#speculators_paradise_2005aug31.htmlTEXTR*ch YA 2005 August 31 Opinion Column -- Telegraph-Journal
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"For much of the state of Maine, the environment is the economy"
                                           — US Senator Susan Collins, 2012 Jun 21

Opinion Column

New Brunswick Telegraph-Journal

2005 August 31

Passamaquoddy Bay: an LNG speculator's paradise

Janice Harvey

A Civil Society

The count is now three separate — or so they say — proposals for LNG terminals on the U.S. side of Passamaquoddy Bay-St. Croix River. The third, announced last Thursday, is to be located between two protected areas — Red Beach, from which there is access to historic St. Croix Island, and Devil's Head, a spectacular promontory where the St. Croix, a designated heritage river, joins with Oak Bay and the Waweig River to form the St. Croix estuary. The site actually lies within the City of Calais boundaries.

The other two sites are in Robbinston, about three miles across the estuary from the St. Andrews Biological Station, and at Split Rock, a little piece of land on the Passamaquoddy Indian Reservation between the main village of Pleasant Point and Eastport.

These terminal proposals aren't alone. There are 40 other LNG proposals in various coastal states, all of which would be competing for LNG supplies, pipeline space and markets.

So what's going on? Is there that much LNG out there to warrant seemingly unlimited numbers of terminals, or enough room in existing pipelines to accommodate all this extra gas, or enough capital to finance them all?

Comparing these proposals to the Irving-Repsol project sheds some useful light on what's going on. Irving and Repsol are energy companies. Irving has the wherewithal to develop the infrastructure and access the pipeline; Repsol has the wherewithal to access and deliver the gas. Passamaquoddy developers, on the other hand, appear to be little more than brokers and speculators.

They know that natural gas is a hot commodity and that the demand and therefore price is only going to up. As continental reserves are tapped out, the only new gas supply for North America seems to be in the liquified form. Liquifying natural gas by supercooling it allows it to be transported by tankers from overseas countries.

The problem is, LNG terminals are very difficult to site. Besides the hazardous nature of the cargo and the immensity of the tankers, LNG terminals are huge installations that attract energy intensive industries, thereby creating a heavy industry centre wherever they are located. With heavy industry comes pollution, noise, lights and natural habitat destruction.

The price of jobs, some would say, but in areas where the existing economy is based on industries that depend on a clean environment, healthy fish habitat, access to coastal waters, peace and quiet, it's a bad fit. That was the decision of five other Maine towns when LNG promoters came to call over the past two years, and the position of many people on both sides of the Passamaquoddy Bay -St. Croix line.

Back to the promoters. They have seized an opportunity to cash in on the insatiable appetite for natural gas by 'delivering' a terminal site on a platter to big energy companies. They set up a front company to find a site, quell the opposition, deliver local decision-makers and pave the way for the regulatory process to unfold quickly and easily. Each hurdle cleared is an asset they can sell. When enough hurdles are cleared, their assets will become attractive to a real energy company that would access the gas overseas and distribute it in the U.S. market. Without this energy company, the promoters have nothing.

To date, none of the three Passamaquoddy developers have revealed their big energy partners. Given the number of Passamaquoddy Bay proposals, it looks like none of them have such a partner. Instead, they will all develop competing proposals which they can then market to the highest bidder. Presumably, the proposal with the least cost and fewest regulatory and community hassles attached would attract the attention of real energy companies who would then pay a handsome fee to the front company, possibly sign some kind of partnership deal, and take over the business.

Furthermore, this third proposal strongly hints at some interests hedging their bets, so to speak. The front people are some of the same folks who support the Pleasant Point project. They refused to reveal all their partners, but since the only good point (from the developer's perspective) about the Split Rock site is that it is on reservation land, it would not be surprising to see Developer No. 1 showing up elsewhere.

The LNG boom is attracting all kinds of speculators wanting to milk the next energy cash cow. In Washington County, Maine they have found a soft spot on an otherwise hard coastal landscape.

Janice Harvey is a freelance writer and a long-time director of the Conservation Council of New Brunswick. Her column appears on Wednesday.

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