Energy panel eyes corridor lease rules

Energy panel eyes corridor lease rules


Control of Canadian power at issue
By Kevin Miller
BDN Staff

AUGUSTA, Maine — Members of a task force struggled Wednesday to come up with rules governing potentially lucrative energy corridors in Maine amid concerns about Canadian companies’ plans to feed energy-hungry markets to the south.

Earlier this year, state officials announced plans to explore leasing the right-of-way along Interstate 95 and other highways to companies interested in building electricity transmission lines and energy pipelines to southern New England.

Proceeds from those leases — which could be in the tens of millions of dollars annually — would then be used to make Maine homes and businesses more energy efficient and to encourage the expansion of homegrown renewable energy sources.

But discussion of the “energy corridors” has been dogged by tensions over Canadian opposition to liquefied natural gas facilities proposed for Washington County as well as mistrust, in general, of the multibillion dollar energy firms across the border.

On Wednesday, members of an energy corridor task force struggled to find a way to ensure that any corridors help lower the high energy costs paid by Maine homeowners and businesses. At the same time, members said, Maine must be able to tap into those corridors to export homegrown energy.

Group members, who are developing proposed legislation, said the ultimate failure would be to enable Canadian energy companies to reap huge profits while squelching development of renewable energy in Maine from winds, tides and forests.

“I do not want to get out of here unless we have some control over the power that is coming from Canada,” said Rep. John Martin, D-Eagle Lake. “That is critical for where I come from. And for other legislators in my area, that is the bottom line.”

The debate over energy corridors in Maine is taking place against a backdrop of tumultuous change in the energy industry.

To the north, Canadian power companies are jockeying for position to sell cheap power to the enormously lucrative markets in the northeastern U.S.

That appears to be a driving force behind provincial-owned Hydro-Quebec’s move to purchase New Brunswick Power — a proposal that has fanned political tensions in Canada and raised concerns among New England’s producers of renewable power. At the same time, power producers in the Midwest also are eyeing the north-eastern markets.

“This is probably one of the defining moments in Maine history: for once, we are in the right place with the right assets,” said Rep. Kenneth Fletcher, R-Winslow.

Sen. Peter Mills, R-Skowhegan, suggested language that he said would give the proposed energy corridors legislation the teeth it needs to protect Maine’s interests.

Mills’ proposal, which appeared to have strong support among the group, would require state regulators to deny any corridor project that does not “enhance opportunities for energy generation within the state” and “significantly and measurably reduce electricity rates and energy costs for Maine ratepayers.”

“If we don’t put our eyes on the target and stick to it and play the same game that the Province of Quebec is playing, then we are going to be losers,” said Mills.

As they did earlier this year, supporters of bringing an LNG terminal to eastern Maine are attempting to use the corridors as leverage in their fight with Canadian officials over tankers in Passamaquoddy Bay.

New Brunswick officials maintain it would be unsafe for the massive LNG tankers to attempt to navigate the narrow passage, with its powerful tides and numerous hazards, in order to reach the proposed sites in Calais or Robbinston.

But supporters, who contend that an LNG terminal could dramatically lower energy costs in Maine, allege that provincial officials are merely trying to protect a newly opened LNG facility in St. John that is partly owned by New Brunswick-based Irving Oil.

Task force member Keith Van Scotter of Lincoln Pulp and Tissue, an LNG supporter, and the Industrial Energy Consumer Group are proposing to extend a moratorium on corridor projects until more study is done on the corridors’ potential impacts in Maine. In a straw poll on Wednesday, most members opposed the extension, however.

The current moratorium would end either when an energy corridors law takes effect, or, absent such a law, sometime next summer 90 days after the 124th Legislature adjourns.

Washington County Commissioner Chris Gardner, a member of the task force, acknowledged that the current moratorium on corridor projects has not softened New Brunswick’s position. But Gardner said something must be done to change what he described as Canada’s “obstruction” to a project that would benefit not just Washington County but all of Maine.

“I’m not saying a moratorium is the answer. I don’t know the answer,” Gardner said. “I’m saying we are at a very, very critical juncture right now.”

The task force plans to hold one additional meeting on Dec. 2. The group’s suggested legislation will then be submitted to the Utilities and Energy Committee for consideration.

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Comments
15 comments on this item

Maine has been getting hosed for years by ISO New England. If they want this electrivity for southern New England and this corridor proposal can make or break the deal, we should use it to get a better deal for Maine.

Sounds like the big concern with ME lawmakers is that Canada will make huge profits. Guess they are forgetting their mantra. "We have to get away from foreign oil."

If Canada can give us Cheaper electricity, why shouldn't we just have that?

Already , we are 40% higher than the rest of the country.

The LNG terminal coming to eastern ME should not even be considered. When our Coast Guard says it is not safe. Canada says it is bad for the environment and tourism...please please big time lawmakers and corporate shills , just let it go. It is not going to happen.

"To the north, Canadian power companies are jockeying for position to sell cheap power to the enormously lucrative markets in the northeastern U.S."

Cheap power. Cheap, green power. Cheap, green, emissions-free, dependable hydro power that would allow fossil fuel plants to actually be shuttered and doesn't require huge government give-aways that line the pockets of snake-oil wind power developers and their government shills at the expense of homeowners unfortunate enough to live nearby. And if the Interstate 95 right-of-way is leased for the transmission lines, the State of ME gets money for energy projects. But, that money wouldn't necessarily flow directly into the pockets of the politically connected, now would it?

Of course the big issue is the "...concerns among New England’s producers of renewable power" who can't compete on cost or dependability with the Canadian juice. How will they get all those tax credits and cheap government $$$ if this thing goes through? Just watch the Guvnah and the King family go to work to shoot this attractive alternative down. Time to circle circle the wagons, wind folks.

Chris Gardner told MPBN: "I'll get run out of Washington County on a pole if I make the wrong call."

Anybody got a pole handy?

Buckweet...Karma

Hydropower...getting away from foreign oil.

Iberdrola of Spain owns Maine Central Electric and Maine Public Gas.

Looks like the gov and the legislators are going to get their wish. LOL

Of course Iberdrola is funded by Abu Dhabi Energy...so we are getting away from foreign oil. LOL

The Canadian energy companies don't even have to play by the same rule book as the US companies since they fall outside the jurisdiction of FERC. Just level the playing field.. that would be a good start.

While Chris Gardner is concerned about Washington County, he is more interested in what is good for Chris Gardner. He always has self interest at heart.

Maine has thousands of miles of coastline. If the LNG proponants just move away from the Passamaquoddy Bay estuary they will be away from the problems with Canada.

If the LNG terminals dont get built and there is an energy corridor through Maine, then every politician envolved should be voted out of office. Georgie once stated that we do not need LNG ,she said we should go on welfare if unemployed,its people like Georgie that have this country as messed up as it is.Leasing a right of way for Canadian power will bring millions? Who do you think will pay those millions? YOU ,they will just pass off the lease rates to YOU,good God who make this stuff up?With all the unemployment in the USA and looking to import energy from Canada I have to question the saneness of our oun Government!!!!

The reporter has made an error frequently repeated by the Bangor Daily News on the LNG issue. To clarify, once more, Canada does not oppose LNG projects in Washington County; they oppose LNG projects in Passamaquoddy Bay. If the LNG developers were to move to sites in Washington County outside of Passamaquoddy Bay, the governments of Canada and New Brunswick have clearly stated they would have no objections to the projects.

The LNG developers were made aware of this years ago, but have ignored Canada's repeated warnings. If Downeast LNG and Calais LNG really think there is a need for more LNG import infrastructure in the US, the real puzzle is why they refuse to solve the problem that could be remedied by simply moving to appropriate locations outside of Canada's jurisdiction.

I found this on Bloomberg's:

"Qatar, the world’s largest LNG producer, has diverted supplies originally targeted for North America to other markets amid projections that U.S. demand for imports may not be as strong as once projected.

There may be an “acute glut” of natural gas in the next few years because of rising production of so-called unconventional fuel in the U.S. and Canada, the International Energy Agency said in a report this month."

Bloomberg's, 12 Nov, 2009.

"unconventional" means natural gas from shale.

Summary: there is no need for an LNG terminal near Calais.

Some posters hide their identities behind pseudonyms. I am not ashamed to take credit for what I write.

Canada owns the Canadian portion (around 75%) of Passamaquoddy Bay. Congress required the US Coast Guard to vet Canada's Head Harbour Passage regarding safe LNG transits. The US is saying it can vet Canadian waters but that Canada cannot. Since sovereigns are equal, and since the US claims the authority to vet Head Harbour Passage, Canada has the legitimate right to make its own determination there. The US is not a party to the UN Convention on the Law of the Sea, and UNCLOS clearly indicates, since the US is not a party, the US has no right of innocent passage under the treaty. US Coast Guard international maritime attorney CAPT Michel has admitted to that in a previous BDN story.

If the US were to ratify UNCLOS, there would still be obstacles to LNG transits. First, Congress' requirement of the Coast Guard to vet Canadian waters, as mentioned above, would be a compelling argument against the US. Canada has an equal right to determine against such transits. The US has already defeated itself by vetting Canadian waters and claiming that Canada does not have that same authority. Second, if it ever went to world court, Canada does not have to abide by a world court decision -- exactly as the US has ignored world court decisions when those decisions were in Canada's favor against the US regarding the ongoing softwood lumber dispute.

That leaves two other alternatives for the US: economic sanctions and military action. The proposed LNG projects in Passamaquoddy Bay are insignificant to US interests (there is no need for additional LNG infrastructure due to the domestic natural gas glut). Plus, LNG projects in Washington County and Maine could easily avoid the conflict with Canada by simply moving outside of Passamaquoddy Bay. There is no compelling reason for the US to take any action, other than to urge the LNG developers to move.

The reality is that the LNG proposals in Passamaquoddy Bay made several fatal errors in site selection. They ignored LNG industry terminal siting best practices and they failed to take into account Canada's safety and environmental interests and authority -- and have continued to flout Canada's warnings to move out of Passamaquoddy Bay.

Prior to Quoddy Bay LNG, Downeast LNG, and Calais LNG announcing their projects, the need for their projects was already mooted. Several other LNG import projects were years ahead of them (Canaport was 6 years ahead of Downeast LNG; Northeast Gateway and Neptune LNG were also years ahead), already creating a large surplus in LNG import infrastructure. Shale gas fields were developing, creating a 100-year domestic natural gas glut.

The LNG developers failed in their due diligence. The proposed LNG projects in Passamaquoddy Bay never had much hope for success -- admitted to publicly in Robbinston in 2005 by Downeast LNG President Dean Girdis. The probability of success is now close to zero.

The local LNG developers do not respect the LNG industry's own best practices or public safety, as is clearly evident by their insistence on siting that defies those best practices. The projects place thousands of people in communities in New Brunswick and Maine -- not simply those whose "back yards" are the terminal "host communities" -- within US Government-defined Hazard Zones. THE US GOVERNMENT indicates thousands of people in numerous communities around Passamaquoddy Bay could be harmed. If the harm were insignificant, the government would not indicate otherwise.

The industry's best practices have been researched and developed over decades of experience by those already in the LNG business -- virtually the entire world LNG industry. One of the reasons the industry has had such an enviable safety record in recent decades is due to adherence to those best practices. Defying those best practices increases the probability of an LNG incident.

Those best practices warn against siting terminals under conditions that are inherent in Passamaquoddy Bay. Canada's and Save Passamaquoddy Bay's opposition to the proposals are in agreement with the industry, itself. Downeast LNG, Calais LNG, and defunct Quoddy Bay LNG recklessly-sited their proposals -- sitings that fly in the face of safe practices protecting the LNG industry and the public.

Had Quoddy Bay LNG, Downeast LNG, and Calais LNG familiarized themselves with those best practices, and then abided by them, they would not be in the dead-end fix they find themselves in. Yet, they could still easily solve their problems by moving to industry-compliant sites, perhaps even in Washington County. They refuse to do it since it would mean admitting to their siting mistakes. They would rather blame Canada than succeed -- probably because they know their projects are unneeded and cannot succeed regardless of siting.

Downeast LNG, Calais LNG, and defunct Quoddy Bay LNG chose to blame others for their own failings, picking an unnecessary and unwinnable fight with another country that is simply protecting its citizens and assets. The developers are solely to blame for their projects' realized and pending failures.

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