ROBBINSTON, Maine — It has been six years since Downeast LNG proposed construction of a liquefied natural gas importation terminal in this Washington County community.
Some opponents of the terminal say enough is enough and last week asked the Federal Energy Regulatory Commission to pull the plug on the project after the firm backing it failed to meet a Nov. 8 FERC deadline for responding to 14 environmental data questions.
Robert Godfrey, a spokesman for the Save Passamaquoddy Bay organization in Eastport, cites in a letter to FERC what he terms a “long history of FERC deadline abuse” in asking the federal agency to dismiss the application filed by Downeast LNG.
Dean Girdis, president of Downeast LNG, said the deadline wasn’t met because it couldn’t be met, given that new federal standards and technical models for pipelines were only completed in November. Girdis said he expects his company to file the environmental data requested within a few weeks.
“We’re moving forward with the project,” he said Monday in a telephone interview. “We’re expecting a decision, either way, from FERC in April or May. At that point we’ll see how the market looks and make a decision on moving ahead.”
Girdis said Downeast LNG’s option on purchasing the proposed site of the project extends into June 2013.
The proposed $600 million import terminal won approval in a special election held in Robbinston in January 2006, with 227 voters approving the project and 83 opposed. The 80-acre facility sited near the St. Croix River’s confluence with Passamaquoddy Bay then was envisioned to include two LNG storage tanks, a regasification plant and a deep-water pier for docking LNG carrier ships. It also would include a 30-mile pipeline to Baileyville to link the facility to the existing Maritimes and Northeast Pipeline, which runs through Maine, linking Nova Scotia with southern New England.
Girdis said a University of Maine study showed the LNG terminal would create 90 operational jobs, 350 construction jobs and 230 “indirect” jobs in the region.
Canadian officials have opposed the Downeast LNG project and two other proposed terminals, one near Calais on the St. Croix River and another on Passamaquoddy tribal land at Split Rock in Pleasant Point. They cite concerns about safety and environmental risks such projects could pose to what Canada considers Canadian international waters.
Girdis said Canadian government objection amounts to little more than “border politics.”
“When we get approval and it has been determined that we meet environmental restrictions on the federal level, they won’t stop the project,” he said of the Canadian government. “They are not in a legal position to stop the project. They recognized in their own studies that they don’t have a basis in law to stop the project.”
Godfrey said Monday a U.S. Coast Guard requirement may prove problematic for Downeast LNG, which will be required to produce letters of cooperation from the nearby Native American community and from the Canadian government. “I’d be very surprised if either of those letters of cooperation will happen,” Godfrey said.
The Downeast LNG project has been, and remains, an on-again, off-again proposal. After a lengthy and contentious public hearing process, Downeast LNG withdrew its application for state permitting approval in 2007 and has never reapplied. There are no LNG applications pending with Maine’s Board of Environmental Protection.
In his recent letter to FERC Secretary Kimberly Bose, Godfrey claims Downeast LNG has “repeatedly and unapologetically failed to meet FERC information request deadlines, unreasonably stretching out the permitting process, placing an undue burden on the public.”
In his letter Godfrey also contends the natural gas market has changed so significantly during the past six years that the U.S. is evolving into an exporter of LNG rather than a gas-starved importer, making new LNG import terminals unnecessary. The 13 existing LNG import terminals in the United States, he claims, have a combined capacity of 19 billion cubic feet of gas a day. At the same time, the U.S. is projected to import 0.7 billion cubic feet per day in 2012, which translates to existing capacity being 27 times greater than projected import capacity demand.
A recent FERC analysis of natural gas markets supports Godfrey’s contention that the U.S. is experiencing a “glut” that doesn’t warrant expansion of imports.
“Aside from a small amount of LNG imports, at present, the North American natural gas market is self-sufficient and largely insulated from the international pressures that other commodities face,” an April 2011 FERC “State of the Markets” report says. “Strong domestic production growth, combined with added pipeline and storage infrastructure, have increased domestic supply and reduced geographic and seasonal price differences.”
Girdis agrees that market for natural gas has changed significantly with new methods of extracting gas from shale, but said that few of those changes affect seasonal demand in the Northeast, including Maine.
“The Northeast, including Boston, is still dependent on natural gas, and gas remains the fuel of choice for [electrical power] generation,” he said. “Pipelines in the Northeast from November through March, when it’s cold, are constrained by capacity. There may be shale gas in Pennsylvania and West Virginia, but that’s not near where it’s needed. You can’t get any more gas into the Northeast in the winter. New pipelines are so expensive to build, and there’s no right of way.
“I understand that the market has changed fundamentally, and the jury is still out as to whether the U.S. will be a gas-exporting country, as it’s extremely expensive,” he said. “But, even if that happens, the reality is that the U.S. is not one market, but multiple gas markets, and the Northeast will remain very dependent on importing natural gas.”