LNG developers turn sights toward Canada
Portland Press Herald
Sunday, October 31, 2004

By DENNIS HOEY, Portland Press Herald Writer

Natural gas companies have not lost interest in developing terminals along Maine's coast.

But for now all the industry action is taking place up north, where Canadians have welcomed two liquefied natural gas projects, in contrast to the negative receptions LNG projects received in places such as Harpswell, Gouldsboro and Searsport.

Communities in Nova Scotia and New Brunswick will receive relatively few financial incentives for hosting liquefied natural gas terminals, but it does not seem to matter to the Canadians.

Anadarko Canada Corp. broke ground this week on its Bear Head LNG project on Cape Breton Island.

The proposed $500 million terminal is being developed on a 160-acre industrial site along the Strait of Canso, which separates Nova Scotia from Cape Breton. Richmond County will receive about $3 million a year for the next decade for hosting the facility, said Anardarko spokes- woman Nadine Barber.

A terminal proposed by Irving Oil for land it owns near Saint John, New Brunswick, received its environmental permits in August. Following an engineering study, the company expects to begin construction sometime next year. Other than increased property tax revenue, Saint John will receive no direct financial benefits, Irving spokeswoman Jennifer Parker said.

These incentives are considerably less than what was offered to Harpswell. ConocoPhillips and Trans Canada Corp. offered the town more than $8 million a year in the form of lease fees and tax revenue. But it was not enough to interest voters, who rejected the offer at a March referendum.

Barber said the high unemployment rate on Cape Breton explains the warm reception there.

"This region has been very welcoming when it comes to industrial development. The response has been very positive. It's a very different environment here than it was in Harpswell," she said.

Parker said Irving has spent the past three years informing the public about their plans after safety concerns were raised. Now, people have accepted the project, she said.

Earlier this year, it seemed as though LNG developers were stampeding into Maine, but today only one project remains active.

Quoddy Bay LLC is negotiating a contract with the Passamaquoddy Tribe that would give the company exclusive rights to develop an LNG terminal on tribal lands at Pleasant Point on Passamaquoddy Bay. Quoddy Bay spokesman Jim Mitchell said negotiations have gone so well that his company is almost ready to submit a preliminary project application to the Federal Energy Regulatory Commission.

"We have held a series of very productive negotiations with the tribe's lawyer," Mitchell said. "I think we are very close. We should have a contract by the end of this year."

Mitchell said Quoddy Bay is offering more than 900 jobs during construction and more than 60 year-round jobs after the project is completed. A 35-mile-long pipeline connecting Pleasant Point with an existing Maritimes & Northeast pipeline will have to be built. The Canadian projects may also hook up with the Maritimes pipeline, bringing natural gas into Maine and the Boston markets.

"For at least a couple of years, a significant number of people will be employed and we'd like for that number to include as many tribal members as possible," Mitchell said.

The tribe's Boston-based lawyer, Robert Williams, said he was not at liberty to comment.

But in neighboring Eastport, City Manager George Finch said there is "growing opposition" to the Quoddy Bay Project. A citizens' group called Save Passamaquoddy Bay has formed and Finch said he has been authorized by the Eastport City Council to send a letter to tribal leaders stating city leaders' concerns about the impact the project would have on Eastport and other communities in the region.

Finch said Quoddy Bay has not kept the city informed about the project, and the city will ask tribal leaders to reconsider their relationship with the company. Issues such as where a pipeline will be built have not been publicly addressed, he said.

"There are a lot of issues here," Finch said. "But no one is telling us anything."

The New Brunswick, Cape Breton and Pleasant Point projects, along with nine others in the northeastern United States and Canada, have been approved, are under federal review or have been informally proposed to communities, according to FERC officials in Washington.

In Maine, LNG projects have been greeted rudely, much to the chagrin of some state officials who say the reactions have created a perception that the state does not welcome LNG development.

When rumors circulated that developers were looking at a couple of Casco Bay locations, the towns of Yarmouth and Cumberland said they would oppose such developments.

Penobscot Bay residents mounted opposition when they heard rumors the state might be trying to lure an LNG developer to Sears Island. So far, that rumor has not been substantiated.

Days after Cianbro proposed an LNG terminal in the town of Gouldsboro, the company withdrew its plans in the face of fierce opposition from residents.

Christopher Duval helped lead a successful campaign to defeat the Harpswell LNG project. His group claimed it would create a terrorist target, lower property values, harm fishing grounds and change the fishing community's character. Duval and his group, Fair Play for Harpswell, have remained active since the March town meeting vote against the project.

" Even with one or two defeats, it is not realistic, given the amount of money involved in these projects, to think it's over," Duval said. "On the other hand, no town in Maine is ever going to be in support of LNG."

Gov. John Baldacci issued a policy statement regarding LNG which said his administration endorses LNG as an alternative energy source, but will not support a terminal in a community that is opposed.

Jack Cashman, commissioner of the state Department of Economic and Community Development, said he has not ruled out another LNG development in Maine, but the prospects now do not look very promising.

"I think the Canadian projects and Pleasant Point taken together would dampen any other interest," Cashman said.

In Canada, proponents say they could not be happier with the LNG projects. Billy Joe MacLean is the mayor of Port Hawkesbury in Nova Scotia. The town, with a population of about 4,000, is the closest community to the Bear Head project.

"LNG is a constant supply of energy that will attract other industry to this area," MacLean said. "The big difference between Harpswell and us is that they don't want it and we do want it."

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

dhoey@pressherald.com