The Quoddy Tides

Eastport, Maine

2010 Dec 10

Full board to weigh Calais LNG
request for extension of time

by Edward French

The full Board of Environmental Protection (BEP) will consider on December 16 Calais LNG's request for an extension of time on its applications for a liquefied natural gas terminal in Red Beach. Board Chair Susan Lessard announced on December 8 that this time the full board, instead of just Lessard, will make the decision. The board will discuss the matter at about 1 p.m. during its regularly scheduled meeting at the Elks Lodge in Augusta. Lessard will be providing the board with her recommendation prior to the meeting.

Calais LNG attorney David Van Slyke had requested the extension of time, to January 15, in a November 23 letter to the BEP chair. The request was made to allow time both to secure a new financial partner and to resecure title, right or interest in one of the parcels of land that would be used for the project and is owned by Steven Carothers and Gail Roberts. Calais LNG had failed to exercise or renew its option to purchase the land on August 30. Calais LNG's financial backer, GS Power Holdings, had announced in July that it was selling its interest in the project. The hearings on the project had been scheduled for July, and Calais LNG has been granted several extensions since then. In September the BEP chair had granted a delay until December 1.

In a December 2 letter, Calais LNG Project Manager Ian Emery informed the BEP that North East Energy Development LLC (NEED) had purchased on November 24 all of the interest of GS Power Holdings LLC in the Calais LNG project. The principals of NEED are Emery and Arthur Gelber of Calais LNG.

Emery also wrote that the company anticipates it will be able to resecure title, right or interest in the property owned by Steven Carothers and Gail Roberts by January 15, and responses to additional information requests would be submitted to the Department of Environmental Protection by February 15.

Among those intervenors objecting to the request for another extension of time for the BEP to consider Calais LNG's application were the Conservation Law Foundation, Save Passamaquoddy Bay U.S. and N'tutlankeyutomonen N'kihtaqmikon, and the Roosevelt Campobello International Park. Supporting the request was the Maine State Chamber of Commerce.

In his letter to the BEP, Sean Mahoney, vice president and director of the Conservation Law Foundation, noted that Department of Environmental Protection rules state that an applicant "must maintain sufficient title, right or interest throughout the entire application processing record. Failure to maintain title, right or interest in the property proposed for development or use in an application during the processing period compels the withdrawal of that application."

Mahoney stated that Calais LNG's failure to disclose its lack of title, right or interest to the board on September 15 "is inexcusable." At that time the BEP was considering a request for an extension of time to allow Calais LNG to secure financing for the project.

He also pointed out that after a four-and-a-half month delay, the BEP and the intervenors are being told that GS Power Holdings has been acquired by North East Energy Development, which "just happens to be the only other 'member' of CLNG. To understand what a cynical shell game this is, recall that CLNG's entire showing of financial capacity rested on the presence of GS Power Holdings as the managing member of CLNG." None of the members of NEED "have ever been represented as having the financial capacity necessary for an energy project estimated to cost between $900M and $1B. The decision by GS Power Holdings to withdraw left the project without the resources to complete its application, never mind construct such a project. Nothing about that financial scenario has changed by virtue of NEED's new role, apparently as both managing member and limited member of CLNG."

Mahoney continued, "It doesn't take a financial wizard to realize that GS Power Holdings hasn't been replaced C it just couldn't find an independent third party to buy its interest and so NEED had no alternative but to 'acquire' those interests."

Finally, Mahoney responded to the suggestion by the Maine State Chamber of Commerce that the requirement that the "applicant must maintain title, right or interest throughout the entire application processing period" is not technically applicable because the applications are not presently being processed. He called that argument "nothing more than an artful dodge."


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