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Without LNG, Maine Turns to Renewables, Conservation

With each new negative vote from a little coastal town in Maine it becomes less likely that the state will be the home of a liquefied natural gas (LNG) import terminal. While that certainly is not good news for gas consumers in the state, including the 1,500 MW of gas-fired power generation, state officials believe there will be enough gas coming south from two LNG import terminals in Canada to serve gas demand growth.

"I think as towns have turned down these projects increasingly it appears more difficult [for Maine to get an LNG terminal]," said Beth A. Nagusky, Maine's director of energy independence. "Nothing is impossible, but we've had how many votes now, four or five? Sears Port voted [against LNG] even though there was no proposal. They are paranoid up there; they are always targeted for something."

Residents of the town of Perry in Washington County voted on March 28 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. Perry residents voted 279-214 against allowing the project (see Daily GPI, March 30).

Members of the Passamaquoddy Native American tribe and Quoddy Bay LLC officials may try to force another vote on the issue, but grassroots opposition to LNG is strong and growing.

There may be other possible locations for terminals "but I think developers are getting a little gun shy at this point," Nagusky said in an interview with NGI. She noted that communities have voted or ruled against LNG projects in Harpswell, Cumberland, Yarmouth, Gouldsboro, Perry and on Sears Island on Penobscot Bay. As a result, Maine gas consumers will have to hope that some of the LNG coming through two proposed terminals in Canada eventually makes its way south into New England.

"There will be at least one [LNG terminal] in Canada, I'm pretty sure," said Nagusky. "How much of it comes to New England, I don't know, but FERC has said that one or two projects would satisfy the New England demand. There are still a lot of unknowns here."

Canada has approved LNG import terminals in St. John, NB, and on Cape Breton Island, NS. Irving Oil is planning to put the Canaport LNG terminal in St. John in service by November 2006. Meanwhile, Anadarko Petroleum broke ground last fall on the Bear Head LNG import terminal in Nova Scotia. If both are constructed they will provide about 2 Bcf/d of peak sendout capacity. Another 750 MMcf/d LNG terminal also is planned in Quebec.

"It would have been cheaper to have the natural gas coming into New England directly and avoid the transmission tariff coming through Canada," Nagusky noted. "We have five power plants in Maine that are natural-gas fired. They make up 1,500 MW out of 3,500 MW" of installed generation capacity in the state. They are supplied through Maritimes & Northeast Pipeline and the Portland Natural Gas Transmission System.

"Over the long term there are concerns about gas supply, but over the short term less so. We've put 21 new gas-fired power plants in New England in the last five years and we have this large heating demand in the winter in southern New England, not so much in Maine. We passed legislation this year to have efficiency programs for natural gas utilities to try and reduce the peak demand for natural gas from heating customers."

Nagusky said in the meantime the state has been aggressively promoting renewable energy development, energy efficiency programs and conservation. "We are working with wind, tidal, biomass and landfill gas," she said. "We have one wind farm permitted and it hopefully will be built as early as this spring depending on turbine supply. We hope to see many more applications for wind. We've been talking with several developers.

"We also are doing a study on tidal power regionally so we hope to see some tidal projects. These are noncontainment tidal projects that do not require damming a bay. I think we are going to see some landfill gas soon. And the governor [John Baldacci] is introducing a solar initiative for residents and small businesses."

A report on natural gas issued last month by The Power Planning Committee of the New England Governor's Conference Inc did not say that LNG was the only way to satisfy New England's energy needs. Although adding a new LNG terminal in the region would provide the largest boost to gas supply reliability, the report concluded that several other energy options would help gas supply reliability at a lower cost and with fewer safety concerns (see related story).

"The study looked at the costs and benefits of nine different energy options and the four LNG options were the most expensive, even more than nuclear, coal gasification and certainly more than renewables and energy efficiency," said Nagusky. "The cost of gas and cost of building the terminals made them more expensive." As a result, Maine is moving in the right direction, she said.

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