In a letter requested by Sen. John J. Hafer (R-Dist. 1), Maryland Assistant Attorney General William R. Varga stated that he believes legislation introduced to prohibit the construction of operation of LNG Facilities is preempted by federal law.

His opinion addresses SB 996/HB1670, which is specific to Baltimore County, and SB 997/HB 1671, which is applicable statewide.

SB 996/HB1670 would block plans for AES to build a new $400 million storage facility in Baltimore County, on the site of the former Sparrows Point shipyard. The legislation would prohibit the construction or operation of an LNG without the approval of the Public Service Commission (“PSC”) and prohibit the PSC from granting regulatory approval for the construction or operation of a liquefied natural gas facility in Baltimore County that is located within two miles of any residence.

SB 997/HB 1671 similar to the prior bill, but with a statewide scope. This Bill would apply not only to AES’ Sparrows Point project, but it would also apply to Dominion’s Cove Point LNG storage facility and BGE’s Baltimore LNG storage facility, requiring the cessation of operations.

The Maryland Chamber opposes this legislation. The Senate bills will be heard tomorrow, March 22. The financial impact to residential, commercial, and industrial consumers would be tremendous as Maryland would need to import its LNG by pipeline or tanker trucks.

Consumption of LNG is rising in Maryland, and if this State is to meet its future consumption needs, these facilities must be allowed to remain in operation. There are approximately 113 LNG facilities in operation throughout the U.S. Many of these facilities are located within populated areas. Precautions have been taken by the existing facilities in Maryland, which have operated without incident.

In his letter, Assistant Attorney General Vargas states, “To the extent that the proposed legislation requires Public Service Commission approval and restricts the location of a LNG facility within a specified distance of residential property, in my view, the provisions are preempted by federal law.”

To read the full letter, click here.