The Quoddy Tides

Eastport, Maine

2010 Sep 10

BEP conference on Calais LNG postponed

by Edward French

The Maine Board of Environmental Protection (BEP) has postponed for another week a conference with Calais LNG representatives and hearing intervenors concerning whether the company has secured new financing for its proposed $1 billion liquefied natural gas terminal south of Devil's Head in Red Beach. The conference, which was scheduled for September 8, now has been delayed until September 15, because the company had been granted an extension until September 11 to locate a new financial backer, and the BEP felt the meeting should not occur until after the deadline.

Calais LNG first had requested postponement of the BEP hearings on the project on July 13, just days before the hearings were set to begin. A week later, on July 21, the company announced that its financial backer, GS Power Holdings, a subsidiary of Goldman Sachs, was selling its interest, after investing $24 million in the project. Calais LNG anticipated that the sale would occur by August 11, but if it didn't, then the company would expect to withdraw all of its applications filed with the BEP. On August 9, Calais LNG requested an extension of time until September 11, so that new financing could be secured. That request was granted on August 12 by the BEP chair, Susan Lessard, who set the September 8 date for the conference.

According to Cynthia Bertocci, the executive analyst for the BEP, the decisions to postpone the hearings and meetings have been made solely by the BEP chair. "If she was concerned about whether the applications would be withdrawn, she probably would go to the full board," says Bertocci, adding that the chair can act to regulate the board's docket.

During the wrangling over whether to allow the postponement, some of the intervenors in the case had raised the issue that Calais LNG currently does not have the financial capacity to construct the facility, as is required by the state's Site Location of Development Law. Lessard had stated in her August 12 decision to grant an extension of time that the financial capacity standard "is not a threshold requirement that must be met for processing of an application. Rather, it is a licensing criterion for which evidence is supplied during the licensing process, and in fact a permit may be granted with a condition that a final demonstration of financial capacity be made prior to construction."

The law actually states that applications for projects being considered under the Site Location of Development Law must include evidence of the developer's financial capacity to undertake the proposed development. Bertocci says that Calais LNG did demonstrate financial capacity when it submitted its application and the board cannot grant a license until the present financing issue is resolved. However, she says the board "can give them time to straighten it out." Bertocci adds, "But if they lose title, right or interest to the property during the proceeding, that ends the process and the application." When an application is withdrawn, the applicant "goes back to square one" in the licensing procedure and "has to start over again," she notes.

Request for state to fund new gas pipeline

In other developments with the Calais LNG proposal, the company is floating the idea of a second natural gas pipeline through the state to be funded by the state. In an August 12 letter to Governor John Baldacci, Calais LNG Development Manager Art Gelber asks to meet with state officials to discuss the possibility of the state financing and owning a second natural gas pipeline along the proposed energy corridor along Interstate 95. The gas could be made available to industrial manufacturers and homeowners in Maine and Boston and other regions to the south. Although Calais LNG has been working with the Maritimes & Northeast (MNE) Pipeline on using its pipeline to transport its natural gas, Calais LNG also has been studying the possibility of a second pipeline. Gelber says he would like to discuss the option, which he terms "a more viable and less predatory alternative to MNE."

Save Passamaquoddy Bay has estimated that the cost could be around $686 million.

The Maritimes & Northeast Pipeline is a privately owned open-access pipeline that any company supplying natural gas may seek to use to transport the gas to markets.


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