Downeast LNG, misinformation and reality

By Robert Godfrey, Vera Francis and Hugh Akagi
Posted Dec. 21, 2011, at 4:35 p.m.

Downeast LNG has insurmountable problems. The proposed LNG import project on Mill Cove in Robbinston and associated LNG ship delivery would place thousands of Mainers and New Brunswickers in harm’s way according to the U.S. Department of Energy’s LNG ship hazard zones. Plus, the company refuses to comply with the U.S. Coast Guard requirement to obtain approval from native tribes for use of the waterway, and cannot comply with the requirement to obtain secure LNG transit cooperation and coordination from the government of Canada — an issue unrelated to any existing maritime treaty.

Downeast LNG offensively claims that native tribes have no rights in the waterway. The company pretends Canada is not sovereign. And, from 2006 until today Downeast LNG’s website has falsely continued to claim the project is needed because of some future deficit of natural gas in New England. Hubris and falsehood seem to be Downeast LNG’s guiding principles.

Downeast LNG president Dean Girdis claimed in the Dec. 13 Bangor Daily News that the Maritimes and Northeast Pipeline cannot be expanded to bring more natural gas to Maine; however, his project’s website states: “M&NE can readily expand capacity to serve demand growth.” Girdis has even contradicted himself.

Back in 2006, Downeast LNG was already up to six years behind three other regional LNG import projects that would fulfill the regional need, making Downeast LNG moot. Those projects — Canaport LNG in Saint John, New Brunswick (with massive winter storage capacity); and Northeast Gateway Deepwater Port and Neptune LNG, both offshore from Boston — have all been permitted, constructed and commissioned. Even those three terminals are running at mere fractions of their capacity due to burgeoning domestic natural gas production. Yet, unpermitted Downeast LNG makes unfounded claims that its proposed project would lower natural gas prices. Nonsense.

U.S. natural gas prices this November were at a 10-year low. There is a vast abundance of domestic natural gas — several decades’ worth according to industry and government sources, including Cheniere Energy, America’s Natural Gas Alliance, Oil & Gas Journal, Goldman Sachs, and U.S. Department of Energy. The massive domestic resource has flipped the market on its head. In fact, the U.S. and Canada have so much natural gas there is now a mad rush to export LNG. Just look at the evidence: seven U.S. and five Canadian LNG export proposals.

The Maine state government website indicates natural gas access already exists in many communities, and is being expanded to many more.

Augusta and Hallowell have just approved pipeline construction. New distribution pipeline is also being proposed for Fairfield, Farmingdale, Gardiner, Madison, Norridgewock, Oakland, Richmond, Sidney, Skowhegan and Waterville. Natural gas is already available in Bangor, Bowdoin, Brewer, Brunswick, Freeport, Gorham, Kittery, Lewiston-Auburn, Old Town, Orono, Greater Portland, Pownal, Topsham, Veazie and Windham.

The paper mill in Baileyville is currently constructing access to the Maritimes and Northeast pipeline, and Verso paper in Bucksport has had access for years. The Bucksport community is looking at gaining access.

And yet, Downeast LNG continues to cite outdated 2006 and 2007 market data because reality weighs fatally against the project. Dean Girdis and company still want to increase U.S. dependence on overseas imports when the country is moving rapidly toward natural gas independence. Downeast LNG’s credibility has failed.

In 2005, Downeast LNG president Dean Girdis announced to the public at a meeting in Robbinston that the company believed it had just a 30 percent chance of obtaining permits. Even then, Girdis said, there was no assurance they could obtain LNG supply or customers.

In other words, Downeast LNG’s investors never expected to succeed; they were betting on a low-probability long-shot. If by some remote chance the proposal were to succeed, the company would make an ocean of money. So, knowing the project was unlikely to succeed, the investors committed to spend the money, and Girdis committed to push the project as far as he could take it.

Downeast LNG predicted correctly — the project obviously cannot succeed, and Girdis and the investors know it. It is time for them to face reality, pack up, and go home.

Robert Godfrey of Eastport is researcher and webmaster for Save Passamaquoddy Bay; Vera Francis of Sipayik is an environmental justice activist; and Hugh Akagi of Saint Andrews, New Brunswick, is chief of the Saint Croix Schoodic Band of Passamaquoddy.

http://bangordailynews.com/2011/12/21/opinion/contributors/downeast-lng-misinformation-and-reality/ printed on November 24, 2014