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Maine-New Brunswick on collision course Quoddy Bay project would be on Passamaquoddy reservation; issue LNG tankers negotiating passage off New Brunswick Gary Park For Petroleum News
Plans for two liquefied natural gas terminals in Maine have entered the regulatory process, setting the stage for a showdown with opponents in Canada.
Quoddy Bay LNG, an independent Oklahoma-based energy company, made its filing with the U.S. Federal Energy Regulatory Commission in mid-December one year after initiating a pre-filing process.
It plans to build and operate a 2 billion cubic feet per day LNG import and regasification facility at the Passamaquoddy Indian tribe’s reservation in Maine’s Washington County, along with a storage facility and 36 mile pipeline to deliver natural gas from the terminal to the Maritimes & Northeast Pipeline.
The timetable calls for construction to start within 12 months and the terminal to start operations in 2011.
Downeast LNG came hard on Quoddy Bay’s heels, filing for U.S. regulatory approval on Dec. 22 to build a $500 million, 500 million cubic feet per day terminal.
Quoddy Bay President Donald Smith said his project has reached an “important milestone and is significantly closer to providing the Northeast with environmentally clean natural gas.”
Shipping passage an issue But it is another environmental issue that has the project headed for a showdown that could reach the highest levels of the U.S. and Canadian governments.
The New Brunswick and Canadian governments have registered their concerns over the prospect of LNG tankers negotiating a confined passage off New Brunswick, the only access available to Maine ports.
The clash has already ended in a diplomatic stalemate over who controls navigation rights through Head Harbor passage between the Bay of Fundy and Passamaquoddy Bay.
Washington insists the passage is an international waterway; Canada disputes that claim, arguing the passage flows through a channel created by Canadian islands.
The U.S. has countered by contending that even if the channel is an internal waterway U.S. ships have right of passage under the International Law of the Sea Treaty.
Canadian Prime Minister Stephen Harper has joined the dispute, vowing to take the fight to international courts if necessary.
Downeast President Dean Girgis, a former consultant for the World Bank on LNG projects, said New Brunswick is driven by its desire to fend off competitors to the Irving Oil-Repsol LNG plant under construction in the province and designed to ship gas into the U.S. Northeast.
He told the Globe and Mail that elected officials and residents of Maine see the disagreement as “purely an attempt by the New Brunswick government to protect the Irving turf.”
Turf issue vs. safety concerns But federal politicians in both Harper’s current Conservative government and the previous Liberal administration say that New Brunswick is driven by the same safety concerns that have blocked progress on other LNG projects in the U.S.
Conservative Member of Parliament Greg Thompson, a member of the federal cabinet, said the Head Harbor passage is rated the most difficult to navigate on the East Coast of Canada because it is narrow, littered with rock outcrops and is subject to fast-moving currents and tides.
The tides are reflected in the Bay of Fundy, which is believed to have the greatest difference between high and low tides of any place in the world.
Thompson said Canada is not fundamentally opposed to LNG facilities that serve U.S. markets, noting that there has been support for other projects in New Brunswick, Nova Scotia and Quebec.
The two projects also face a challenge on their home front.
The Save Passamaquoddy Bay 3-National Alliance believes neither has a “chance of actually succeeding,” according to spokesman Bob Godfrey, who sent an e-mail to the Bangor Daily News.
“Both have insurmountable obstacles,” he said.
The main State Planning Office has also filed a motion to intervene, although it is not necessarily opposed to the projects.
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