The Saint Croix Courier

St. Stephen, NB

2008 Oct 28

Quoddy Bay LNG is not dead, says company president


ST. ANDREWS — The recent dismissal of Quoddy Bay LNG from the federal permitting process by the Federal Energy Regulatory Commission (FERC) is seen as a minor setback by company president Don Smith and he said he intends to re-apply.

In a telephone interview from Oklahoma, he said the company had already slowed down work on their plans for an LNG terminal at Split Rock on the shores of Passamaquoddy Bay as they were working on other aspects of the project.

Smith said he wishes FERC had told him they were going to send the letter dismissing his company from the federal permitting process.

“I would have withdrawn gracefully rather than have them kick me out. I have done $15 million worth of work on this project and all that will be supplied with the new permit. We were not that far along that starting again hurts me.

“We have had a public display of delay but we were already delayed. I had already decided to go slow but it would have been better for me to tell them I was going slow rather than being dismissed.

“We were not dismissed because there was anything bad about the project. It was because we were not proceeding with the project. It is just embarrassing. We had already stalled the process at FERC and were on hold but dismissing the application gives them the opportunity to reallocate staff to other projects.”

Smith said they wanted to have a better idea of the type of liquefied natural gas they would be getting. The waiting he thought would be a few months has turned into a year.

“FERC said you have not answered our questions and you still have nothing for us, so now we are going to dismiss your application, so we will reapply later,” he said.

The application was not dismissed because of anything negative or hostile about the project, said Smith.

“It has nothing to do with negativity of the project. We still can re-apply but I don’t know when because the LNG (supply) has slowed down. There is relatively less in the world but there is a bigger supply in the U.S. than we thought, so the urgency for the development of the terminal is less than it was four years ago,’ he said.

This project is not dead, said Smith.

“There is nothing wrong with it. It has been delayed because of timing with sourcing of LNG.”

Smith said it will probably be nine months to a year before they start the process again and he estimated they would be able to start operations by 2013/14.

“We know, based on market information, that the need for more LNG will be around 2013/14, so that happens to be a good time for me. I am not under a great deal of urgency and I am not squirming because we have been delayed.”

Smith also does not see his project being stopped because of claims by Canadianss that it is not safe to take LNG tankers through Head Harbour Passage. He said the Canadian politicians are opposed to the projects in Passamaquoddy Bay because they are in support of the Irving Canaport project in Saint John, which would target the Boston market.

“The Canadian leaders are for that project and against any in Passamaquoddy Bay. The reason for that opposition is because we can ship gas to Boston much cheaper than they can from Canada.

“Irving will benefit if our project does not get built. It is natural for Canadian leaders to want to help a Canadian company rather than a U.S. company like ours.

“Canaport is going ahead. The question is, does it supply natural gas to Eastern Canada or to Boston? If we are built, they won’t supply Boston.”

Smith said St. Andrews is a wonderful resort town and he can understand their concerns about competing developer Down East LNG’s plans to build storage tanks across the bay. However, he said, there are no negative environmental consequences for that project.

“Would I want to see these big ships in front of my own resort home? Probably not. There is understandable opposition to LNG projects in St. Andrews just because of the skyline. Right now they see a beautiful bay and pleasant tree covered shore.

“Our project is nine miles away and it is so far away than an LNG tanker on the horizon would appear as small as an eraser held at arm’s length as far away as you can get it from your face. It is tiny. It is practically invisibleon the horizon.”

As for Head Harbour Passage, Smith said Canada has signed international treaties for free trade which allow vessels to go through these waters to U.S. ports.

“The question is, from a science point of view, is it safe to bring these ships into Passamaquoddy Bay, and I am certain that it is. I have spent millions of dollars doing studies, which have been shown to the U.S. Coast Guard and Canadian authorities.

“The only way Canada could stop our ships would be by exaggerating safety concerns and setting up standards that don’t exist — and that is not legal.

“I am dead certain that the international law and standards for safety will provide that our ships will get to our ports. I am not worried about that issue,” Smith said.

“Canadian political leaders have said they will not let ships through but have not produced any scientific information that says our ships would not be safe.”

He said his company has had detailed navigational studies done so they will design their tankers’ protocol to take into account the swift tides and the fog they might encounter.


© 2008 Advocate Media
Article republished on Save Passamaquoddy Bay website with permission.

The Saint Croix Courier, St. Stephen, NB