With LNG, will compromise ever be possible?

Liquefied natural gas has grown from being a strange acronym used in the energy sector to a powerful polarizing element in local Maine communities with astonishing rapidity.

Whereas most Mainers would not have bothered to pay any attention to this version of alphabet soup a year ago, today it unleashes strong emotions on both sides of the fence from Harpswell to Pleasant Point and now, Corea and Gouldsboro. While this debate is tearing local communities apart, the global energy sector is poised to make giant strides in what the Economist magazine refers to as the century of natural gas. Before we write off the LNG industry as antithetical to the Maine way of living as public sentiments seem to imply, it is time to weigh all the pros and cons, and make a rational decision.

The reasons cited in opposing LNG terminal initiatives in Maine include safety and security-related concerns and the impact on fishermen and tourism. Safety is a concern with any industrial venture, be that a paper mill or a shipyard or a tanker terminal. The LNG sector has an impeccable safety record but for one major incident in recent history (an explosion in the Algerian port city of Skikda in January).

Nations like Japan and South Korea have been using LNG as a key energy source for many years with no reported accidents. This is far superior to the safety record of many other types of shipping that transit our coast and/or frequent our ports. The credit for this should go to SIGTTO (The Society of International Gas Tanker and Terminal Operators), a first-class trade association – of LNG and LPG ship and terminal owners and operators, port and harbor authorities, major oil and gas companies, and major utility companies – that fully understands that a single accident involving LNG can have a devastating impact on the entire industry.

Security risks are also a genuine concern in today’s geopolitical environment. There are very strict requirements imposed upon ship owners as well as terminal owners and operators through the provisions of the Maritime Transportation Security Act of 2002 which went into effect on July 1.

Correspondingly, similar security provisions were enacted worldwide (as per the International Ship and Port Security Code) also with effect from July 1 this year. The argument that local communities that harbor a LNG terminal will be forced to absorb the added cost of enhanced port security is not valid. It will be met by the owners and operators, and will eventually trickle down to us – the consumers – regardless of where we live, a simple economic fact of life.

Some opponents of LNG terminals argue that the large LNG ships will be staffed by incompetent crews from developing countries. By that reasoning, this is an accident of mammoth proportions waiting to happen, right here in our backyard. The reality is that working on LNG ships is not for the average merchant mariner. Furthermore, maritime accidents are not necessarily flag-based. As an example, the Exxon Valdez, the ill-fated ship that most Americans equate with ocean pollution, was a U.S.-flagged ship, staffed by American crew, and certified by the U.S. Coast Guard.

As of end August, 89 new LNG ships were under construction in Japanese and Korean shipyards. The delivery of these ships will cause a big increase in staffing needs. The International Association of Maritime Universities (IAMU), a forum of the world’s most prestigious maritime educational institutions, is presently working with the SIGTTO to establish a specialized curriculum for future LNG officers. Maine Maritime Academy is a key player and global leader in establishing these higher standards of education, training, and certification for future LNG officers.

If and when an LNG terminal is built in the state, regardless of its location, it will have some impact on the local fishing industry. Furthermore, the sight of a 1,000-foot-long LNG tanker with its odd-looking superstructure tied up in a terminal anywhere in Maine is bound to be an eyesore for anyone. These are some of the unfortunate opportunity costs of the 21st century job market. This should not however rule out the potential for mutual co-existence as has been done in Japan and other countries that have stricter environmental standards than ours.

The argument that the existence of an LNG terminal would disrupt the tourism industry is unlikely given the experiences of Portland, our largest city. The Port of Portland is one of the busiest ports in the Northeast, frequented by many oil tankers and also a large number of bulk carriers that call at the Merrill’s Marine Terminal. The existence of maritime infrastructure there has not deterred tourists or even cruise ships from flocking to the region.

The state leadership is still maintaining a laissez-faire stance regarding the issue, at least in public, leaving the decision to local citizens. It is unfortunate that there is no state-wide scrutiny of the LNG dilemma and the manifold options available out there including the possibility of off-shore terminals, and the good number of well-paying jobs this would create for Maine citizens in the long run. This is an important public policy issue that deserves a better understanding and careful consideration of all Maine citizens.

Dr. Shashi Kumar is the dean of the Loeb-Sullivan School of International Business and Logistics at Maine Maritime Academy. He is a master mariner and a resident of Brewer for the last 18 years.

All opinions expressed here are his own and does not represent that of his employer.