BEP Postpones Hearings on Calais LNG Facility: CLF Speculates on Why

Becky Lipson

After months of political and legal muscle flexing to bully the Board of Environmental Protection into setting an extremely aggressive hearing schedule, the proponents of a liquefied natural gas import and regasification industrial facility on the shores of Passamaquoddy Bay sought and obtained a last minute postponement.  Why? The official story is that the BEP didn’t want to make their decision without certain information that Calais LNG failed to submit in response to comments they received three months earlier from two state agencies concerning impacts on wetlands and fisheries. We think there’s something else going on.  Perhaps the project’s financial backers, a shapeless subsidiary of Goldman Sachs, got tired of wasting money.  Or perhaps Calais LNG recognized the significant weaknesses and impacts of the project as set forth in testimony by CLF and others. Regardless, the request for a delay and the granting of that request only favors the applicant, giving it more time to address flaws, and disfavors the citizens and organizations who were forced to meet the expedited schedule that Calais LNG so stridently sought.

Why is CLF opposed to building a LNG facility in Passamaquoddy Bay in the first place?  Well, to begin with, there is no need for a project of Calais LNG’s size anywhere in New England, and there is certainly no reason to put one in the pristine coastal area of Passamaquoddy Bay.  The annual increase in natural gas consumption in the Northeast region through the year 2035 across all energy use sectors is projected by the U.S. Energy Information Administration (EIA) to be under one percent. EIA estimates all natural gas needs can be met from the region’s existing LNG terminals, never mind the huge potential of domestic gas in the Northeast from tight shale formations.

But if there is so much natural gas in the area, then why does New England remain so dependent on heating oil as a fuel source?  The quick answer is that there is a lack of infrastructure for natural gas, especially in Maine, and that many users are hesitant to pay the upfront costs associated with switching to natural gas.  But despite promises by Calais LNG that its project will help to make this switch, this project will at best increase the supply of natural gas for a market already over-supplied.  It will do nothing to help Mainers switch from oil to natural gas to heat their homes, not even in Calais.

And while the energy benefits of building Calais LNG would be minimal, the environmental costs would be huge.  The proposed $1 billion project would include a 67-acre terminal site with two LNG storage tanks, a two acre pier, and a 20-mile natural gas pipeline connecting to the Maritimes&Northeast Pipeline. Although Calais LNG convinced the BEP to ignore the issue, if the project were built it would also require that a new pipeline run parallel to the existing M&NE pipeline, all 254 miles of it, with attendant impacts as well.  The construction and operation of the facility would result in the industrialization of Passamaquoddy Bay and would have permanent environmental impacts on the area’s wetlands, fisheries, wildlife and scenic character.

And since this is Maine…what about the lobstermen?  The development would significantly harm the area’s aquaculture, lobster, and fishing industries; three of the few viable industries left in Washington County.  Calais LNG will try to argue that they’ve come up with an ingenious solution to avoiding fishing impacts.  During the American lobster season, LNG carriers will only transit in Canadian waters, thereby avoiding any delays and gear loss.  Unfortunately for Calais LNG, Canada has continued to state, as recently as June, that they will not allow American LNG tankers in Canadian water.

So, while we are frustrated that the hearing has been delayed, we’re confident that Calais LNG will be just as bad of a proposal in the fall when the hearing is rescheduled as it is in the summer.

If nothing else, this week’s debacle should make the Board question the merits of deciding proposals of this magnitude on such a frenzied schedule.  This isn’t the first time the state has spent considerable resources on potential LNG projects only to have the applicants withdraw unannounced.  Two years ago, Downeast LNG, who plans to re-file this summer, withdrew their permit application right after a week-long BEP hearing.  As is often said, fool me once, shame on you.  Fool me twice, shame on me.

Learn more:
Read news coverage on the issue in the Portland Press HeraldBangor Daily News, and MPBN.net

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