One Writer, Two Vastly Different LNG Projects
Frustrated by the exaggerations and oversimplifications being promulgated by both the pro - and anti-LNG debaters, Maine author Virginia Thorndike wrote
A Moss Design LNG tanker with spherical
tanks, one of two types of tankers in use.
As 2007 opened, two of the many LNG projects under consideration were on opposite sides of the country and in vastly different communities. One terminal was proposed for the Port of Long Beach, California, and although as of January 2007 it appears to have been effectively stopped by circumstances unique to that locale, it remains an interesting case study. Some 2,790 miles from Long Beach, as the crow flies, lies Robbinston, Maine, where the formal application process for the other terminal was under way. These two projects represent the extremes in the variety of applications before FERC.
The Downeast LNG project is about as different from Sound Energy Solutions' Long Beach project as can be imagined. Not only are the locations of the suggested facilities antithetical-one being in an industrial city of half a million people and the other in a rural town of five hundred, but so also are the companies themselves. LNG is unique, perhaps, among oil and gas businesses because it lends itself not only to participation by the majors, who own the whole chain from pulling natural gas out of the ground (upstream) to liquefying it, transporting it, regasifying, and ultimately selling it (downstream), but there is also a potential role for enterprising smaller importation operations.
Mitsubishi, the parent company of Sound Energy Solutions (SES), has been dealing with LNG for 40 years and supplies Japan with more than 50 percent of its natural gas supplies. ConocoPhillips, which owns a half interest in the California project, describes itself as the third largest integrated energy company in the United States. It has about 35,800 employees in 40 countries and assets of $104 billion. By contrast, Downeast LNG was until recently two men - with a group of financial backers. Although he had 17 years' experience in economic development and the energy field, Dean Girdis was barely 40 years old when he founded the company. His offices were for a long time in his attic. He was soon joined by Rob Wyatt, an environmental consultant with particular expertise in permitting, and until the formal application process began, the two of them did almost everything themselves…
On the easternmost edge of the United States, the little Maine town of Robbinston sits on the edge of Passamaquoddy Bay overlooking St. Andrews, New Brunswick, Canada. With a population of five hundred, Robbinston is a town where not much goes on; indeed, all of surrounding Washington County ("the Sunrise County") is equally quiet. Some people like it that way, while others wish their sons and daughters didn't have to leave home to make a good living. Not everyone wants to go lobstering, and only a certain number of teachers, real estate brokers, waitresses, and woodcutters are needed in any small community. Census figures demonstrate that residents of Robbinston and Washington County are considerably older, less educated, and less well-off than those in the state as a whole…
Three separate proposals for far down east Maine have been discussed. Passamaquoddy Bay offers deep, protected water in which ships can unload comfortably, it is reasonably close to the Maritimes & Northeast pipeline that already carries natural gas across Maine to the Boston market, and it is in an area in which much concern has been expressed about the need for economic development. The low population density there can be seen as an attractive characteristic from the point of view of security. What terrorist would want to cause trouble in an area where with the greatest of luck he might be able to kill 20 members of the general public and some seagulls?
The first-mentioned Passamaquoddy Bay plan came from Quoddy Bay LLC and was shot down by vote of the townspeople of Perry, who, it turned out, had approval authority over commercial development of the particular parcel of land under consideration.
Quoddy Bay LLC came back with another plan, this time on land owned by the Passamaquoddy Tribe on Pleasant Point, near the town of Eastport. They won the race, if race there was, to get the first letter to FERC requesting pre-application for a new LNG facility in Maine, though Downeast LNG, with its Robbinston site, was only a couple of weeks behind them. The third group, attempting to develop a plan for a site in Calais, has, at this writing, yet to make any filing.
Dean Girdis is Downeast LNG. His background is in economic development and energy, starting with a Peace Corps tour in Mali and continuing with 17 years in international consulting. Starting in 1997, he was asked by the World Bank to analyze the potential for LNG in China. Would it be a competitive energy source for power generation? What planning needed to be done? What were the environmental issues? What were the pertinent legal issues? China is completely different from down east Maine, or Long Beach; the local communities have absolutely no say about anything to do with industrial development. If China's central government wants an LNG plant, that's that. In the course of working on this Chinese project, Dean met the players from the big oil and gas companies: ExxonMobil, BP, Shell, and other private-sector LNG people. Some of them thought he was from Mars, he says. His background was with the Peace Corps, he had no car, and he ran 55 miles a week. But he knew what he was talking about, and he became interested in regasification.
Watching ConocoPhillips in Harpswell, he could see they weren't going to make it work. Originally from New England, he felt he could understand the local issues better. "If you're from Texas, you don't get the same reception," he says. Looking to Cheniere's experience on the Gulf Coast as a model, he thought he could do an LNG project in Maine himself. In March 2004, he founded his company, Downeast LNG; its office was in his attic in Washington, D.C.
It wasn't long before he asked Rob Wyatt to join him. A professional environmental consultant for 30 years, Rob had expertise in the permitting process that is such a huge part of any energy project. (He has the distinction of having been the first person to get an American LNG import facility permitted since the 1970s, the EcoElectrica plant in Puerto Rico.)…
After listening to the concerns of the people of Robbinston, they worked up a contract by which Downeast LNG will provide the town not only with considerable property taxes and the additional infrastructure it needs should an LNG terminal come to town - added fire protection and other emergency equipment, for instance - but also with a new K-8 school, a policy of priority in hiring, compensation for demonstrated losses to businesses or fishermen due to the company's operations, homeowners' compensation for near neighbors, and an ongoing contribution of more than a million dollars a year to a community development fund to be used as the town sees fit…
So they could report back at the public hearing, a group of townspeople traveled to Maryland to check out the Cove Point LNG facility beforehand. The plant manager gave them a tour and told them that the plant had recently had its first loss-of-work incident in six years - from a bicycle accident. (The Cove Point ship's berth is a mile from shore, connected by a tunnel that carries both piping and bicyclists out to the dock. A certificate of accomplishment is given to people from outside who pedal all the way through the tunnel.) "We saw a fail-safe system," reported Mike Footer of the visiting group, though he admitted that, of course, it could fail. "The space shuttle failed. But," he said, "there are a lot of interlocks - if this happens, then that'll happen." He compared the plant to the Domtar paper plant 23 miles up the road, at Baileyville, at which he and a number of other Robbinston people worked. "The computer does shut the place down sometimes, just like at Domtar, and it'll come back up again and you go on your way."
Cove Point was a clean, quiet plant, and its impact on the Maryland community appeared to be minimal. In fact, when the group asked people they met on the street how they felt about the LNG plant, most of them didn't even know it was there.
At the Robbinston hearing, a heavyset man with his dark hair cut in a flattop stood up. "I have two questions," he said. "Were you attacked by terrorists while you were there, and if not, how many battalions of marines protected you?" Everyone laughed, and then the research group reported that they encountered more rigorous security when entering the LNG plant than when going through the airports on their way to Maryland. "We had to send in our names and social security numbers ahead of time, and we went through a metal detector. 'Course, we stood out," said Mike. "I don't think they get many visitors there."
Although it was clear that they were outnumbered in the room, a few Robbinston residents spoke against the project at the hearing. The threat to what they saw as the pristine nature of the bay was a concern for some, but they were primarily concerned about their own property values and insurance rates. Some questioned the timing of the vote and whether it would be the last opportunity for townspeople to have a say. (They were assured it was not.) Ten days later, the polls at the fire station saw more voters than had turned out for any previous election. Two hundred twenty-seven of them supported the project and 83 voted against it. One hurdle was past, and it appeared Dean was right: if you work with the people of an area, you can accomplish a lot. He describes his project as a partnership with the people of the town, and they appear to have accepted that…
Still, there is serious local opposition to the Robbinston project because of the concern about the environmental impact to the passageway, and the residents of St. Andrews feel it will have a negative effect on their tourism.
The final EIS is supposed to be out in the summer of 2007, and perhaps the certificate (Approval of Place of Import for Natural Gas) would be in hand by fall. Construction could conceivably start by the end of 2007. Many such approvals are challenged in court, however, and it could be considerably longer before construction could begin.
Excerpted from LNG: A Level-Headed Look at the Liquefied Natural Gas Controversy, by Virginia L. Thorndike and published by Down East
- By: Virginia L. Thorndike