A coalition of environmental groups opposed to plans to expand a Calvert County gas plant are now claiming the costly project is on shaky financial ground.
On Wednesday, Dec. 18, the Chesapeake Climate Action Network (CCAN) cited a report released by a research firm that the network claims is evidence Dominion Resources’ $3.8 billion plan to build a liquefaction facility at Cove Point Liquefied Natural Gas (LNG) Plant in Lusby has not secured a 16-year project loan needed to finance a large portion of the construction costs. The report shows as much as 40 percent of the project would be financed by Dominion’s stock and bond holders.
The liquefaction facility would enable Dominion to export natural gas, via its Chesapeake Bay terminal, to consumers in Asia. The press release refers to the project as “socially controversial, legally uncertain and morally objectionable.”
According to CCAN officials, the financial research firm, Profundo, which authored the report, is “widely used and respected.”
“It’s hard to respond to something that’s so false,” said Dominion spokesman Daniel E. Donovan, who provided a link to an analyst’s report issued in March on Dominion’s financial status, including the company’s plan for financing the Cove Point expansion project. The analysis prepared by Glenrock Associates stated “ongoing project earnings and cash flow creates a growing earnings per share stream.”
“The convertible securities have been sold, are listed on the [stock] exchange and are traded regularly, so we have a financing plan,” said Donovan.
“Dominion’s shareholders and potential investors should understand that people all across Maryland see Cove Point as something affecting them in a major negative way through new pipelines, unprecedented carbon pollution,” CCAN Director Mike Tidwell stated in the press release, who labeled the expansion project “this high-profile, high-harm investment.”
Supporters of the Cove Point expansion project have touted the projected tax revenues and creation of jobs as being a potentially huge boost for the local, state and national economy.
The plan continues to travel through the permit process, with major sign-offs from the Federal Energy Regulatory Commission and the Maryland Public Service Commission still pending.