In Maritimes, LNG among potent friends
By TUX TURKEL, Portland Press Herald Writer
Sunday, May 15, 2005
Copyright © 2005 Blethen Maine Newspapers Inc.
SAINT JOHN, New Brunswick — Roger Hunter pilots his 39-foot lobster boat, Final Justice, out of Mispec Bay, on the eastern edge of this waterfront city. Tides that rise and fall 28 feet limit the time he can slip past the steep granite walls that frame the estuary's narrow channel. As Hunter's boat pulls offshore, an industrial landscape unfolds over the transom.
Here, 17 storage tanks that can hold 250,000 barrels per day of crude oil line the ledges. Six near the shoreline are lettered to spell out the owner's name: I-R-V-I-N-G.
This is Irving Canaport, a key holding of the family- owned conglomerate that dominates business in New Brunswick. Half of Canada's exported oil moves through this 35-year-old terminal. Some of it is turned into gasoline and heating oil for cars and homes in Maine.
Now the oil tanks at Canaport are about to get a new neighbor.
Irving Oil has begun work on a $602 million liquefied natural gas project. Workers were clearing land last month, 10 miles from the city center, for a terminal that can handle a billion cubic feet of natural gas a day. It will include three large gas storage tanks and a series of pumps and compressors. Tankers will dock at a 1,000-foot-long jetty to feed the plant.
Hunter and other lobstermen who dock in Mispec Bay aren't happy about this development. It will restrict their movements and take away some of their fishing grounds. But they are in the minority.
During three years of government reviews, no organized opposition formed to fight the LNG project. No lawsuits were filed. No citizen group mounted a referendum drive. Safety, while a concern, didn't emerge as a major issue.
In the past three months, an unexpected surge of opposition is grabbing headlines. But the protests are tied to a last-minute tax break for Irving, rather than the typical environmental and safety issues associated with LNG.
Tax protests and fishing grounds aside, LNG developers here, and on Cape Breton in Nova Scotia, have met little resistance in accomplishing what has so far proved impossible in Maine and the rest of New England: They are building new terminals to offload supertankers of liquefied natural gas to meet growing energy demand in the Northeast United States and Atlantic Canada.
In New Brunswick, the provincial government is enthusiastic about liquefied natural gas.
"This project will ensure Saint John's place as the energy hub of Eastern Canada," Premier Bernard Lord said last year after the terminal won its environmental permits.
Contrast the reception here to the one in Maine, 65 miles down the Bay of Fundy.
Voters in Perry last month rejected plans by Maine's Passamaquoddy Tribe for an LNG terminal there, despite the developer's promises of $1 million a year for the community. Developers said last week they'd try again, at a new site on the Pleasant Point reservation. The plan is already running into opposition.
Local opponents killed an LNG proposal last year in Harpswell, and others floated for the Casco Bay region have also gone nowhere. In Gouldsboro, a terminal proposal didn't survive one week.
But the welcome mat for LNG is out in Saint John. So as Maine continues to fend off supertankers, Atlantic Canada offers relatively smooth sailing just across the border.
AN ENERGY POWERHOUSE
Historic brick buildings flanked by modern offices. A cruise ship terminal. An indoor public market. Uptown Saint John shares landmarks and a sense of urban renewal that would feel familiar to residents of Portland, Maine.
But most visitors don't realize that Saint John also is at the center of an energy hub that helps keep New Brunswick warm, lit and moving. Lately, people here have been making tough decisions about energy production and the role of Irving Oil, a major player on the provincial energy scene.
Canaport is only one piece of Irving's energy empire in and around Saint John.
From the storage tanks, crude oil is pumped through underground pipelines to an Irving refinery five miles away. The refinery has stood at the downtown's eastern edge for 45 years, fouling the air and triggering occasional accidents, but also providing jobs and needed energy. That may help explain the attitude many residents have about the LNG terminal - it's a cleaner facility far from the city center.
From the refinery, a pipeline runs to an adjacent power plant. Another snakes down the west side of the harbor to Colson Cove. Together they can generate 1,345 megawatts, enough electricity for more than 13,000 homes. From the water, Colson Cove is an ever-present landmark, a cloud-like plume drifting from its smokestacks.
Just down the coast, at Point Lepreau, Atlantic Canada's only nuclear power plant is at a crossroads. The provincial government needs more than $1 billion to refurbish the 600-megawatt reactor. If the money can't be found, NB Power may build a coal-fired plant in a distant community. That could eliminate 700 high-paying jobs in the Saint John area.
The high price of oil and the uncertainty over atomic power present an opportunity for liquefied natural gas, and for Irving. Last year, the company announced plans to build a power plant in Saint John with an output similar to Point Lepreau. It would burn gas offloaded at the LNG terminal.
The prospect of new energy sources is very exciting to area economic development officials.
The project will generate nearly 800 jobs in construction and related work over the next two years, according to a report cited by the Saint John Board of Trade. Overall economic activity could top $1 billion. Supporters also hope the oil refinery and LNG terminal will create the synergy to attract petrochemical ventures.
The terminal, according to the business group, "potentially moves our community from a regional energy hub in petroleum products to a global leader in a new set of industries, creating hundreds of jobs and millions of dollars in tax base."
In one sense, what Irving is doing with liquefied natural gas continues the economic integration it has practiced for decades. Irving is the largest private employer in the province. It owns everything from forestland to paper mills and newspapers, from trucking firms to convenience stores and gas stations. There's a saying in New Brunswick to this effect: It's hard to spend a day in the province without giving a buck or two to the Irving family.
RESPECT FOR IRVING
Irving's dominance cuts two ways. Many people resent the company's power and influence. But they also acknowledge its economic contributions and overall safe track record in handling oil. That acceptance, minus the strong local control inherent in New England, translates into a review process that's less confrontational than what's common in the states.
"I think there is a certain amount of respect," said Germaine Pataki-Theriault, a project manager at the New Brunswick Department of Environment and Local Government.
Pataki-Theriault's agency issued the environmental impact assessment allowing Irving LNG to move forward. The assessment sets 24 conditions dealing with site security, environmental monitoring, pollution cleanup and emergency evacuation planning.
The agency visited an LNG terminal in Maryland, met with U.S. energy regulators and set up a review board that includes a U.S. consultant. Irving blunted potential opposition by choosing to expand an 1,800-acre site zoned for heavy industry, Pataki-Theriault said, a terminal that has safely handled oil tankers for 40 years.
Environmentalists seemed to agree. The province's leading environmental group, the Conservation Council of New Brunswick, raised concerns over whales and sea ducks but didn't try to scuttle the project. The reason: It opposes refurbishing the Point Lepreau nuclear plant and a plan to burn a cheap but dirtier form of oil at Colson Cove. Natural gas is cleaner, the council said, and LNG is less likely to pollute the bay in an accident.
The specter of an accident - or worse - hangs over any LNG debate in New England. Earlier this month, a report prepared at the request of Rhode Island's attorney general determined that terrorists likely could get around security measures meant to prevent an attack on LNG tankers in Narragansett Bay. The consequences, the report said, could range from mass casualties to devastating the local economy.
Worries like that are muted in Saint John. For its part, Irving has worked to downplay them.
Irving held early meetings and "open houses" in neighborhoods near the terminal. It presented workshops on LNG safety and paid for a study that showed any accident would be contained at the terminal. It listened to residents who were concerned with issues ranging from pipeline routes to truck traffic during construction.
An outgrowth of this outreach is monthly meetings of the Canaport Community Liaison Committee.
The 16-member group is made up of residents, fishermen, environmentalists and business leaders. Government officials and consultants also attend.
Irving co-chairs the meeting and controls access. Media coverage is not invited. The Portland Press Herald/Maine Sunday Telegram was strongly discouraged - but not barred - from attending an April meeting, held in a local church hall.
At the meeting, an Irving executive who also serves as co-chair briefed the committee on land clearing. A resident asked about logging truck traffic. Another wanted to know if the group could tour the site.
Irving also came under repeated criticism, by members who said the company should do more to keep the public informed about construction. They expressed frustration about a long-overdue Web site. They discussed the needs for a newsletter. The company responded that it's trying to do a better job communicating and answering questions.
AT ODDS OVER TAX BREAK
But these days in Saint John, the biggest LNG questions are centered on Irving's tax break.
In March, the Saint John city council voted to limit property taxes for the project to $404,000 a year for 25 years. The city's mayor called for the last-minute vote after Irving threatened to cancel the project if denied a tax break.
The move ignited a grass-roots protest movement.
A citizen group collected nearly 11,000 signatures and took them to the provincial legislature, where liberal lawmakers are using the issue to try to unseat conservative supporters from the Saint John area. It's a feisty political battle, but meanwhile, work continues on the LNG terminal. It's unclear whether opponents can rescind the tax break and whether that would bring the multimillion-dollar project to a halt.
What the debate has done, according to Gordon Dalzell, a member of the liaison committee, is cause many people to take a second look at the pros and cons of LNG. Dalzell thinks it's too late.
"It's really kind of an academic exercise," said Dalzell, who represents a small public interest group called Saint John Citizens Coalition for Clean Air. "Too bad it didn't happen last year."
Dalzell spoke over lunch at the Falls Restaurant, which overlooks one of Canada's natural wonders. Here, huge tides force the St. John River to reverse its flow, churning up whirlpools in the rocky gorge below. Tourists come from all over to world to view the Reversing Falls.
But the natural splendor is tempered by a busy highway crossing and the sulphur smell from an adjacent riverside paper mill. A sign outside the mill reads: "Irving Tissue. Irving Pulp & Paper." Nature rarely eclipses commerce here, especially when the commerce carries the Irving name.
"Irving has a massive influence on the life of the province and the life of the community," Dalzell said. "People are used to this big operator. They don't push the panic button so fast."
pressherald.mainetoday.com
[ follow link for photos ]
Staff photo by Gordon Chibroski
Roger Hunter and other lobstermen who dock in New Brunswick's Mispec Bay say the Irving LNG terminal will restrict their movements and take away some of their fishing grounds.
Staff photo by Gordon Chibroski
Oil tanks at Irving Canaport in Saint John, New Brunswick, will soon be joined by a liquefied natural gas terminal. Irving dominates business in the province.
Staff photo by Gordon Chibroski
An artist's rendering gives an aerial view of the LNG terminal and 1,000-foot-long pier now under construction in Saint John, New Brunswick.
Staff Writer Tux Turkel can be contacted at 791-6462 or at:
tturkel@pressherald.com |
