Irving Oil says it won’t oppose LNG facilities

Posted Sept. 01, 2009, at 9:26 p.m.

Representatives of the parent company of Irving Oil are pledging not to oppose proposed liquefied natural gas facilities in Down East Maine.

In a letter to U.S. officials, Daniel Goodwin with Fort Reliance — the holding company for Irving’s energy businesses —wrote that all energy projects “that aim to improve our shared region’s supply of clean, secure and reliable energy … should be given the opportunity to proceed through the various local, state or provincial and federal regulatory processes.”

Goodwin, who is director of public affairs and government relations for Fort Reliance, also said any successful projects should be allowed to compete openly and freely in the marketplace.

“To be clear, our company — and the companies we invest in — have not, do not and will not oppose the LNG developments in Maine,” Goodwin wrote to Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission.

Goodwin’s letter is meant to counter rumors and perceptions that Irving is the driving force behind the provincial government of New Brunswick’s harsh stance against several LNG projects proposed for the Calais area.

Those perceptions have increased cross-border tensions over energy, potentially threatening plans by Irving and other companies for an “energy corridor” connecting New Brunswick with the extremely lucrative markets in southern New England.

Three companies — Downeast LNG, Quoddy Bay LNG and Calais LNG — have put forward proposals for import terminals in coastal Washington County. None has received regulatory approval, and each faces opposition from some local residents.

New Brunswick officials have said they will not allow any LNG tankers to pass through Head Harbor Passage in Passamaquoddy Bay en route to the proposed facilities. While Canadian officials insist their opposition is based on safety concerns, supporters of the proposed Maine projects contend the provincial government is merely trying to protect the interests of an LNG import terminal and gasification plant in Saint John.

The Canaport LNG facility is a joint venture between Irving Oil and Repsol YPF, a Spanish oil and gas company.

In a meeting with Bangor Daily News staff on Tuesday, Goodwin and two other Fort Reliance representatives said the company will not get involved in the FERC or Maine Department of Environmental Protection reviews.

They also said Fort Reliance will not lobby the provincial government in any way on the issue, despite the fact that an LNG facility could be considered a competitor to the estimated $900 million Canaport facility.

“Our position is it is not our place to comment on our governor or provincial government’s decision making,” Goodwin said.

At least one of the players in the Maine LNG projects remains skeptical, however.

“We will know what Irving’s position is when Canada changes its position,” said Tony Buxton, an attorney for Calais LNG. “All of the letters in the world don’t mean anything if Prime Minister [Stephen] Harper continues to take the position that they will not allow LNG tankers to pass through Passamaquoddy Bay.”

Supporters of the Maine LNG facilities claim that not only is the New Brunswick government’s position contrary to free-market principles, it is contrary to international shipping and trade laws.

They accuse the provincial government of seeking to protect the burgeoning energy hub at Saint John at the expense of residents of Washington County, one the most impoverished counties in the U.S. Irving is New Brunswick’s largest employer.

“If Irving is being forthcoming here, then the next step is for Irving to go to the provincial government and ask them to change” its position, Buxton said.

Tensions over the LNG already have had an impact on another major issue: possible construction of an “energy corridor” from New Brunswick through Maine to southern New England.

Earlier this year, Gov. John Baldacci and New Brunswick Premier Shawn Graham held events touting the economic possibilities of using Maine’s highway corridors for massive new electricity and energy infrastructure. Irving, Bangor Hydro-Electric Co. and other companies already are exploring the possibilities.

Use of the existing corridors could help energy companies avoid some of the environmental and public relations costs and delays of building pipelines in new locations. Maine, meanwhile, could generate tens of millions of dollars in annual lease payments for energy conservation and efficiency.

But some lawmakers voiced opposition to allowing Canadian companies to build an energy corridor through Maine when New Brunswick officials have threatened to block energy development Down East.

As a result, the final version of an omnibus energy bill that passed the Legislature prohibited the state from signing any leases on energy corridor projects until a law is put in place making sure Maine benefits from such projects.

A commission established to study the issue will hold its first meeting next Wednesday in Augusta. Irving representatives will be there, as will representatives of other companies hoping to lease a share of a future energy corridor.

“We think the work of the commission is going to be extremely important,” said Jeff Landry, who is heading up the energy corridor exploration for Fort Reliance.

Some critics have raised concerns that the corridor would merely pass through Maine, allowing Canadian companies to reap enormous profits without directly benefiting Maine consumers. The Fort Reliance representatives said Maine companies or developers of energy projects, such as future wind farms, must be able to tap into the corridor.

“We are only interested in a project that has off- and on-ramps in Maine,” Goodwin said.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business