Quoddy Bay LNG on hold; Downeast acts after warning -- The Quoddy Tides, Eastport, Maine

Downeast Pipeline LLC, an affiliate of Downeast LNG, which proposes to build a liquefied natural gas terminal (LNG) in Robbinston, was warned by the Federal Energy Regulatory Commission (FERC) to start its open season by Thursday, November 13, or risk FERC's reassessment of the commission staff's "continued efforts and analysis." On October 24, in a letter to Robert Wyatt of Downeast Pipeline, J. Mark Robinson, director of FERC's Office of Energy Projects, stated, "In your September 19 response to a staff data request, you indicated that it would inform the commission staff of its open season schedule once we have issued the draft environmental (EIS) for this project." FERC stated, "As you are aware, it is the commission's policy that all new interstate pipeline construction be preceded by a non-discriminatory, non-preferential open season process to, among other things, garner critical information needed to assess interest in the project, as well as capacity and design requirements and pipeline route and delivery lateral options. This critical information could affect project design and route specifications, which in turn could require significant project changes." Robinson then stated, "Within 20 days of the date of this letter Downeast must provide its schedule for conducting open season."

Downeast LLC has since submitted a letter to FERC informing the agency of its intent to conduct open season to gather information that will be used to assess market interest and allocate capacity in the project's sendout pipeline. According to Dean Girdis, president of Downeast LNG, the open season commenced on November 3 and will last for 30 days. At the end of the 30-day period, Downeast then will report the results to FERC.

Girdis says, "We are pleased that the Downeast LNG project remains under active consideration by FERC." He adds,"The open season is simply one more step on the road to project approval."

In October 2007 a request by Downeast LNG to withdraw the application before the Maine Board of Environmental Protection (BEP) concerning the proposed pipeline route through a portion of the Moosehorn National Wildlife Refuge was refused. Then in November 2007, the BEP reversed the previous board vote opposing the withdrawal request and voted in favor of granting Downeast's request to withdraw the application and refile at a later date. Downeast did not request suspension of the FERC process.

Second LNG company withdraws BEP application

On November 6, Quoddy Bay LNG, which proposes to construct an LNG terminal facility at Pleasant Point, withdrew its application from the BEP process. At a November 6 BEP hearing, Quoddy Bay attorney Jeff Thaler explained at the board's request that "Quoddy regretfully is not able at this time to go forward with a guaranteed supply of fuel or other factors of the project that would be necessary to finance a two billion dollar project like this." He added that the company hopes "that as the markets and other things settle down that Quoddy will be able to refile in the future." At this time, there are no proposed Maine LNG project applications before the BEP.

Cynthia Bertocci, BEP executive analyst, says if new applications are filed the process will begin anew, presumably with a request for board jurisdiction, petitions for intervenor status and hearings. Applicants may use previous information, but they must also submit current information.

Linda Godfrey of Save Passamaquoddy Bay believes that Quoddy Bay President Donald Smith made a prudent decision by withdrawing his application from the Maine permitting process. "Smith's reference to 'global energy and economic markets and trends,' and 'the LNG supply and demand situation' have been obvious to the general public for many months." She believes Girdis of Downeast LNG would do well to follow Smith's decision and "cut his losses."