Coast Guard seeks more details from LNG firms -- The Quoddy Tides, Eastport, Maine

In a recent letter to the Federal Energy Regulatory Commission (FERC), U.S. Coast Guard Captain Stephen Garrity, commander, Sector Northern New England, stated the Coast Guard requires additional information in order to fully assess the security and safety of liquefied natural gas (LNG) vessels transiting to and from and mooring at the proposed Quoddy Bay LNG and Downeast LNG facilities on the western shore of Passamaquoddy Bay.

Garrity lists various information that is needed and states in his letter to FERC, "At this point, we hold the view that the applicant has not complied with 18 CFR 157.21 (a)(2)(ii). Until the Coast Guard obtains the information requested, we consider both applications incomplete and will not be able to finish and submit the Waterway Suitability Reports for either of the two projects."

"The Coast Guard believes that information on maritime safety, security and environmental issues related to the LNG vessel transits, including measures to address such issues is essential to informing the commission's siting decisions. Similarly, we are of the position that the commission and Coast Guard need to consider trans-boundary impacts, which require a fuller understanding of the Canadian position that we have currently."

Garrity believes, as the proponents of these projects, the applicants should be required to demonstrate that the proposed facilities will be sited where they can be served by LNG vessels in a manner that meets all safety, security and environmental interests. Garrity says, "While the Coast Guard will continue to work with the State Department to gain Canadian cooperation in this process, the applicants have a responsibility to obtain and provide the necessary information regarding their site selection to permit the required safety, security and environmental reviews to be completed."

The Coast Guard is asking that the developers obtain and provide as soon as possible the following information: the prospective Canadian LNG study or some suitable governmental articulation of Canadian issues; specific options to facilitate the safe and secure movement of LNG tankers through U.S. and Canadian waters should Canada remain committed to a policy of non-cooperation. Issues of particular interest are: identification of suitable boarding locations to conduct U.S. government pre-arrival safety and security vessel examinations; mechanisms to establish a formal one-way vessel traffic scheme during LNG tanker movements; methods to improve navigational safety; possible locations for establishing safe refuge/anchorage areas, especially in the event of an emergency, suitable for LNG tankers; outlining in-transit and dockside emergency procedures, especially where trans-boundary or adverse Canadian impacts are anticipated, in the absence of any existing bilateral agreement or bi-national response plan; detailing how marine near-shore terrorist threats and civil disobedience incidents, especially those originating from Canada would be addressed; identification of what additional security measures would be put in place at elevated MARSEC levels and whether coordination with Canada would be necessary to implement them; explanation of what emergency response plans would be developed with Canada; and compilation of anticipated legal issues with regard to fishermen equipment loss, special rights of Passamaquoddy fishermen and liability resulting from accidents, attack, use of force or any other trans-boundary concerns expressed to date.

Garrity notes that the position of the Passamaquoddy Tribe regarding its jurisdiction and role in incident response is not yet resolved. The tribe has hired legal counsel to review and work with the Coast Guard. "While we are at the beginning of those negotiations, future discussions with the tribe will take time and may raise additional issues not yet identified," Garrity says.

Adam Wilson, deputy project manager for Quoddy Bay LNG, says the letter does not come as a surprise given some recent meetings Quoddy Bay has had with the Coast Guard, FERC and the Department of State. "Over the last five months Quoddy Bay has done extensive research. We received nothing but positive feedback. The Coast Guard letter gives us an official form in which to respond," comments Wilson. Quoddy Bay's response will be submitted within the next two weeks. "We believe we have come up with sound solutions. We don't believe we should be required to get a report from Canada. It is up to the two governments." Wilson does not believe the Coast Guard's request for information will hold up the project.

Dean Girdis, president of Downeast LNG, says, "We have been working on all the issues listed in the Coast Guard letter and have already addressed many concerns. The letter is not a big surprise to us or a big concern to us."

Tamara Young-Allen, spokesperson for FERC's Office Energy Projects, does not believe the Coast Guard's delay in submitting the Waterways Suitability Reports will have an impact on timing for the review of the projects. "We don't have a specific time schedule for the issuance of the environmental impact study (EIS). Our staff is getting as much information as possible to prepare for the EIS and is still gathering information."

Questions remain about passage

Jon M. Van Dyke, attorney-at-law in Hawaii, has compiled extensive information concerning the authority of the Canadian government to prohibit the transit of vessels carrying LNG through Head Harbour Passage to ports in the United States. Van Dyke notes that three U.S. companies are seeking authorization to build LNG terminals in eastern Maine on Passamaquoddy Bay -- at Red Beach, Mill Cove and Split Rock. Passage rights through narrow straits have long been controversial. Canada has long claimed that the waters of the Bay of Fundy and the adjacent Passamaquoddy Bay are internal waters under its sovereign control.

In an opinion letter on the question of whether Canada can prohibit the passage of LNG vessels, Van Dyke writes that customary international law, based on numerous recent examples of "state practice," recognizes that coastal countries can and do impose restrictions on the passage of vessels through adjacent coastal waters based on the nature of the ship and its cargo in order to protect environmentally fragile areas. Canadian restrictions on the passage of tankers carrying LNG through Head Harbour Passage would therefore be consistent with its sovereign control over the waters of the Bay of Fundy and Head Harbour Passage and its action in 1982 restricting the volume of oil permitted through the passage and also with recent initiatives of other countries in similar situations.

Both Downeast LNG and Quoddy Bay LNG maintain that LNG vessels have the right of "innocent passage" through Head Harbour Passage. That view is also held by the U.S. Department of State.