LNG developers in the Northeast meet resistance

It's an unlikely spot to provoke an international dispute: a scraggly, unpaved lot on the Pleasant Point Indian Reservation with a striking view of Passamaquoddy Bay and the forested Canadian islands on the far shore. But that's just what has happened here as US energy developers clash with Canada's efforts to protect tourism, fisheries, and wildlife on the bay.

A few years from now, this could be the site of a sprawling industrial facility where liquefied natural gas (LNG) is unloaded from tankers, reheated into gaseous form, and pumped via pipeline to Boston, 325 miles to the southwest. Two more terminals have been proposed further up the bay, one of the last places in the Northeast where undeveloped rural land abuts protected, deep-water anchorages.

One proposed facility has stirred up a hornet's nest in St. Andrews, New Brunswick, a genteel resort across the mile-wide bay from where the tankers would tie up. The Canadian government, which controls the deep-water passage into the bay, has said it won't allow the LNG tankers through at all, citing environmental and safety concerns. The US maintains it has undisputed right of passage to its ports, and the conflict could wind up in international court.

"This is one of the last natural areas in our country," says Linda Godfrey of Save Passamaquoddy Bay, an umbrella group for LNG opponents on both sides of the border. "It is just totally incompatible with industrialization."

The dispute highlights a challenge for LNG developers seeking to fulfill US energy needs: finding places to build safe facilities without meeting resistance from local – and sometimes not-so-local – groups.

"You start looking up the coast and the first place that meets all the criteria is Passamaquoddy Bay," says Brian Smith of Quoddy LNG, the firm that wants to build a terminal here. "You want to be as close as you can to the big markets but in an area remote enough to make it an unattractive target" for terrorists.

But even here, in an impoverished region with an industrial heritage and high unemployment, developers are meeting stiff resistance to land-based LNG terminals, raising questions about whether they can be sited in the Northeast at all.

Fueling the nation

Nationally, the need is clear: US demand for natural gas is expected to grow by 40 percent by 2025, while North American supplies dwindle. Experts say there's lots of gas elsewhere in the world that can be chilled into liquid form and shipped to the US on special tankers.

But the US has only five LNG terminals – in Massachusetts, Maryland, Georgia, Louisiana, and the Gulf of Mexico. The National Petroleum Council, a federal advisory body, says the US needs to expand three of these and build six to eight more to meet future demand.

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