Another Maine Town Rejects LNG Project Development

Stiff local opposition appears to have brought down yet another proposed liquefied natural gas (LNG) import terminal in Maine, as residents of the town of Perry in Washington County voted Monday to oppose the $400 million Quoddy Bay LLC LNG project in Gleason Cove on Passamaquoddy Bay despite the developer's offer of $1 million per year to the town.

Members of the Passamaquoddy Native American tribe voted in August 2004 in favor of locating the terminal on their Sipayik Reservation on the northern Maine coast (see Daily GPI, Aug. 9, 2004). They signed an exclusivity agreement with the Oklahoma-based project developer. The 800 MMcf/d terminal was to be located on 50 acres on Pleasant Point with a dock in Gleason Cove and a 42-mile pipeline lateral to the Maritimes & Northeast Pipeline.

However, the terminal location was on a section of land previously annexed by the tribe from the town of Perry. And in March 1986, the tribe gave Perry residents veto power over any commercial development on that land.

As a result, the vote on Monday by town residents stops the project dead in its tracks unless the developer and the tribe can force another vote or successfully litigate the issue.

"We don't know what we are going to do," said Dennis Bailey, of Savvy Inc., a public relations firm hired by Quoddy Bay LLC. "We're going to review our options.

"Prior to the vote both sides were saying that another vote was going to be needed. I don't know if that is going to happen or not. It was an oddly worded question so there was some confusion. We'll let the lawyers decide whether it counted."

He said the question put to Perry voters was confusing because a "no" vote meant that the voter was in favor of the LNG terminal, while a "yes" meant that the voter opposed the project. Bailey said there may be an issue regarding how the town's veto powers are worded in the annexation agreement.

Tribal Counsel Craig Francis told the Bangor Daily News that he was "devastated by the vote. I have never seen such an amazing opportunity for here. People lost a billion dollars that would have gone through the project."

In the last few weeks there has been substantial controversy over Quoddy Bay offering the town a significant amount of money every year if they voted in favor of the terminal. Opposition groups, such as Save Passamaquoddy Bay, said it amounted to bribery and could be grounds for a lawsuit. But Bailey said the $1 million per year payment was to "cover expenses."

The town was "very concerned about school costs and construction workers coming in with families and other burdens [on infrastructure]," he said. "We met with them on several occasions and settled on $1 million per year, and given that the town's budget is only around $600,000-700,000 we thought that was pretty generous."

The opposition said a group of Perry residents plan to ask for a grand jury probe into the offer "on the grounds of statutory bribery."

Linda Cross Godfrey, coordinator of the Save Passamaquoddy Bay 3-Nation Alliance, lauded Perry residents for rejecting the terminal. "Saving Passamaquoddy Bay and the homeland of the Passamaquoddy people from an LNG industrial site has been the total focus of our collaborative grassroots work," she said. "Honesty, transparency, and collaboration have triumphed, and the decision by Perry voters to reject an LNG terminal defines a future without an industrial site on the bay and in the ancestral homeland of the Passamaquoddy people."

The opposition plans to call upon the tribe to "dismantle the exclusivity agreement with Quoddy Bay LLC immediately. These two actions will sound the end of the project which has threatened this small coastal community for nearly 10 months." The agreement between the tribe and the project developer is scheduled to expire on May 9.

Bailey said there was an "incredible amount of misinformation" about the project released by opposition groups. "There were a lot of scare tactics on the other side about what it would do to the town and the area," he said, noting public warnings to residents by the opposition about the possibly being incinerated by a vaporized LNG fireball. "They said the place would become an industrial zone and that fisherman wouldn't be able to fish in the waters and wouldn't have free reign in the harbors. It was just very exaggerated stuff. It was tough to work through it.

"And we got off to a late start," he said, regarding the PR campaign. "The project was announced, but we didn't really mount an information campaign until many months later, well after the opponents had pretty much taken the field. I think we did well, given where we came from but it just wasn't enough."

He said the developer does have other options. "There is a possibility that we could find another site, but I think it's going to require a town to really welcome us.

"Other towns in the area have contacted us and said 'we'll take it,' but we don't know what that means exactly. The town councils might say they want it, but who knows. The referendum process up here is a past-time for the state."

If the Quoddy Bay project is canceled, it will be the third time that a Maine town has ruined plans for an LNG terminal to be built in the state. TransCanada and ConocoPhillips had projects in Harpswell, ME and Cumberland, ME shot down by local opposition (see Daily GPI, May 17, 2004). This has happened despite Gov. John Baldacci's support of LNG terminal development in the state (see Daily GPI, June 7, 2004).

"This one in Washington County to me had more appeal to it because unlike Harpswell, it has the highest unemployment in the state; it's relatively poor; there's not industry knocking on the door. I really thought it had a good chance," said Bailey. "Guess I was wrong."

(Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

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