Second LNG applicant files with FERC

The two proposals to build liquefied natural gas terminals near Passamaquoddy Bay are now both in the hands of federal regulators.

Representatives from the company Downeast LNG said Friday that they filed their formal application and supporting documents to the Federal Energy Regulatory Commission in Washington, D.C.

Downeast LNG’s filing came exactly one week after the company’s principal competitor in the race to bring a natural gas facility to Maine, Quoddy Bay LNG, submitted its paperwork with the federal agency. Both applications now will undergo a federal review expected to take up to 18 months.

Dean Girdis, president of Downeast LNG, pointed out that, unlike Quoddy Bay, his company also has filed most of its paperwork with the Maine Department of Environmental Protection and received local permits from Robbinston, the facility’s would-be host town.

Robbinston residents voted 227-83 to support the project during a town referendum in January 2006. Girdis said the company pursued a bottom-up approach to gather public support for the project, which he called “safe” and “environmentally sound.”

Downeast LNG hopes to build an onshore import and storage terminal in Mill Cove in Robbinston capable of supplying up to 625 million cubic feet of natural gas a day to a Maritimes & Northeast pipeline. The project would require construction of a 31-mile-long connection to the pipeline.

Quoddy Bay hopes to build an onshore import terminal at Split Rock on the Pleasant Point Passamaquoddy Reservation and a storage facility in Perry. Quoddy Bay’s facility would transport up to 2 billion cubic feet of gas daily to the Maritimes & Northeast pipeline by way of a 36-mile connection pipeline.

The existing Maritimes & Northeast pipeline also would have to be expanded to accommodate either LNG facility, and FERC is seeking public comment on the environmental impact of that expansion. The federal agency and state DEP officials also eventually will seek public comment on draft environmental impact statements for both proposed LNG facilities.

Within several days, FERC will acknowledge receipt of Downeast LNG’s application through a posting on the agency’s Web site: www.ferc.gov. FERC then will accept public comment and motions to intervene for approximately 20 days.

During a meeting Thursday, Maine DEP officials said they plan to ask the state Board of Environmental Protection to assume jurisdiction over the permitting process for the LNG facilities at the state level. That will enable more public participation in the reviews, which are bound to encounter significant opposition from groups that believe Passamaquoddy Bay is an inappropriate place for an LNG terminal.

“This is the kind of development that is unique enough and the public interest in these facilities is strong enough for the board to take over jurisdiction,” said Jim Dusch, head of policy services for the DEP.

FERC has been flooded with applications to build LNG unloading and processing facilities up and down the East Coast in recent years, reflecting increased demand for cleaner-burning natural gas and considerable profits in the gas industry.

Demand is especially high in New England, which is at the end of the supply chain. Some analysts predict New England could face serious natural gas shortages in the near future unless additional supplies are tapped.

Earlier this week, Massachusetts Gov. Mitt Romney approved plans for two offshore LNG facilities near Gloucester. The projects still must receive FERC, state and local approval, but Romney’s endorsement was viewed as a significant step in the process.

Girdis said he is not overly concerned about the two Massachusetts projects despite the fact that they are further along in the process. Girdis said offshore facilities cost more to build and cannot accommodate as many LNG tankers because of design differences versus more common land-based terminals.

Girdis said he believes there would still be enough demand for an LNG terminal in Maine even if one of the Massachusetts facilities receives approval.

“I wouldn’t be doing this if I didn’t think there was room for more than one,” he said.

But the deluge of LNG applications and proposals – including at least nine in New England – is fueling calls for FERC to change its project-by-project review of applications and, instead, adopt a regional approach.

Steve Hinchman, a staff attorney with the Conservation Law Foundation, said New England does not need all of the LNG proposals pending with FERC. Instead of allowing the market to decide which projects succeed, FERC should adopt a regional plan that bases site approvals on which project will cost the least and have the lowest environmental impact.

Hinchman said the two offshore facilities make more sense than either of the Down East proposals because they are closer to urban centers and existing infrastructure.

“What we have is unplanned energy development,” Hinchman said. “This is energy planning via the Kentucky Derby: The first plant to the finish line wins.”

A representative of the group Save Passamaquoddy Bay 3-Nation Alliance, which is opposed to both Down East projects, said last week that he doesn’t believe either project will succeed because of “insurmountable obstacles.”