Tribal vote won't settle LNG issue
Portland Press Herald
Saturday, August 21, 2004

By DENNIS HOEY, Portland Press Herald Writer

A vote by the Passamaquoddy Tribe authorizing tribal leaders to pursue a liquefied natural gas project is far from a done deal.

The non-binding vote leaves open the possibility that energy companies could still build a terminal on Casco Bay or other places in Maine.

Save Casco Bay, an organization that opposes construction of an LNG terminal near populated areas, suspects that energy companies will try to develop a facility on Casco Bay.

"We don't know what the Passamaquoddy vote means yet, but we do anticipate there being further attempts to build an LNG facility here in southern Maine," said Claire Ross, a spokeswoman for Save Casco Bay. "We'll remain vigilant because we feel the groundwork has been laid."

The Passamaquoddies voted 192-132 this week to authorize members of the Tribal Council to negotiate a lease with Quoddy Bay LLC, an energy development partnership in Tulsa, Okla.

Lt. Gov. Mark Altvater said tribal leaders have been offered a deal that would return at least $4 million a year to the tribe from lease fees. In return, Quoddy Bay would gain the rights to develop an LNG terminal and pipeline on Passamaquoddy Bay.

Altvater and Jim Mitchell, a spokesman for Quoddy Bay, said the offer is far from a done deal.

Altvater said the council has until the end of 2004 to negotiate an agreement with Quoddy Bay. That may hinge on a council election Sept. 7 in which three new members could be placed in office. Altvater said the council has the authority to break off negotiations if it feels the deal won't benefit the tribe.

"We have a lot of work to do to satisfy the tribe and what they want to happen on their land," Mitchell said Friday. "It isn't a slam dunk."

Jack Cashman, commissioner for the Maine Department of Economic and Community Development, said he has seen only two serious proposals for Maine since last year.

Harpswell, after a long and divisive community debate, rejected an LNG terminal in March. Cashman said rumors about an LNG terminal on Sears Island were unfounded.

"A serious proposal, to me, is one that has money behind it. Everything else is just talk," he said.

Trans Canada Pipelines Ltd. has been interested in Casco Bay since its project was rejected by Harpswell. Trans Canada, which is based in Calgary, has explored sites for an LNG facility on Hope Island in Cumberland and Cousins Island in Yarmouth, without any success.

"We have been looking at sites throughout North America, not strictly Maine," said Trans Canada's spokeswoman, Hejdi Feick. "Right now, we have nothing to announce."

Chris Duval of Fair Play for Harpswell, which opposed the LNG project there, said, "The vote by the Passamaquoddies may take some of the pressure off Casco Bay for now, but then I don't believe that project will ever get built. It's not economically feasible because it's too far from the markets in Boston."

Quoddy Bay would have to pay a toll to Maritimes & Northeast Pipeline Co., which owns the 270-mile-long pipeline that starts at the Canadian border near Baileyville in Washington County and ends in Westbrook.

In the meantime, LNG projects are under way in the Canadian provinces of Nova Scotia and New Brunswick, though the competition for pipeline space may not be as fierce as Cashman and other state officials have made it out to be. They have said there is room in the pipeline for one, possibly two, LNG terminals.

But, Marylee Hanley, a spokeswoman for Maritimes & Northeast Pipeline, says the company could easily accommodate the Passamaquoddy project, as well as the Canadian projects, if federal regulators grant authority to build more compressor stations in Maine.

Baileyville, Richmond and Westbrook now host compressor stations. Each station costs about $35 million to build.

Maritimes & Northeast Pipeline Co. is licensed to move 400 million cubic feet of gas per day, but could seek federal approval to move as much as 2 billion cubic feet per day, Hanley said.

"When we built our pipeline, we designed it to be readily expandable. We would be able to accommodate any of these projects," Hanley said. "We are excited and eager for them to come on line."

Staff Writer Dennis Hoey can be contacted at 725-8795 or at:

dhoey@pressherald.com