Maine tribe invites LNG facility
http://www.boston.com/news/local/maine/articles/2004/07/05/maine_tribe_invites_lng_facility/
The Boston Globe
By Beth Daley, Globe Staff | July 5, 2004

Some see terminal as economic boon

PERRY, Maine -- Up and down the coast of New England, seven communities have been asked to host new terminals for the huge tankers that deliver liquefied natural gas to the American energy system. And all seven have responded with a thunderous ''not near us."

Now, in the remotest reaches of Down East Maine, a hand is going up.

Tribal officials of the tiny Passamaquoddy Sipayik Reservation are inviting a gas company to consider the construction of a terminal on their stretch of pristine, spruce-lined coast. With an unemployment rate tribal officials peg at about 50 percent and a casino plan recently quashed by state voters, the tribe has signed an exclusivity deal with Quoddy Bay LLC, a site developer that promises the tribe annual payments of $4 million to $20 million if the terminal is constructed.

''A light bulb went off in my head . . . why not here?" said tribal state Representative Fred Moore III, who first suggested to tribal members that their reservation, often referred to as Pleasant Point, could host a facility for liquefied natural gas, or LNG. ''This is not about LNG so much as it's about the future of our tribe."

Any decision to build a plant would depend on support from Sipayik's 1,600 members and interest from a gas company -- a likely scenario if the tribe gives its assent. But the idea is already triggering concern from environmentalists, who say that new LNG terminals, needed by an energy-strapped region, will be built not where they are most needed, but simply where resistance is lowest, or can be overridden.

''We want the right amount of gas to be delivered to the right place or places," said Philip Warburg, president of the Conservation Law Foundation, an environmental advocacy group that acknowledges the need to build LNG terminals in New England.

A poorly sited terminal, the group argues, could end up hurting local economies or causing safety and environmental problems. In a recent congressional hearing, Warburg called for federal regulators to assess the need for LNG in New England and to develop a master plan to determine how many plants there should be and where they should go.

''We need a better approach," he said.

The Passamaquoddy tribe's interest is a rare note of welcome in the fierce debate over LNG plants. Sprawling over acres, the plants receive enormous amounts of supercooled natural gas from ships, convert it from liquid to vapor, and feed it to the pipelines that supply energy to power plants and millions of houses. Currently only four exist in the United States, including one in Everett, Mass., that has served as a lightning rod for controversy over the possibility of terrorist attacks and catastrophic accidents.

In the past two years, at least eight American communities have rejected LNG terminals, including one in Northern California and another in Harpswell, Maine. In Fall River, officials are passionately fighting a company's plan to put an LNG terminal in their densely populated city. (Another plan, for a gas hookup off the Gloucester coast, does not involve building an onshore plant.)

In contrast to those other communities, an ongoing door-to-door survey of the Passamaquoddy reservation's members shows more than 60 percent in favor of LNG, Moore said.

Analysts estimate New England has the demand and pipeline capacity to support two new large terminals or several smaller ones, and companies are racing to be the first to be permitted. Quoddy Bay LLC, made up of an Oklahoma businessman and two partners, is acting as a broker for an interested energy company that the firm declined to identify.

The plant is proposed in Gleason Cove, a shoreline overlooking a quiet, cold bay once known for its abundance of pollock. If approved, the plant would take three years to build and need 900 construction workers. Quoddy Bay has promised that tribal members would be trained to take at least some of the facility's 60 full-time jobs.

The nearly 200-acre reservation, near Eastport, is impoverished even by the standards of the county in which it sits, Washington, the poorest in the state.

Many tribal members, unable to afford cars, walk along a dangerous road that splits the reservation in half. There is a years-long waiting list for housing. Almost one-third of the tribe's $3.5 million annual operating budget comes from the proceeds from the sale of a cement factory in the 1980s, and that money is expected to run out around 2007. The tribe also earns a small income from a local gas station and 5,000 acres of blueberries; some members supplement that by digging clams from the mudflats at the bay's low tide.

A gas terminal, Moore said, would change all that.

If a terminal is built, he says, it will provide $2 million a year for new housing and another $2 million a year to help start small businesses. Plus, each resident would receive about $1,000 a year in cash payments. There will be even more money if the tribe becomes a partner in the gas company's terminal, making as much as $20 million a year with no corporate business tax to pay.

''It's tough here," said one young man as he waited to speak to a tribal official last week. The man declined to give his name. ''Maybe LNG will be good," he said.

Maine is attractive to LNG companies because it already hosts a pipeline that brings gas down from Canadian fields to southern New England and beyond. LNG projects have been floated in recent months in four Maine communities, all of which either discarded or voted down the idea.

As a tribal group, the Passamaquoddy enjoy some sovereignty rights, although they must abide by some state and federal laws. As yet, it's unclear whether those rights would help the tribe streamline any permits or protect its decision from the rising objections of neighboring towns.

''It's interesting. . . . It raises a different legal dynamic," said Bob Ineson, director of North America gas for Cambridge Energy Research Associates. There is no known other LNG terminal being considered by a Native American tribe.

Promises of such riches have come before to the Passamaquoddy. After decades of protracted fights, the tribe was given millions in a state land settlement, but the members' hopes of large annual cash payments never materialized; tribal members now receive less than $200 a year. The tribe proposed building a casino several times, with the most recent effort failing in November in a statewide vote. Today, it is also considering a plan for an airplane parts manufacturing plant.

Though the need for money couldn't be more pressing for the Passamaquoddy, some tribal members are hesitant to buy into promises from Moore and other tribal officials. They remember the promises from their land settlement or from fishing-right fights they say yielded far smaller payoffs than expected.

And why, some want to know, did the tribe vehemently protest a nearby gasoline refinery in the late 1970s because of environmental concerns, only to turn around and support another fossil fuel facility?

Some tribal members are also deeply suspicious of Maine Governor John Baldacci, who is in favor of the terminal but was against their casino plan. They wonder whether the state is using them as a convenient way to avoid a political fight over putting a plant in populous southern Maine.

''I've been doing fact-finding. I am not for or against the project," says Madonna Soctomah, a Passamaquoddy and former state tribal representative. ''But how dare [the tribal leaders] say to the world, 'We want LNG.' The companies have already approached the places that have the best site. They are here because they think we are needy."

Beth Daley can be reached by e-mail at bdaley@globe.com.