If you haven’t heard about the expansion Dominion is in the process of performing at Cove Point you have probably been hiding under a rock lately. In any case, and even if you have heard of the project here’s the story.
Cove Point was built in the 1970s and since 2002 has been operated by Dominion. Currently, Dominions business includes taking liquefied natural gas (LNG) from tanker ships, storing it, making the liquid into a gaseous state, and then pushing it into the pipeline that connects to the Mid-Atlantic gas transmissions system.
The new business model is essentially this same thing in reverse. Dominion will take gas from the pipeline, liquefy it, and push it to a tanker at the pier. The tankers will then be on their way to markets around the world. It is planned that an average of only 80 ships will visit each year to collect the LNG. Dominion will not be building any new supply pipelines and will be using their existing infrastructure.
Now that we understand what is going to happen three years from now I’ll cover what’s going on in order to get to this point. Dominion has hired IHI/Kiewit to oversee the construction phase of the project.
The construction project is estimated to cost $3.8 billion dollars. While much of the project requires specialty contractors and union labor there is still plenty of opportunity for local businesses to partake in the process.
IHI/Kiewit has setup a website dedicated to the project, OneCovePoint. This site answers lots of common concerns about the project, it allows business/individuals to register as vendors or sub-contractors, and keeps a list of the upcoming bid opportunities.
Once the initial construction is complete Calvert County stands to benefit greatly in the future. According to the 2013 Calvert County Progress report Dominion pays about 15 million dollars in county taxes. Dominion did negotiate a tax break for themselves for the next several years after LNG operations begin. However, once this reduction expires the county stands to get close to 40 million dollars a year.
What are your thoughts on the Dominion Cove Point LNG expansion project? Leave a comment below.
George Frank Jackson says
I think it’s about time we start exporting and not importing from other country’s
Kurtrhoffman says
Comment one – how long is the tax break, and what are the prospects for it getting extended (as in, does it have a built in renegotiation).
Comment two – you fail to mention the environmental differences in reversing the plant functionality; and they are significant.
Comment three – this project does not increase employment in Calvert County, nor do the profits stay in Calvert County, but the environmental risks for a spill will be a burden for Calvert County.
Comment four – the risk of leaks and spills will be greater because of not only the lack of planned changes to existing infrastructure (which is aging and as you said was constructed in the 1970s) but also because of the planned increased volume in content.
Comment five – your article reads like a Dominion press release. If this was supposed to be Calvert-centric why are you not covering the points I just brought up?
Peg Richardson says
How about taking care of the citizens of the United States first before exporting it to other countries.
Rick Stout says
I live in Calvert Co. and I am a retired union electrician,. During my 38 year career I worked at the Cove Point plant several times,along with many other Calvert residents. I also worked at Calvert Cliffs nuclear PP.many times . The idea that Calvert residents don’t benefit from these Plants is ridiculous ! Both Plants number 1 goal is safety, and they pay taxes ! we need to get in on this next economic boom.[no pun intended]
Margo Beall says
I think its a great idea!
Darleen Martin-Hidde says
Judging by the commercial from Mcnelis… the area real estate people are all for it! lol
Kurtrhoffman says
Rick Stout
“The construction project is estimated to cost $3.8 billion dollars.
While much of the project requires specialty contractors and union labor
there is still plenty of opportunity for local businesses to partake in
the process.”
If that is in fact the case then where is the link to partake in the process? That would have actually been something useful in this article.
“Dominion did negotiate a tax break for themselves for the next several years after LNG operations begin.”
Taxes are how Calvert County benefits. What are the terms of this tax break? In an article telling us what everyone needs to know omitting both of those points is significant, as they speak to how Calvert will see any of the profit. What is the nature of that tax break. Every dollar in break they get is money out of Calvert County’s revenue base… and given the far lower cost in repurposing this plant as opposed to building a new one elsewhere there was already a real motivation for Dominion to do so. Why did the pot need sweetened? Especially as every dollar not collected from Dominion means an increase in what we pay in property taxes.
When I said that it does not increase employment in Calvert County I meant that there are no new full time jobs being created as a consequence of the project. Yes, we may see some contact labor, and I am not trying to belittle that… but we may also not see any increased contract labor. Is Dominion targeting hiring local Calvert people before offering the opportunity elsewhere? I doubt it.
As to the next economic boom – it is exactly that that is not being mentioned… This gas is coming from fracking in Virginia; the last thing Maryland needs is fracking, which offers short term profits and long term losses in dealing with the environmental issues afterwards.
Robert Waddell says
350,000 gallons of fresh well water a day. I was having second thoughts about putting in a lawn sprinkler. If we have this much extra well water available I can just leave my hose run year round.
Deborah E. Watson says
It’s a MISTAKE waiting to happen.
yourcalvert says
@Robert Waddell The 250,000 gallons per day quoted definitely seems like a lot but so do power plants and other many other large commercial operations. Sorry, I wasn’t easily able to dig up an exact figures.
yourcalvert says
Kurtrhoffman Rick Stout The link to participate was in the third from the last paragraph for the text OneCovePoint. The full url is http://1covepoint.com. In addition, the project contractor has hosted at least three meetings open to local businesses that wanted more information about the project or for ways to get involved with the project.
I am not aware of the full details of the tax break but I did find the following in an article on dominions website. This is a direct copy of the text and the link to the article is at the bottom.
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The commissioners subsequently voted unanimously to approve the ordinance amendment implementing the tax credit and PILOT authority. According to a county government memo, highlights of the pact are:
In fiscal year 2018 the county will receive $25 million before the new equipment is taxable. This represents consideration for entering into the agreement.
Dominion Cove Point LLC will begin making payments on the expansion equipment when placed in service pursuant to a PILOT agreement. The PILOT will be five years in duration.
The PILOT locks in existing equipment value at $15.1 million for the duration of the PILOT; the value of the existing equipment was projected to decline.
The tax credit would begin upon expiration of the PILOT, providing a 42-percent tax credit, versus the requested 50 percent requested by the Company, on new and repurposed equipment for the next nine years.
”We think it’s our fair share of taxes,” said Dominion spokesman Dan Donovan following the hearing. Donovan also indicated Dominion would be involved in improvements to Cove Point Road.
Source: http://www.dom.com/business/gas-transmission/cove-point/pdf/Baynet-110613.pdf
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Dominion has said that this project will create about 75 new jobs. I have heard that they will look to promote from within first and then look to hire local talent first before looking elsewhere.
I don’t have any idea on how the gas is produced but no fracking is happening in our area; its all coming via pipeline.
yourcalvert says
I guess the United States either produces more natural gas than needed or they are getting a higher price/better contract terms overseas.
yourcalvert says
Kurtrhoffman
1. See reply to your previous comment above.
2. I don’t see this as a major environmental difference for Calvert County. If you see significant differences please share.
3. This project will create about 75 jobs here in Calvert County based on what I have heard. The profits don’t stay in our county but a portion of the taxes sure do. in this regard it is no different than Giant, Safeway, Starbucks, etc.
4. I am sure they do a ton of planning and updating to ensure the infrastructure is up to date and meets standards. In addition, this whole process is highly regulated by the government which involves many inspections.
5. Sorry you feel this way. I try to give as much information as I can without speculating on things I don’t know.