[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
    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

                     U.S. GOVERNMENT PRINTING OFFICE

35-913 PDF                 WASHINGTON DC:  2007
---------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office  Internet: bookstore.gpo.gov Phone: toll free (866)512-1800
DC area (202)512-1800  Fax: (202) 512-2250 Mail Stop SSOP, 
Washington, DC 20402-0001




























             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia    JOHN L. MICA, Florida
PETER A. DeFAZIO, Oregon             DON YOUNG, Alaska
JERRY F. COSTELLO, Illinois          THOMAS E. PETRI, Wisconsin
ELEANOR HOLMES NORTON, District of   HOWARD COBLE, North Carolina
Columbia                             JOHN J. DUNCAN, Jr., Tennessee
JERROLD NADLER, New York             WAYNE T. GILCHREST, Maryland
CORRINE BROWN, Florida               VERNON J. EHLERS, Michigan
BOB FILNER, California               STEVEN C. LaTOURETTE, Ohio
EDDIE BERNICE JOHNSON, Texas         RICHARD H. BAKER, Louisiana
GENE TAYLOR, Mississippi             FRANK A. LoBIONDO, New Jersey
ELIJAH E. CUMMINGS, Maryland         JERRY MORAN, Kansas
ELLEN O. TAUSCHER, California        GARY G. MILLER, California
LEONARD L. BOSWELL, Iowa             ROBIN HAYES, North Carolina
TIM HOLDEN, Pennsylvania             HENRY E. BROWN, Jr., South 
BRIAN BAIRD, Washington              Carolina
RICK LARSEN, Washington              TIMOTHY V. JOHNSON, Illinois
MICHAEL E. CAPUANO, Massachusetts    TODD RUSSELL PLATTS, Pennsylvania
JULIA CARSON, Indiana                SAM GRAVES, Missouri
TIMOTHY H. BISHOP, New York          BILL SHUSTER, Pennsylvania
MICHAEL H. MICHAUD, Maine            JOHN BOOZMAN, Arkansas
BRIAN HIGGINS, New York              SHELLEY MOORE CAPITO, West 
RUSS CARNAHAN, Missouri              Virginia
JOHN T. SALAZAR, Colorado            JIM GERLACH, Pennsylvania
GRACE F. NAPOLITANO, California      MARIO DIAZ-BALART, Florida
DANIEL LIPINSKI, Illinois            CHARLES W. DENT, Pennsylvania
DORIS O. MATSUI, California          TED POE, Texas
NICK LAMPSON, Texas                  DAVID G. REICHERT, Washington
ZACHARY T. SPACE, Ohio               CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              JOHN R. `RANDY' KUHL, Jr., New 
BRUCE L. BRALEY, Iowa                York
JASON ALTMIRE, Pennsylvania          LYNN A WESTMORELAND, Georgia
TIMOTHY J. WALZ, Minnesota           CHARLES W. BOUSTANY, Jr., 
HEATH SHULER, North Carolina         Louisiana
MICHAEL A. ACURI, New York           JEAN SCHMIDT, Ohio
HARRY E. MITCHELL, Arizona           CANDICE S. MILLER, Michigan
CHRISTOPHER P. CARNEY, Pennsylvania  THELMA D. DRAKE, Virginia
JOHN J. HALL, New York               MARY FALLIN, Oklahoma
STEVE KAGEN, Wisconsin               VERN BUCHANAN, Florida
STEVE COHEN, Tennessee
JERRY McNERNEY, California
VACANCY

                                  (ii)

  


        SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

                 ELIJAH E. CUMMINGS, Maryland, Chairman

GENE TAYLOR, Mississippi             STEVEN C. LaTOURETTE, Ohio
RICK LARSEN, Washington              DON YOUNG, Alaska
CORRINE BROWN, Florida               HOWARD COBLE, North Carolina
BRIAN HIGGINS, New York              WAYNE T. GILCHREST, Maryland
BRIAN BAIRD, Washington              FRANK A. LoBIONDO, New Jersey
TIMOTHY H. BISHOP, New York          TED POE, Texas
VACANCY                              JOHN L. MICA, Florida
JAMES L. OBERSTAR, Minnesota           (Ex Officio)
  (Ex Officio)

                                 (iii)





















                                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

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



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.
    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.
    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.
    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 concerns 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 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 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 
high-risk, 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, 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 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.
    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 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 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 
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 renewable forms of energy, diversified portfolios, 
protecting consumers 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 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 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 Coast Guard representative was in attendance at 
that June hearing, 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.
    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 are not longer talking about 
maintenance, you are not longer talking 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 impact 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.
    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 
expected 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 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 
facilities 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?
    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.
    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, 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, 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. We are a cooperating agency when it comes 
to shore-side LNG terminals, 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 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 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 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 
Commission 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 pertinent 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.
    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.
    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.
    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 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 Cleveland, 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 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, 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 ten-
minute 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.
    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.
    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.
    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.
    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?
    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?
    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, water-
borne 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.
    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? 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 
decision 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 necessarily 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.
    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.
    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.

 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.
    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.
    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.
    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-of-the-art vessel and LNG bridge simulator. 
Right now, MEBA has a 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 
land-based 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 
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 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 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 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 ex-Commissioners, 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?
    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 Federal 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 frustration 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 shore-side 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.
    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 
state-wide 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 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 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.
    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 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 co-located 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.
    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 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 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.
    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.
    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.]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    