N.B. and Maine political leaders agree to disagree on LNG tanker dispute

OilWeek Magazine ^ | Feb 21, 2007 | OilWeek Magazine

[thackney]

FREDERICTON (CP) _ The governor of Maine and the premier of New Brunswick have agreed to disagree on the potentially explosive issue of allowing liquefied natural gas tankers to sail through Canadian waters to reach U.S. ports.

The political standoff emerged as Maine Gov. John Baldacci paid his first visit to New Brunswick on Wednesday.

Although he and Premier Shawn Graham were positive about resource sharing and energy developments, the looming dispute over LNG tankers in Passamaquoddy Bay clouded their discussions.

“This is one of those areas where we agree to disagree,‘‘ Baldacci said. “We will allow the process to be followed.‘‘

The U.S. Federal Energy Regulatory Commission is reviewing applications from Quoddy Bay LNG and Downeast LNG to build gas import terminals on the Maine side of the bay.

Under the proposals, LNG tankers feeding the terminals would have to navigate through Head Harbour Passage, the narrow channel between Canada‘s Deer Island and Campobello Island, off the southwest coast of New Brunswick.

Sharp rocks, strong currents and even the Old Sow _ one of the world‘s largest ocean whirlpools _ are all hazards for shipping in the area.

The Canadian government considers the passage within Canadian jurisdiction.

However, LNG proponents insist the waters are part of a territorial sea where international ships have right of passage.

The Canadian government formally notified the U.S. regulatory commission last week that it will not allow LNG tankers through Head Harbour Passage.

“We are prepared to use domestic legal means to address our concerns and prevent such passage from occurring,‘‘ Canadian Ambassador Michael Wilson said in a letter to the commission.

The commission has not responded to the letter, but the LNG developers are demanding a strong response from U.S. officials.

Downeast LNG president Dean Girdis told the Bangor Daily News he is not deterred by Canada‘s position.

“We expect the elected officials in Maine, the U.S. State Department and FERC to support us in the review process of our proposal and we respect that they will uphold the rights of transit passage to U.S. ports,‘‘ Girdis told the Maine newspaper.

Girdis said he is “100 percent certain‘‘ that international ships have right of passage in the harbour.

Baldacci said he supports the LNG proposals, but he said it it up to the regulatory commission to decide the matter.

Maine has intervener status at the hearings, as does the province of New Brunswick.

Graham, who is eager to develop closer ties with Maine, is saying only that he has “major concerns‘‘ about the proposed developments.

“FERC will have the final say,‘‘ Graham said of the U.S. regulatory process.