BALTIMORE (AP) - Dominion Resources is challenging a claim by the Sierra Club, which says it has the right to block the company's plans to export liquefied natural gas from a southern Maryland terminal, the company said Friday.
Dominion said it filed a lawsuit in Calvert County Circuit Court against what it calls an erroneous claim by the environmental group. The company argues an agreement with the Sierra Club over the site specifically permits all activities related to the planned project.
The Sierra Club announced last month that it would try to block the proposal, which it says could result in major damage to the Chesapeake Bay and nearby Calvert Cliffs State Park in Maryland. The company is seeking to export 1 billion cubic feet per day through the terminal 60 miles southeast of Washington.
Virginia-based Dominion said the plain language of the agreement "specifically permits all the activities related to the planned liquefaction project."
Gary L. Sypolt, CEO of the Dominion Energy business unit, said the company has a long history of working with environmental partners at Cove Point.
"Although the Sierra Club has chosen not to work with us in this instance, we are confident we are right and believe the best time to resolve this issue is now," Sypolt said in a statement.
The Sierra Club argues that exports will drive up the cost of domestic natural gas while promoting hydraulic fracturing. The technique involves blasting mixtures of water, sand and chemicals deep underground to stimulate the release of gas. Improvements in the technique have prompted a natural gas boom that has driven U.S. prices to 10-year lows.
Environmental groups and other critics, meanwhile, believe the chemicals have polluted drinking water supplies, but the industry says there is no proof.
Deb Nardone, Beyond Natural Gas campaign director for the Sierra Club, said the environmental group would review the lawsuit and respond.
"We're disappointed and believe that our settlement clearly forbids Dominion's activities and does not allow for export from the Cove Point terminal," Nardone said.
Dominion said exports from the project would reduce the U.S. trade deficit by more than $2.8 billion per year while generating about $1 billion annually in federal, state and local government revenues. The company said that in Calvert County alone, the project could produce additional property tax revenue of up to $40 million per year, making it the county's largest taxpayer.
The fight over the Maryland terminal follows approval earlier this year by federal regulators of the nation's first large-scale natural gas export terminal, a Louisiana facility owned by Cheniere Energy. Several other export proposals are also seeking approval.