LNG: Two sides of Passamaquoddy Bay

Among those discussing the merits or otherwise of siting liquefied natural gas facilities on the Maine coast of the Passamaquoddy Bay, the rare references to Canada’s position have tended to focus on whether it can stop LNG tankers passing through its territorial waters at Head Harbor.

Lawyers are already busy interpreting the terms “innocent passage” and “friendly traffic” and pouring over NAFTA and other relevant legislation on maritime traffic. Newly-appointed U.S. ambassador to Canada, David Wilkins has early on in his position taken the view that Canada can do little to stop the LNG proposals were they to gain all necessary U.S. regulatory approvals. The U.S. Coast Guard has also expressed this view, though with less certainty.

The Canadian side of Passamaquoddy Bay is portrayed as an opponent to economic development, best neutralized through legal challenges and slick public relations. Little consideration is given as to why this otherwise friendly neighbor is resisting LNG installations on this particular section of Maine’s 3,500 miles coastline. Perhaps the answer is simply too obvious.

Much like Washington County, Charlotte County in southern New Brunswick suffers a persistent low- growth, high-unemployment economy. The town of St. Andrews and surrounding communities on the Passamaquoddy and St. Croix estuary provide a much needed economic injection to the region. Tourism, which is entirely dependent on the unspoiled views and clean waters of the Bay, generates an estimated Canadian $400 million ($280 million U.S. dollars) annually and employs a commensurate number of local people.

It represents around one-third of total tourist dollars spend in New Brunswick. Fisheries around Head Harbor and inside the Bay (lobsters, scallops, farmed salmon and weir fishing) account for $450 million, employing 3,500 people. (It is yet unclear the extent of possible disruption to fisheries by the estimated two mile exclusion zones around tankers whose itineraries, for security reasons, would not be announced in advance.) Other economic activity dependent on the Bay brings the Canadian total to more than $1 billion ($700 million) annually.

By comparison, Downeast LNG forecasts direct ongoing operations employment of 56 jobs at its LNG facility with a payroll of $9 million per annum.

Quoddy Bay LLC and Downeast LNG slide presentations at public gatherings in Maine speak of considering the implications of LNG for all stakeholders, and of seeking to canvas their views. However, in August of this year, after the town of St. Andrews booked a large hall for residents to hear the arguments on both sides, both Quoddy and Downeast withdrew just prior to the agreed date due to “security concerns” around a larger than expected turnout.

For the promoters of LNG, the wrong kind of stakeholder is one with too many constituents with too much to lose and nothing to gain from their proposals. It is lucky for them that this stakeholder is made up of Canadians who, once the lawyers have finished, may have as much influence on the outcome as the local scallops.

The LNG developers have occasionally lapsed into honest public outbursts. Brian Smith of Quoddy allowed that the Robbinston site was “actually perfect … except for the fact that it’s right across from St. Andrews, a big resort community and kind of in their face.” Don Smith, also of Quoddy, said he “wouldn’t want the damn things in [his] backyard either, but [he] was sent to do a job.” And indeed all of them, Dean Girdis and Robert Wyatt of Downeast included, should not be blamed in

their healthy pursuit of profit.

Blame and attention, however, should be directed at the overall approval process. Of more concern than the proponent’s attitudes will be their ability to persuade Federal Energy Regulatory Commission to take a similar cavalier attitude to Canadian interest. Initial signals are positive for them.

FERC representatives have presented this methodology for conducting LNG approval processes to the Maine community, once in Robbinston and once in Calais. Again, the slides speak of “reaching out to all groups” concerned, incorporating public interest, safety and the environment as inputs to the process. Not surprisingly, “all groups” does not include in this case the community with arguably the greatest public interest of all, simply because it is not American.

The most FERC has offered was from Robert Cupina at its Office of Energy Projects: “We hope and expect Canadian officials and counterparts in the [Canadian] Coast Guard would be involved in our process.” This is tricky ground for FERC as it is not in a position to determine the appropriate level of involvement from the Canadian Coast Guard on key safety issues, but appears willing to conclude any approval process regardless. And, of course, no mention of Canadian pubic and economic interests.

Understandably, FERC, as a U.S. federal agency, sees its jurisdiction as limited to U.S. matters. It must however accept that its approval process will be incomplete in this circumstance – unless it wishes to acknowledge that the safety and public interests local Canadians carry little or no weight in reaching its conclusions.

St. Andrews is one of Canada’s historic treasures, which later became established in the 1880s as one of its earliest tourist resorts. Could one only imagine an LNG proposal reaching this stage if it were intended to sit directly across from similarly established resorts like Bar Harbor or Kennebunkport? Tourism is the best kind of economy for his region – sustainable and clean, while dependent on the beauty and historical character of the area.

If both sides of the Passamaquoddy were American, and St. Andrews were an American resort, there would be no prospect for LNG on this unique part of the seaboard.

Perhaps Canadians are being naive to think that their views should be considered over the interests of a small group of American developers, that a thriving $700 million economy could possibly influence a ruling by a U.S. federal agency. Americans often ask why, as a nation that does so much to promote and defend the freedoms of others, the United States is disliked by so many foreigners. Perhaps this small example of “America First” policy in action on the shores of the Passamaquoddy Bay helps to explain.

Peter Norris is Canadian and a regular visitor to the Passamaquoddy.