Feds dismiss proposed liquefied natural gas terminal on sacred land

SIPAYIK, Maine – The Federal Energy Regulatory Commission has dismissed an application from Quoddy Bay LLC to build a controversial liquefied national gas terminal and pipeline on a three-quarter acre portion of shoreline land owned by the Passamaquoddy Tribe, because the company failed to provide necessary technical information for the agency to review.

A group of Passamaquoddy members, Nulankeyutomonen Nkihtahkomikumon (We Protect the Homeland), which considers the land sacred, has opposed the project for almost three years. NN is part of Save Passamaquoddy Bay, a three-nation grassroots group with citizens from Maine and Canada. While the opponents welcomed the news of the project’s dismissal, they said they remain wary of Quoddy Bay’s future plans.

The FERC informed Oklahoma-based Quoddy Bay LNG President Donald M. Smith and project manager Brian Smith on Oct. 17 through his Washington attorney that the company had failed to provide information requested last February about the proposed project.

The commission suspended review of the Quoddy Bay LNG project in April pending receipt of materials the company had promised to supply the previous fall. The agency’s staff could not go forward with its engineering review of a required draft Environmental Impact Statement without them, the commission said. Quoddy Bay did not provide the material following the April suspension.

“Therefore, I am dismissing your application for the construction and operation of an LNG import terminal. … In addition, I am dismissing Quoddy Bay Pipeline LLC’s applications for the construction and operation of the Quoddy Bay pipeline, a blanket certificate to perform certain routine activities and operations, and a blanket certificate to provide open access firm transportation services in (three separate dockets) as they are dependent on the (terminal) application,” wrote J. Mark Robinson, FERC’s director of the Office of Energy Projects.

The dismissal is “without prejudice,” Robinson wrote. That means Quoddy Bay may file a new application if the company “is able to finalize its design and provide a complete application. However, in accordance with the Commission’s regulations, it will be examined as a new proceeding,” Robinson wrote.

Smith could not be reached for comment; however, on Oct. 18 he told the Bangor Daily News that the dismissal “operationally doesn’t change anything for me. When we reapply we’re not going to change the project. It’s going to be the same project, the same engineering, the same everything.”

Smith repeated his intention to re-file the application even as he withdrew the project’s state applications from the Maine Board of Environmental Protection on Oct. 26.

“We expect to re-file them in the near future, but are uncertain of the dates due to the world LNG supply and demand situation,’ Smith wrote.

The three-quarters of an acre of land is located at a place called Split Rock on Passamaquoddy Bay that is used for traditional ceremonies, community events and recreation. Three years ago the Passamaquoddy tribal council signed a 50-year land lease with Quoddy Bay to allow the company to develop the terminal.

Hilda Lewis, a member of NN who was elected to the tribal council a year after the lease was signed, said she wasn’t completely surprised by FERC’s dismissal because the company “has been so lacking in commitment to this.”

The fact that the application has been dismissed without prejudice is the sticking point, Lewis said.

“That kind of worries me, especially when they say, well, we’re just going to regroup and we’ll be back. It’s a reprieve and I’m excited, but I’m a little wary. I think it’s wonderful and this is probably going to be it, but I just want to be on guard,” Lewis said.

Vera Francis, an organizer for NN, said FERC’s dismissal of the project was “a crushing blow” to Quoddy Bay LLC owners Donald and Brian Smith.

“The record now supports the Smith’s own shortsightedness and failures. Nulankeyutomonen Nkihtahkomikumon has known from day one how inappropriate an LNG terminal is for our ancestral bay. We remain dedicated to protecting our bay, our heartland,” Francis said.
Robert Godfrey, Save Passamaquoddy Bay’s webmaster (www.SavePassamaquoddyBay.org) and researcher said the project’s cancellation was the “logical – if not late – end to a poorly-sited and ill-conceived project, clearly one that the developers themselves – along with a host of consultants – could not technically accomplish. Quoddy Bay LNG has been dishonest with the Passamaquoddy Tribal Government, the tribal community, and with the greater area public, thinking they could simply sweep in, fool the public, and then ram their project through the regulatory process. Today, they’ve found out otherwise, on all counts.”

Godfrey, who has researched and compiled on the Web site a vast archive on LNG projects worldwide, said the Split Rock location “ignored world LNG industry siting standards, the hazardous conditions of the waterway, and hazards to the public in numerous communities in both Maine and New Brunswick.”

Quoddy Bay owners also planned to defy Canada’s refusal to allow LNG-ship transits into Passamaquoddy Bay, which has sovereign rights over part of the channel through which the huge LNG gas tankers would pass.

Quoddy Bay was one of three proposed LNG projects in the area. Godfrey said he hoped the other two – Downeast Pipeline LNG and Calais LNG – would “see the futility of their own projects, especially since the natural gas marketplace has reversed, making their projects futile.”
Economically, Godfrey said, high-priced LNG can’t compete with the 120-year supply of low cost North American natural gas.

On Oct. 24, a few days after Godfrey’s comments, FERC’s Robinson wrote to Downeast warning that it must schedule a required “open season” for the project – or why it doesn’t need to conduct one – within 20 days or risk having the project dismissed. An open season is similar to bid process in which the company can access market interest in the project, as well as capacity and design requirements, and pipeline route and delivery options.

“Considering the uncertainty of the outcome of the environmental analysis, the fact that you have not attempted to garner the critical project information that you would obtain through holding an open season, and the passage of nearly two years since the filing of the application, we must reassess whether Commission staff’s continued efforts and analysis are appropriate under these circumstances,” Robinson wrote.