Downeast LNG to file environmental reports for natural gas terminal

Downeast LNG to file environmental reports for natural gas terminal

Downeast LNG, which now is proposing to construct a liquefied natural gas import-export terminal on the western shore of Passamaquoddy Bay, expects to file draft environmental resource reports with federal regulators in the coming weeks.

In 2005, the energy development firm announced that it had plans to construct a $400 million liquefied natural gas import terminal on Mill Cove. After going through a decade of reviews, filings, reports and hearings, Downeast LNG announced last summer it would seek federal approval to build a $2 billion facility that could both import and export liquefied natural gas. The firm plans to construct a 30-mile pipeline from Robbinston to Baring, where it would connect to the Maritimes & Northeast pipeline that connects Canada with southern New England.

Downeast LNG made the decision to amend the proposal on the heels of getting final environmental approval from the Federal Energy Regulatory Commission last May to build an import-only terminal in Mill Cove.

Robert Wyatt, environment and permits director for Downeast LNG, wrote in an email to the Bangor Daily News on Friday that the addition of export components to the proposed terminal are not expected to pose any significant environmental impacts to the surrounding area. He said the firm expects to file environmental and engineering resources reports in April and May as part of the Federal Energy Regulatory Commission’s pre-filing review of the project.

The decision to seek approval for export capabilities at the site, where large specialized tankers would come and go between Passamaquoddy Bay and the Bay of Fundy, reflects significant changes in the global energy market over the past 10 years. The spread of fracking technology across the continent has meant that fossil fuel deposits that once were thought to be unusable or inaccessible can now be mined to produce oil and gas.

Dean Girdis, CEO and president of Downeast LNG, said that because much more natural gas is being produced in North America now than in the early 2000s, it makes sense to construct and export-capable facility in Robbinston. He said increases in production in the Marcellus Shale geologic region around northern and western Pennsylvania and West Virginia means the Downeast LNG terminal would be “well positioned” to export natural gas overseas.

“Since the production cost of East Coast gas is lower than the Gulf Coast region, we can export LNG at a lower cost to Europe than Gulf Coast LNG projects,” Girdis said in an email Thursday. He added that “on the coldest winter days,” when energy consumption increases in Maine, the company could sell gas to local firms, which would increase the gas supply in the state and help reduce prices.

Both Girdis and Wyatt touted the economic impact the project would have on Washington County, which long has had one of the weakest economies in the state. Estimates indicate that during the three years of construction, more than 2,000 full- and part-time jobs (direct and indirect) would be generated, along with a labor income of more than $375 million.

When construction is complete, annual operations at the facility and multiplier effects are predicted to create an estimated $68 million in output, 337 full- and part-time jobs, and $21.6 million in labor income, most of which is expected to manifest in Washington County.

But despite these predictions, there are opponents to the project who say that, regardless of whether the terminal imports or exports liquefied natural gas, the proposal is poorly conceived.

Robert Godfrey, a spokesman and researcher with Save Passamaquoddy Bay, indicated in an email Sunday that tanker traffic to and from the facility would pose a safety hazard to nearby communities, and that the project faces several insurmountable practical hurdles.

The Canadian government and the Passamaquoddy Tribe, each of which must support the project in order for it to receive U.S. Coast Guard approval, are opposed to liquefied natural gas shipping activity in Passamaquoddy Bay. The bay is physically split between the U.S. and Canada, and is only accessible by tanker through Canadian territorial waters, Godfrey said.

He also said that, because of the increase in domestic energy production, existing liquefied natural gas import terminals in Massachusetts and New Brunswick are largely idle and underused, indicating that there is no market need for a terminal to be built in Washington County.

“The reality is that there never has been a need for Downeast LNG, and that Downeast LNG cannot comply with multiple Coast Guard requirements,” Godfrey wrote. “There is no viable reason for the proposed Downeast LNG import-export terminal.”

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