Monday, October 5, 2009

LNG at Fundy's Passamaquoddy Bay - Who calls the shots?

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In an otherwise conciliatory relationship, Maine and Canada duke out the rights to LNG passage


The topic of liquefied natural gas is heating up again, renewing a political feud between Maine and Canada that has turned the energy conversation from collaborative to competitive.

LNG was a headline-grabbing issue a few years ago, when LNG terminals were first proposed in the Down East region, but lately has taken a back burner to wind and tidal projects. Now it’s making news again as two of those proposals prepare for important next steps.

Developer Downeast LNG is nearing the end of the federal regulatory review for its proposed LNG terminal on Passamaquoddy Bay in Robbinston, and is preparing to file an application with the state Department of Environmental Protection. And developer Calais LNG, which is proposing a terminal on the St. Croix River in Calais, plans to file applications with federal and state regulators by the end of the year. Both developers hope to win approvals and start construction in 2011.

But Maine and Canadian officials are battling over whether tankers en route to LNG terminals in Maine can pass through Canadian waters. At the end of last month, Canadian Prime Minister Stephen Harper and Veterans Affairs Minister Greg Thompson reiterated Canada’s stance that it has a right to bar tankers from passing through their waters, the New Brunswick Telegraph-Journal reported.

But U.S. Sen. Susan Collins, in a commentary she wrote that appeared in VillageSoup, disagreed, saying the U.S. State Department confirmed that LNG tankers “enjoy a non-suspendable right of innocent passage into and out of Passamaquoddy Bay through Head Harbour Passage.” She called on Canada to offer its “good faith participation in the assessment of any port development proposals that could help meet New England’s energy needs and create jobs in Washington County.”

So far, both sides have refused to budge. As the political maelstrom continues to swirl, however, both Downeast LNG and Calais LNG say they will stay the course. “We’re certainly going to move forward, and we’re willing to talk,” says Dean Girdis, founder of Downeast LNG. “We’re confident we’ll be able to work to a solution with them as we get nearer to the end.”

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