The Quoddy Tides

The Federal Energy Regulatory Commission (FERC) notified Quoddy Bay LNG in an April 25 letter that the commission is suspending the review of the Quoddy Bay LNG import project until further information is received from the company. Quoddy Bay proposes to build a liquefied natural gas (LNG) terminal at Pleasant Point.

J. Mark Robinson, director of the Office of Energy Projects, states in the letter, "In your responses to staff data requests, filed November 13, 2007, December 26, 2007, and February 29, 2008, you state that Quoddy Bay LNG is not able to provide the information specified in FERC staff's May 15, 2007, and October 11, 2007, information requests concerning the proposed vaporizer revision as well as the safety and reliability of the proposed cryogenic transfer line." Robinson stated, "Without complete responses to these requests, we cannot proceed with our engineering review or with the preparation of the Draft Environmental Impact Statement." FERC also notes that Quoddy Bay has also indicated that the project design may be altered further pending negotiations with LNG suppliers and investigation into the use of additional mitigation measures.

Donald Smith, Quoddy Bay LNG president, says, "The FERC letter accurately describes the present situation. Data supporting our application measures over six feet wide on our shelves and represents two years of engineering, environmental and safety studies. We are working to answer detailed questions on a few aspects of the project for FERC."

Commenting on the letter, Smith says, "In addition to responding to FERC, we also are working on other financial and environmental aspects of the project regarding out sources of LNG. LNG from some suppliers has a higher Btu content than others. In order to reach U.S. pipeline standards for natural gas, we can either buy LNG with a higher Btu content and then add inert nitrogen, or we can buy LNG that when regasified already meets U.S. pipeline standards."

Smith also says, "We haven't decided whether to build the electric generation and the nitrogen plant because we haven't finalized LNG supply. If we can avoid those components, we can lower the cost of the facility by tens of millions of dollars and reduce the air emissions as well."

Adam Wilson, Quoddy Bay's deputy project manager, remarks, "We've been patient to study the LNG supply question carefully so that we build the best possible project in terms of environmental impact and the long-term security of LNG supply."

Wilson says the company will answer FERC's questions in the near future.

In the letter from FERC, Robinson wrote that "if in the future Quoddy Bay is able to finalize its design and provide the previously requested information, we will re-initiate the processing of Quoddy Bay's application for the Quoddy Bay LNG import project."

Linda Godfrey, coordinator for Save Passamaquoddy Bay, comments, "FERC's suspension of the permitting process for Quoddy Bay LNG's project after a whole year of unanswered questions, along with Quoddy Bay LNG's multiple requests to delay entering the State of Maine permitting process speaks for itself — things are not going well for Quoddy Bay LNG."

She adds, "This is a rare decision from FERC and signals that perhaps insurmountable barriers exist for Quoddy Bay LNG. In addition, there's the pending Bureau of Indian Affairs federal lawsuit essentially challenging the legality of Quoddy Bay LNG's land lease at Pleasant Point. Also, there's Canada's prohibition against LNG passage into the bay, and Northeast and Maritimes Pipeline's lack of capacity to accommodate the proposed project. And finally, there's the changing world economy regarding LNG supply and demand. Those are all project killers for the Quoddy Bay LNG developer."