The End of the Line for LNG
If all the heat generated in Washington County by the debate over plans to build a liquefied natural gas (LNG) terminal on Passamaquoddy Bay could be captured, every family between Cherryfield and Vanceboro would have a warm home this winter. Yet for all the sound and fury in coffee shops and newspaper columns, the last word on LNG in Down East Maine won't come from town planning boards or state agencies. The final decision rests in Washington, D.C., and Ottawa, Canada, and there's not a whole lot the local folks can do about it.
In the past fourteen months developers have proposed no less than three LNG import terminals between Eastport and Calais, amid rumors that a fourth is under consideration. Supporters point to the jobs and new businesses a terminal would generate in a region that desperately needs both. Opponents claim a terminal, the huge LNG tankers that would service it, and the inevitable industrial development that would follow it would put Passamaquoddy Bay at the top of terrorism's target list and destroy the region's tourism industry and natural beauty. Public meetings in Maine and neighboring New Brunswick have drawn upwards of a thousand people. Emotions have run so high that some LNG developers have declined to attend open forums, claiming concerns for their personal safety.
Passamaquoddy Bay is the last, not-so-best place for LNG in Maine. Terminal proposals have moved down the coast like the tide, pushed by local NIMBY (not in my backyard) opposition from Harpswell to Searsport to Gouldsboro and finally to Passamaquoddy Bay.
Along the way terminal developers have become increasingly savvy. They promise lots of public meetings to address residents' concerns and have hired public relations firms to handle their image. In Passamaquoddy Bay two of the proposals include partnerships with the Passamaquoddy Indian tribe.
"The northern Maine coast is ideal for us," explains Brian Smith, of Quoddy Bay LLC, an Oklahoma-based company that proposes to build a terminal on the Passamaquoddy reservation at Pleasant Point in Perry. "It's close enough to our major markets in southern New England that it doesn't cost a lot to get it there through the pipeline, but it's far enough away from high-density populations that it doesn't attract unwanted attention, meaning terrorism."
But Smith also admits that Passamaquoddy Bay is the end of the line for LNG projects in Maine and the upper East Coast. "We looked farther south on the coast for a suitable spot, along the Bold Coast in Cutler and elsewhere this side of Mount Desert Island, but there were no sheltered waters," he explains. "This was the best site we found."
It's ironic then that the fuel doesn't heat a single home in Washington County. Until recently Maine was literally at the end of the natural gas pipeline when New England depended on gas pumped north from Texas and Louisiana. Service ended in Portland. Then in the late 1990s energy companies began developing the natural gas deposits off Sable Island in Canada. In 1999 Maritimes and Northeast Pipeline Company built a pipeline along the Maine coast from Baileyville on the Canadian border to Massachusetts. The line can carry up to 600-million cubic feet of natural gas each day. But in 2003 the Sable Island developers began cutting back their drilling activity and drastically revising their reserve estimates as it became apparent the field wasn't nearly as large or productive as originally thought.
The pipeline has spurred construction of new distribution networks in the Bangor and Lewiston areas, as well as up the coast from Portland as far as West Bath. In 2003 some 70,832 million cubic feet of natural gas was consumed in Maine — 31,684 million in the state's power plants — by about 26,000 customers.
But the Sable Island experience has not been unique in the industry. Natural-gas production in North America has stagnated for the past year, despite drilling a record number of new wells. Meanwhile, demand for natural gas continues to grow on both the consumer and industrial sides, especially for use in power plants. For example, today some 45 percent of the power generated in Maine comes from burning natural gas, versus none in 1991.
The only way to make up the difference between supply and demand is to import LNG, which is natural gas that has been cooled to its liquid phase at minus 260 degrees Fahrenheit and shipped in large tankers. That makes liquefied natural gas the new energy celebrity in the United States.
The United States has five active LNG terminals, and industry experts say the country needs at least another four to six, if not more. (Part-time Rockport resident Matthew Simmons, energy expert, banker, and author of the recently released Twilight in the Desert, a critical analysis of Saudi Arabian oil production, was quoted in a recent interview as saying Maine alone might need two terminals to meet its future energy needs.) Currently more than two-dozen LNG terminal projects are either being considered by the Federal Energy Regulatory Commission (FERC) or are in the planning stages.
The natural gas supply situation is considered so vital to the country's economic health that the massive energy bill passed this summer by Congress gives final authority for approval of all new LNG terminal facilities in the United States to FERC. While FERC is encouraged to "consult" with state and local agencies, the bill as it is currently written appears to give FERC the ability to overrule local regulatory powers and ram approval through despite local opposition. To date, there is only one instance on record of FERC not approving an LNG project.
There's a sort of sad inevitability that the proposals to build a liquefied natural gas terminal have migrated to Passamaquoddy Bay. Oil refineries in the 1970s, nuclear power plants in the 1980s, a huge ash dump in the 1990s — all of those industrial facilities worked their way through Maine from the most-populated to the least-populated part of the state, down the coast from the sand beaches of Saco Bay to the mudflats of Eastport. "They're putting it here because no one else wants it," declares Linda Godfrey, of Eastport, a leader of the anti-LNG Save Passamaquoddy Bay. She points to an internal memo written in May 2004 by Dick Davies, senior aide to Governor John Baldacci, in the wake of Harpswell's defeat of an LNG proposal as proof that Augusta sees Down East Maine as a dumping ground for unattractive projects. The memo suggested an immediate effort to site an LNG terminal in Washington County because of its location, lack of NIMBYism, and perceived support for an industrial facility. "We're expendable in their eyes," Godfrey says. "No one has yet been able to say why we need an LNG terminal north of Boston, much less here."
Godfrey and other opponents are aware of the energy bill's provision, but remain convinced that their voices will be heard — in Ottawa if not in Washington, D.C. The biggest anti-LNG rally so far has not been in Machias or Eastport, but in St. Andrews, New Brunswick, on August 22. American LNG opponents got a rousing welcome and a standing ovation from Canadians who worry that LNG tankers will ruin their tourist business and run into dire straits in Head Harbour Passage, the narrow, tide-washed entrance to Passamaquoddy Bay that every tanker would have to negotiate.
"We don't want our economy put at risk because all this heavy industry is coming in," says John Craig, mayor of St. Andrews. "Passamaquoddy Bay is a beautiful, unspoiled place. An LNG facility is not the right development for it."
Safety is also an issue, and that is what gives Craig and the rest of Canada an inordinately loud voice in what happens on the U.S. side of Passamaquoddy Bay. Back in the 1970s Eastport was proposed as the site of an oil refinery. One reason the plan failed was Canada's refusal to allow oil tankers to use Head Harbour Passage, which passes through Canadian waters. Transport Canada, its federal department of transportation, rates the narrows as the most dangerous passage in all of Canada.
LNG opponents point out that a tanker carrying 125,000 cubic meters of LNG contains the energy equivalent of about fifty-five Hiroshima bombs, with the implication that a devastating accident or attack would leave a miles-wide smoking crater. (By way of comparison, the fifteen gallons of gasoline in the average car equals about 1,000 pounds of TNT.) But no one knows, because there has never been an LNG tanker explosion, even when tankers were attacked with missiles and gunfire during the Iran-Iraq War in the 1980s.
The last LNG accident involving fatalities in the United States was in Cleveland in 1944, when an LNG storage tank built from improper materials split open and LNG flowed into the city's sewer system. The resulting explosion and fire killed 128 people.
Craig wants the federal government of Canada to reaffirm its opposition to large LNG tankers using the route, although similar-sized cargo ships are routinely allowed to make the passage to dock in Eastport. "The science has been done, and nothing about Head Harbour Passage has changed in the last thirty years," he argues. "The fog still comes in like it did back then. The tides are still just as treacherous."
The United States takes the formal position that LNG tankers have the right of innocent passage, but Craig says that could change with one word from Canadian Premier Paul Martin. "A lot of politicians here in New Brunswick are backing us on this," Craig says, "and they're on both sides of the aisle politically. They all agree, and that doesn't happen very often up here."
Brian Smith, Quoddy LLC's representative in Eastport, says the tides are at best a limited concern. "The ships would go through at slack tide," he says. "It takes about two hours to transit the bay. We would use three or four tugs, so even if one broke down we would still have enough tugs to do the job."
As for FERC's new approval power, Smith says the company is aware of the new standards but plans to continue to work with local and state authorities. "We've always said we will apply for all the required state and federal permits," he points out. "If the state requires we meet certain regulations, we will be happy to comply, as long as they don't contradict federal regulations."
Godfrey insists that neither she nor other opponents are modern Luddites or wide-eyed Pollyannas trying to stop all economic development, but she argues that "this type of development is inappropriate for this part of Maine." Within the next few months, she and others on both sides of the issue will find out whether the federal governments on either side of the border agree with them.