A cream pie plastered on the back of a panelist’s head got the press’s attention, but the real value of last month’s LNG conference lay in its sober discussion of a potential fuel source for Maine, and what developing an LNG port would mean for the coast.
Participants – mostly experts in energy investment, technology, state and federal energy policy and safety – described everything associated with LNG development including the design of onshore and offshore terminals, potential sources of supply and the existing network of natural gas pipelines.
Organizers of the conference were Bowdoin College’s Environmental Studies Program, the Island Institute, the University of Southern Maine’s Muskie Center and the Conservation Law Foundation.
The United States accounts for less than 6 percent of the global market for liquefied natural gas, or LNG, said Michelle Michot Foss of the University of Houston. Much of the gas now being produced in places such as Algeria, Trinidad and Tobago, Qatar and Malaysia is already under contract. The resource is “exhaustible,” she and others noted, suggesting that by the time new facilities go on line in the United States, supply options may be limited.
Matt Simmons, an investment banker specializing in energy, noted that by 2000, natural gas had become the United States’ first energy choice to heat buildings and create electricity. “We’ve bet the ranch on natural gas,” Simmons said. At present, imports into the U.S. Northeast are coming primarily from Canada, where fields are already in decline. “We have now written down 61 percent of the [Nova Scotia] reserves,” he said. “Luckily, pipelines were built [during the 1990s] – we wouldn’t build them now.”
Simmons and others mentioned the region’s near miss with a supply crunch at the height of last winter’s heating season. “It was a dangerous situation,” said John Moskol of the U.S. Environmental Protection Agency’s Boston office. “During the cold snap last January we were close to not being able to heat and light the region simultaneously.”
Held at Bowdoin College, the conference was a response to a brewing political storm over LNG on the Maine coast. Recognizing the growing demand for natural gas, developers have proposed facilities in Casco Bay, at Sears Island in Penobscot Bay and at the Passamaquoddy Indian reservation at Pleasant Point, near Eastport. Opposition to LNG in Casco Bay materialized last winter in Harpswell, where voters defeated a plan for a terminal on former Navy land in the town; in Cumberland, where there was interest in a terminal on Hope Island, and in the area around state-owned Sears Island, the site of various proposed energy and industrial developments for years. Maine Gov. John Baldacci has said he won’t support a terminal in a town that opposes it. At present, only the site at Pleasant Point is under active consideration, and even it has generated opposition from within the Passamaquoddy Tribe.
The Energy Bridge, a system being developed by Excelerate Energy of The Woodlands, Texas, is one of several designs for offshore LNG terminals. Rob Bryngelson, a vice president of the firm, said his company’s design – and offshore terminals in general – could be located further from populated areas, away from congested ports. An offshore terminal would reduce onshore impacts such as the need to bring huge LNG ships into harbors. “It’s a better fit with the size of the market,” he said. “It offers flexibility and minimizes the environmental impact, and you can go where there’s market need, not just where it’s politically palatable.”
Energy Bridge systems re-gasify LNG, which is shipped super-chilled to reduce its volume, using two different methods. One employs seawater heat exchange, while another – the “closed loop” method – requires the addition of heat but doesn’t result in the discharge of warmed seawater.
Any offshore terminal would still require large storage facilities on shore.
Maine Gov. John Baldacci “supports LNG if it’s supported by the community,” state energy director Beth Nagusky told the audience. It represents “a new paradigm in the electric power industry.” In the past five years, she noted, 20 new gas-fired electric power plants have been built in the Northeast, five of them in Maine. “We have gone gas in a very big way,” she said. In 1991, natural gas accounted for none of the region’s electrical generation, but by 2003 it provided 45 percent, or 10,000 megawatts. “LNG can be a bridge to the future,” she declared.
It was Nagusky who got the cream pie near the close of the conference’s morning session. “This one’s for John,” declared a masked protester who somehow made it to the stage without being observed. “John” apparently meant the governor, the object of anti-LNG activists in the past. The protester slapped the pie on Nagusky’s head as many in the audience were facing away from the stage, listening to a questioner in the back of the auditorium. Moments after the protester disappeared, Nagusky coolly tasted what had landed on her head, declaring it “delicious.” Conference moderator Richard Barringer denounced the protest as “cowardly.”
Some residents of the island and coastal communities where LNG has been controversial voiced their disappointment at the selection of speakers. Beverly Johnson of Chebeague said organizers hadn’t focused sharply enough on LNG’s economic disadvantages, for example.
“These presentations have essentially not contributed any further information,” declared a man in the audience. “It’s irresponsible.” Another man, a Brunswick resident, decried the lack of success in promoting energy efficiency. Nagusky responded that the governor, at least, is “committed to renewable power and energy efficiency, but there are market hurdles.”
One questioner wanted to know what effect the Passamaquoddy Tribe’s Quoddy Bay project would have on eastern Maine’s Atlantic salmon rivers. No one knew. Karen Blake of Harpswell asked for more information on the global supply of LNG.
“Until it’s discovered, we should assume it might not be there,” responded Matt Simmons, the investment banker. “Sixty-five percent of the current [LNG] base is in decline.”
In response to another question, Simmons offered his thoughts on the energy market in general. “Free markets in energy don’t work,” he said, explaining that they don’t pay for requirements such as reserve margins that protect against disruptions. “We need to say that de-regulation didn’t work,” Simmons said, adding that energy should be more realistically priced than it is in the United States today.
Seth Kaplan, an attorney with the Conservation Law Foundation, one of the conference organizers, was critical of the assumptions often made concerning energy demand, supply and safety. “The risk of a catastrophic event,” he said, “tilts siting [of LNG facilities] toward less populated areas.” The region’s switch to gas has had positive effects on air emissions, he said, but bringing tankers to the coast could mean dredging and other negative effects on the marine environment. Recalling a speech he had once given in a room filled with paintings dating from the era when whales provided the world’s oil, Kaplan called for “a fundamental change in the energy picture, one as basic as the change from whales to petroleum – that kind of change – to energy efficiency and renewables.”
Robin Alden, a former Maine Commissioner of Marine Resources, asked whether losses that would be incurred if LNG tankers sailed through coastal waters would be worth the gains. “The coastal economy is based on small business and entrepreneurial opportunities,” she said. “There is no industrial culture on a lot of the coast. If we change, what losses will there be? Are those losses worth sustaining?”
Specifically, Alden listed the need for security zones, the likelihood that tankers and security vessels would cut lobster gear, the likelihood that fishing couldn’t compete with high-paying industrial jobs, and the loss of productive areas. “Our inshore area out to 50 fathoms is critical for every species in the Gulf of Maine.”