Save Passamaquoddy Bay

Save Passamaquoddy Bay
3-Nation Alliance

Alliance to Protect the Quoddy Region
from LNG Development

US Flag
Canadian Flag
Passamaquoddy Flag
Scale Baskets for sale
Facebook button

"For much of the state of Maine, the environment is the economy"
                                           — US Senator Susan Collins, 2012 Jun 21


News Release

2012 April 30


Robert Godfrey
Save Passamaquoddy Bay 3-nation alliance
(US, Passamaquoddy, and Canada)
PO Box 222
Eastport, ME 04631
(207)853-2922 (Old Sow Publishing)

Downeast LNG is Last Proposed LNG Import Terminal in North America

Downeast LNG — proposed for a bay between Maine and New Brunswick, Canada — has just become the sole remaining LNG import terminal on the entire continent. Liberty Natural Gas LNG import terminal, proposed offshore from New Jersey and New York, was the only other remaining import project until recently. In April it withdrew its federal permit applications. Also in April, FERC (Federal Energy Regulatory Commission) dismissed Calais LNG from the permitting process due to the proposal's lack of financial capacity or even access to a terminal project site.

In June, 2011, Hess Energy surrendered its Weaver's Cove Energy LNG import terminal Federal Energy Regulatory Commission (FERC) permit to construct in Fall River, Massachusetts. The reason Hess gave for abandoning the project was "unfavorable economics for liquefied natural gas in the New England region." There was no need for their project.

Hess Corporation is a global, integrated energy company with operations around the world. Hess Energy is their subsidiary. The Hess-proposed LNG terminal was in the heart of New England's natural gas demand — the Boston area. And yet, they abandoned the project because additional LNG infrastructure in New England is not justified.

There are already three LNG receiving terminals in the Boston area: Everett LNG, Northeast Gateway, and Neptune LNG. The latter two are offshore, in Massachusetts Bay. Neither of those offshore terminals received any cargo at all throughout all of 2011. During their first year of operation (2010), they received a grand total of four cargoes. Everett LNG's import volume has declined steadily every year since 2007, and that decline is continuing this year.

The offshore terminals were built as a solution to high-demand pipeline constraints. They can receive LNG, delivering natural gas to the pipeline at any time there is sufficient demand, such as when pipelines cannot deliver enough natural gas from outside the region to meet demand. Those offshore terminal's LNG storage, rather than in enormous on-shore tanks, is on ships. Unlike the proposed Downeast LNG on-shore terminal project, those ships can deliver LNG where it is needed, when it is needed. They don't tie up large amounts of LNG at one location, waiting for demand. Yet, even as their imports show, those offshore terminals have not been needed, at all, over the last year. With falling demand for LNG, Downeast LNG's proposed project has no valid argument for existence.

The Maritimes and Northeast Pipeline, that sends natural gas to the Boston area from Maritimes Canada, is operating significantly below capacity. If demand warranted, more natural gas would be coming from underutilized Canaport LNG in Saint John, NB.

If pipeline constraints were creating a natural gas shortage in New England, the solution is obvious: 1) Import more LNG at Everett; 2) import LNG via the two offshore terminals near Boston when needed; 3) import more LNG at Canaport; and/or 4) use the best long-term solution by expanding capacity of existing pipelines to New England. Since none of those is required, it is clear that Boston and New England are not starving for natural gas. Downeast LNG is fabricating reasons to exist in their public statements and FERC filings.

"This news comes as no surprise, since it has been obvious for some time now that the US has several generations' worth of domestic supply, and since the US already has more than 10 times the LNG import infrastructure than it is using," said Robert Godfrey, researcher for Save Passamaquoddy Bay. "The rest of the industry has clearly recognized the long-term domestic natural gas glut, and has abandoned the idea of additional LNG import facilities. New England already has access to many times more import capacity than is needed. And, access to prolific domestic supply is available and growing. The only question remaining, really, is why Downeast LNG continues down its dead-end path," he said.

"In 2005 there were around 40 proposed LNG import terminal projects. Now, there is just one. The smart project developers cut their losses and got out. Plus, in addition to the obviously bad economics, Downeast LNG is prohibited by the Government of Canada from LNG transits into Passamaquoddy Bay.

"Downeast LNG investors — Kestrel Energy Partners and York Town Energy Partners — surely must realize by now that this project has no value; the rest of the industry and the import data has made that clear. We imagine Kestrel and York Town are feeling pretty uncomfortable with the impossible economics of their investment. The smart thing for those investors right now would be to move their remaining venture capital to some other project," Godfrey concluded.

Save Passamaquoddy Bay (SPB) is an alliance of citizens from the U.S., the Passamaquoddy Tribe, and Canada, who oppose siting LNG industrial facilities in Passamaquoddy Bay, and who advocate adherence to world-recognized LNG terminal siting best safe practices as published by the Society of International Gas Tanker and Terminal Operators (SIGTTO). SPB advocates creative-economy, tradition-based, and tourism-based economic development for the international Passamaquoddy Bay area.



Add our banner to your webpage: Save Passamaquoddy Bay

Read about the effort to Fix FERC: FixFERC

Spam Harvester Protection Network
provided by Unspam