The Quoddy Tides

Eastport, Maine

2010 Nov 12

Quoddy Bay's plans for terminal
at Split Rock reach end of road

by Edward French

Quoddy Bay LNG's plans for a liquefied natural gas terminal at Split Rock, Pleasant Point, appear to have reached the end of the road, with the denial by the Bureau of Indian Affairs (BIA) of Quoddy Bay's request for a reconsideration of the cancellation of its land lease agreement with the Passamaquoddy Tribe at Pleasant Point. Quoddy Bay had entered into the lease agreement with the tribal government in June 2005.

In a letter to Quoddy Bay President Donald Smith, Dean White, the acting director of the BIA's Eastern Region, states that he has determined that he will not reconsider his April 23, 2010, decision that the lease was cancelled. Previous to that decision, White had issued in February a notice of lease violation to Quoddy Bay, asserting that Quoddy Bay's failure to make certain lease payments to the tribe and its failure to pursue a license from the Federal Energy Regulatory Commission constituted a breach of the lease. Quoddy Bay had been given 10 days to remedy or dispute the violation or request additional time. The BIA, though, did not receive a reply from Quoddy Bay, so White cancelled the lease. His decision could have been appealed to the Interior Board of Indian Appeals, but Quoddy Bay instead chose to write directly to the BIA seeking reconsideration of the decision. No appeal of the lease decision was filed, though.

In an April 28 letter to the BIA, Smith had requested that the bureau reconsider the termination of the lease agreement and stated that he could supply requested documents related to financing. He noted that Quoddy Bay had negotiated "a financing agreement with Iberdrola, a European and American company headquartered in Spain, for funding of the remaining development of the project, for funding of the construction of the project and for LNG supply."

In addition to the financing agreement with Quoddy Bay LNG, Iberdrola Renewables has also recently begun conducting wind studies testing for a possible wind turbine site in Trescott. Iberdrola is considered the largest renewable energy operator in the world.

In June 2009, the Sipayik Tribal Council had voted unanimously to notify Quoddy Bay that the council considered the ground lease for the Split Rock site to be expired. The tribal government felt that Quoddy Bay had breached the lease agreement when the company stopped making payments to the tribe in July 2008.

In June of this year, Smith said that one of the reasons he stopped making payments to the tribe was because he was not able to close a deal with a financial partner, since the tribe had not fulfilled its obligation that would have allowed for BIA's full approval of the lease. He also stated that he is looking at other sites for an LNG terminal.


© 2010 The Quoddy Tides
Eastport, Maine
Article republished on Save Passamaquoddy Bay website with permission.