The Quoddy Tides

Eastport, Maine

2007 February 23

Canadian LNG stance sparks heated reaction

by Edward French

The Government of Canada's strongly worded message that it will use legal means to try to prevent the passage of liquefied natural gas (LNG) tankers through its waters to proposed terminals on Passamaquoddy Bay has stirred up equally strong responses from the LNG developers and supporters. If Canada follows through on blocking the vessels, some are even calling for the U.S. government to not allow Canadian LNG developers to tap into the gas pipeline that runs through Maine and to block Canadian ships passing through U.S. waters on the west coast. The issues, though, surrounding the Canadian government's right to deny passage of the LNG ships have not been resolved and are still being debated.

In a February 14 letter to Joseph Kelliher, chairman of the Federal Energy Regulatory Commission (FERC), Canadian Ambassador Michael Wilson wrote, "The impact of the proposed siting of the terminals, and the potential passage of LNG tankers through the environmentally sensitive and navigationally challenging marine and coastal areas of the sovereign Canadian waters of Head Harbour Passage, present risks to the region of the southwest New Brunswick and its inhabitants that the Government of Canada cannot accept. We are therefore prepared to use domestic legal means to address our concerns and prevent such passage from occurring."

He stated that Canadian government had commissioned a study "to review the navigational safety, environmental, and other impacts that such projects could have on Canada. As a result of this study that examines the potential impact of these projects and other considerations, the government has decided that it will not permit LNG tankers to pass through Head Harbour Passage."

One day later, Quoddy Bay LNG announced that it would continue to move forward with the development of its proposed LNG terminal at Pleasant Point, and Downeast LNG referred to the ambassador's letter as an attempt to insert Canadian politics into the U.S. regulatory process. Quoddy Bay LNG President Donald Smith submitted a letter to the State Department outlining the company's position and requesting that the U.S. State Department clarify its position on the matter.

Right of innocent passage?

Whether Canada can prevent LNG tankers from sailing through Head Harbour Passage depends on whether the ships have a right of innocent passage through those waters.

"It appears that the ambassador has overlooked international law when describing the position of the Canadian government. We are confident that the State Department's attorneys agree with our legal interpretation that an attempt to prevent LNG vessels from using Head Harbour Passage violates international laws and agreements," Quoddy Bay LNG Project Manager Brian Smith stated in a prepared release. "In order to access the Quoddy Bay site, LNG ships would need to transit through Head Harbour Passage, which Canada has now claimed to be sovereign waters."

Downeast LNG issued a statement echoing the position put forward by Quoddy Bay LNG. "The Canadian position is not based on any documented concerns about safety, the environment or the principles of international law governing rights of innocent passage through Head Harbour Passage, a waterway that is used consistently by ships traveling to U.S. and Canadian ports," stated Dean Girdis of Downeast LNG. "This issue is not about LNG anymore. It is about the right of innocent passage and freedom of navigation. Any action by Canada to stop transit by ships through Head Harbour Passage sets an extremely dangerous international precedent with severe implications on international maritime commerce worldwide."

The LNG developers' viewpoint is being supported by State Senator Kevin Raye of Perry, who called the ambassador's letter "a serious challenge to U.S. sovereignty" and an "unwarranted intrusion" of Canadian political leaders seeking to control U.S. access to Maine ports on Passamaquoddy Bay. "Regardless of one's views on LNG, every American should be concerned about the dangerous precedent it would establish for a foreign country to control access to our ports. The United States has a responsibility to reject this clear breach of international norms and stunning violation of U.S. rights of innocent passage."

Senator Raye also stated that, if Canada follows through on its threat of intervention, the U.S. government has a responsibility to ensure that such action is met with "immediate and commensurate consequences. For example, it is my understanding that President Bush must grant permission for Canadian LNG interests to tap into the gas pipeline that runs through Maine. That authorization should be denied if Canada seeks to block U.S. ports. Similarly, there should be implications for the oil pipeline from Casco Bay to Montreal and for Canadian passage through U.S. waters on the west coast."

The right of innocent passage allows ships to travel through the waters of another country as long as they do not threaten its peace, good order or security. A country may adopt laws relating to innocent passage that may govern, among other matters, the preservation of the environment and the prevention of pollution.

Under the United Nations' Law of the Sea Treaty, Head Harbour Passage would be subject to the right of innocent passage if it is considered part of Canada's territorial sea and not internal Canadian water. Canada views Head Harbour Passage as internal waters, and LNG opponents have been calling on the government to ban LNG tankers under the Canada Shipping Act. The U.S. government believes that the passage is part of Canada's territorial sea and that there is a right of innocent passage under international law, although the U.S. Senate has not ratified the Law of the Sea Treaty.

The U.S. Coast Guard's Captain of the Port for the Northern New England Sector, Stephen Garrity, in his comments concerning the Downeast LNG proposal, states, "Head Harbour Passage is Canadian waters, and during the majority of the transit route, the LNG carriers will be straddling the U.S./Canadian boundary. Only a small portion of the route is actually contained wholly in U.S. waters."

Opponents of the Passamaquoddy Bay LNG proposals were pleased with the ambassador's letter and agree that Canada has the right to block the vessels. Linda Godfrey, coordinator of Save Passamaquoddy Bay U.S., comments, "Ambassador Wilson's letter is an absolutely logical decision for Canada to make. As a nation, Canada has the right and responsibility to protect every citizen, its natural resource based economy, and its vital and valuable ecosystem. From day one, any and all LNG developers looking at Passamaquoddy Bay should have known that Canada has this right. It's one of the 'impossible hurdles' other prospective developers realized when they decided to look elsewhere. It's one of the realities that from the beginning made this location the worst possible place to even consider. Canada's commitment to uphold their rights has brought the international spotlight to Passamaquoddy Bay, and the ambassador's letter has sounded the 'death knell' for these projects."

Dangerous waters and political motivation?

The LNG developers also have disputed whether the waters of Head Harbour Passage are too dangerous for LNG vessels and charged that Canada's position is actually politically motivated.

"Ambassador Wilson has also noted that these waters would be unfit for LNG tanker traffic due to the fog, currents and wind," stated Brian Smith of Quoddy Bay. "These claims appear to be based on a study conducted by the Canadian government that raised safety, security and environmental issues that would affect Canadian citizens as the primary reason for opposing the projects."

"The FERC review process is transparent and inclusive to all interested parties. Canada has yet to release this study, but more importantly it did not include participation from anyone at Quoddy Bay or the public. On the contrary, our ship simulations that included participation from local Canadian pilots and Transport Canada confirmed that the waterway is suitable for the vessels that will come to our facility."

Raye also said he is unconvinced by Canada's claims concerning the navigational difficulties posed by Head Harbour Passage. He says that "the Canadian government has no objection to ships carrying dangerous cargoes such as ammonium nitrate and dynamite routinely entering the bay and sailing past Maine and New Brunswick communities en route to Bayside."

"Canadian opponents have also voiced concern about the size of LNG tankers, typically about 930 feet in length, with a draft of 38 feet. So I was surprised to learn from local pilots that vessels as long as 859 feet, with a draft of up to 42 feet, have entered Head Harbour Passage en route to Eastport more than 150 times. It is also my understanding that the gravel ship Alice Oldendorff, with a loaded draft of 40 feet, and vessels in excess of 750 feet in length regularly traverse Passamaquoddy Bay en route to Bayside," Raye stated.

According to Raye, the Canadian government does not even require a pilot to accompany ships through Head Harbour. "Surely if Canada believed this to be a hazardous route to navigate, they would have imposed this basic requirement long ago."

Raye and Girdis also allege political motivations as the reason for the ambassador's letter. "An examination of Canada's position is revealing," says Raye. "While Canada purports to have concerns about the environmental and safety aspects of LNG on our side of the border, this claim rings hollow given that they have no similar qualms about aggressively pursuing development of LNG import facilities on their side of the border." He noted that, long before the ambassador's letter to FERC, the Canadian government approved both the Canaport LNG facility in Saint John and the Bear Head LNG facility in Point Tupper, N.S. "Given Canada's strong support for LNG in the Maritimes, their subsequent objections to U.S. projects give the appearance of being rooted in an effort to stifle competition with Canadian LNG interests," said Raye.

The Washington County senator said he is particularly troubled by the influence brought to bear by the Irving Group of Companies. "As the owner of every English-language daily newspaper in New Brunswick, the Irving group has enormous influence in shaping public opinion in the province. At the same time, another arm of the Irving corporate family is building their very own Canaport LNG terminal in Saint John," Raye noted.

Dean Girdis of Downeast LNG said, "Ambassador Wilson's letter is nothing more than the latest attempt to insert local Canadian politics into the U.S. regulatory process and to protect the interests of Canadian LNG projects. We are confident that the U.S. government will reject this attempt by Canadian politicians to interfere in what will be a comprehensive review of the Downeast LNG project by FERC, the leading U.S. regulatory authority on energy matters."

"Downeast LNG finds the statements made by Ambassador Wilson to be hypocritical and contradictory, given his earlier statements that Canada wanted to participate in the U.S. regulatory process. His comments also are surprising in light of the recent request by the province of New Brunswick for formal intervenor status in the FERC review of our project, a request we support."

In its request for intervenor status, the province urged FERC to protect the province's security, environmental and economic interests that could be impacted by the proposal and ensure that the companies compensate the province and its communities for any costs to protect its citizens and resources along the vessel routes and for any economic degradation. The request also states, "New Brunswick's participation in the commission's review process here should not be interpreted as acquiescence on its part regarding the passage of LNG vessels through Canadian waters in Head Harbour Passage."

When questioned for clarification on the province's position by MLA Tony Huntjens, during a February 13 question period, Premier Shawn Graham stated, "Both Prime Minister Harper and Minister [Greg] Thompson have stated that they believe that the waters of Passamaquoddy Bay are Canadian waters and that they oppose the passage of LNG tanker traffic through Head Harbour. We support the federal government's position."

Concerning the ambassador's letter, Maine Governor John Baldacci commented, "This really isn't much of a surprise. The Canadian government hasn't made a secret of their opposition to the proposed LNG terminals in Maine."

"I have talked at length with New Brunswick Premier Shawn Graham about LNG," Baldacci said. "We have an important and growing relationship with the provinces. This is one place where we disagree, but there are many other things that we agree upon. At the same time, we have communities that have decided to proceed. We have our own process, which has begun. Ultimately, that will determine what happens with the terminals."


© 2007 The Quoddy Tides
Eastport, Maine
Article republished on Save Passamaquoddy Bay website with permission.