our 

profits will be. 

Mr. RUPPERSBERGER. Is it because you just don’t want to tell us 

in this hearing, or you just don’t know? 

Mr. SAMSON. I just don’t know. 

Mr. RUPPERSBERGER. Then, you are in this business, what would 

you anticipate? What would you guess that your profits would be? 

Mr. SAMSON. I would guess that our profits would be north of 11 

or 12 percent return on investment, or we wouldn’t make the investment. 

Mr. RUPPERSBERGER. Okay, so how much money would that be 

then? 

Mr. SAMSON. All tolled, this investment is going to be in the——

Mr. RUPPERSBERGER. In the billions of dollars, your profit? 

Mr. SAMSON. —close, $800 million. 

Mr. RUPPERSBERGER. And, do you have any plan to put that back 

into the community, the region where you are building this? 

Mr. SAMSON. Well, I think if you understood AES, you’ll understand that we have a great reputation environmentally, a great 

community record. If you go to Cumberland County and ask them 

what they think of AES, they’ll say they put a million dollars into 

our Board of Education alone, they put money into the YMCA 

every year. We are a great corporate citizen, and we’ve demonstrated that here in Maryland, and we’ll do it again. 

Mr. RUPPERSBERGER. You could be all right on that, it just seems 

to me based on the information we have before us, you just picked 

the wrong location. 

Thank you. 

74

Mr. CUMMINGS. As we get ready to close out, just one question, 

Mr. Samson. 

How did environmental justice considerations factor into the 

choice of this site? 

Mr. SAMSON. Well, it’s an interesting issue, environmental justice, which is really routed in environmental impact, and those potential issues as it applies to siting of facilities, and clearly we will 

burn a little bit of our imported natural gas. But, the environmental issues associated with this project aren’t significant, and 

that’s not to say that we’ve ignored the fact that Turner Station is 

our closest community. We’ve been there more than we’ve been 

anywhere else. I’ve had, you know, numerous discussions with 

Dunbar Brooks, and Alison Mason, and the folks in Turner Station, 

and we, you know, are at a point of disagreement. 

And, hopefully, we can get to the point where we are beyond that 

and can find good things to do in that community. But, when you 

go back to our siting premise, and it’s not the remote criteria for 

the facility established by FERC, but it’s, if we are outside of a 

mile, and the scientists of the Nation say that is the outer limit of 

safety, then we may still have a disagreement with Turner Station, 

but we don’t think we’ve impacted that community in a negative 

manner more than any other community adjacent to the facility. 

Mr. CUMMINGS. And, what alternative sites did you evaluate? I 

mean, were there other sites that you evaluated, when looking, 

comparing it to this one, or contrasting it? 

Mr. SAMSON. Yes, and there’s an exhaustive section in the FERC 

filing that deals with, not only specific sites, but process theories, 

could we do an off-shore or not do an off-shore facility to supply 

this market. Other sites up and down the Chesapeake were analyzed. 

Mr. CUMMINGS. Last, but not least, in answer to Mr. 

Ruppersberger’s questions, you were talking about what they 

would say in Cumberland, you know, about putting the million dollars into the school system, I think that’s what you said. One of the 

things that I think that you will find is that there are a lot of people who live in these communities, while, you know, they’d like to 

see good corporate citizenship, they want to make sure that their 

children are able to grow up. I mean, these are real things, these 

are real concerns for them, and I think you—I hope that you don’t 

under-estimate that. 

I mean, I heard you say that you met with folks and whatever, 

but these, I mean, for groups to be able to do what they’ve been 

able to do to come together, to spend all this time today, and hours, 

upon hours, upon hours, of research and whatever to get people, I 

mean, people are busy these days, and then for them to take time 

out of their schedules to do this, and stay on top of it, is phenomenal. 

And, I just hope that you understand that, and I hope that you 

also understand that what our hope is, is to make sure that FERC 

and the Coast Guard provide strict accountability, we are going to 

hold them to a standard of very strict accountability, and that they 

are supposed to do everything they are supposed to do, and if they 

are going outside of those boundaries, which I’m sure they won’t, 

but if they do, we are going to be there. 

75

And, the other thing that we are concerned about is just making 

sure that the Coast Guard has the capacity to do what they say 

they can do. 

Finally, I ask unanimous consent that all Members have five 

days in which to revise and extend their remarks. Without objection, so ordered. 

Ladies and gentlemen, thank you very much. 

[Whereupon, at 2:15 p.m., the Subcommittee was adjourned.]

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