LNG: Save Passamaquoddy Bay USA claims Calais LNG continues to “Yank FERC’s chain” in petition to dismiss application.

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Save Passamaquoddy Bay

A 3-Nation Alliance (US • Passamaquoddy • Canada)
PO Box 222 • Eastport, ME 04631 •

Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street, NE Room 1A
Washington, DC 20426

eFiled on 2012 February 17

Re: Calais LNG, Docket Nos. CP10-31-000 and CP10-32-000

Dear Ms. Bose,

On 2012 February 15 Calais LNG filed to the docket claiming to be in negotiations for financing, and that completion of those negotiations — estimated to be completed by 2012 August — is required to re-establish property rights for the site necessary to theproject.

Calais LNG has been without financial capacity for 19 months (since 2010 July) and without interest in the required property for 17 months (since 2010 September) — and according to Calais LNGʼs latest filing, will continue without either one for at least another six months. Even if Calais LNGʼs projection were to prove true, and if FERCwere to allow Calais LNG to remain in permitting, then Calais LNG would have continuously been without financial capacity for 25 months, and without TRI for 23 months. All the while, Calais LNG would have remained ineligible for permitting.

Calais LNG continues to “yank FERCʼs chain” in lieu of permitting compliance. Based on past performance, Calais LNGʼs latest “projection” for compliance should be disregarded as incredulous.

Calais LNGʼs history of noncompliance with state and federal permitting requirements and deadlines is manifested in endless, unfulfilled promises. Simply refer to Calais LNGʼs permitting history:

2010 Jul 13 — Calais LNG wrote at the last minute to the Maine Board of Environmental Protection (BEP) requesting postponement of thescheduled July 19–23 BEP quasi-judicial permit hearing. In seeking postponement, Calais LNG claimed that it could not meet long-standing information requests. (As discovered later, Calais LNG had actually lost its financial capacity to continue in the permitting process.)

2010 Jul 14 — Referring to Calais LNGʼs July 13 request to delay the BEP permitting hearing, BEP chairperson Susan Lessard upbraided Calais LNG for causing “considerable cost in time and resources tothe Board and other parties,” but reluctantly postponed the hearing, nonetheless. (See 2010-07-14_BEP2CLNG.pdf)

2010 Jul 21 — Calais LNG announced that it had early in the month lost financial backer GS Power Holdings. (Financial capacity is a requirement forState of Maine permitting.)

2010Aug 9 — Calais LNG requested from the BEP an extension beyond the previous deadline of August 11 to reestablish financial capacity.(See 2010-08-12_BEP2CLNG.pdf)

2010 Aug 12 — Calais LNG indicated to the BEP it would withdraw from permitting if it could not obtain a replacement investor by 2010 September 11.

Calais LNG asked the State of Maine to pay for the natural gas pipeline required to send Calais LNGʼs natural gas to Boston.

Maine BEP granted Calais LNG a permitting extension for an undefined limited period.

2010 Aug 31 — Calais LNG failed to renew its option to purchase its proposed terminal site property.

2010 Sep 1 — As a result of not renewing its option to purchase by August 31,Calais LNG lost title, right, or interest (TRI) in its proposed terminal site property, but withheld that loss from the BEP and FERC.

2010 Sep 11 — Calais LNG failed to withdraw from Maine permitting, even though, on 2010 August 12, it promised to do so if it had not acquired financial capacity by 2010 September 11.

2010 Sep 13 — Calais LNGʼs attorney wrote to the BEP indicating that it had not acquired financial capacity, stating “it is not now possible to predict precisely when the discussions might be concluded such that a new financial partner can be identified.” Calais LNG then requested an additional 30 days to complete securing financial capacity. Further, Calais LNG requested postponement of the scheduled September 15 BEP conference of council until the week of 2010 October 11; but, promised to supply the BEP with a status update on 2010September 30 or sooner if financial negotiations were to becompleted prior to that date. (See 2010-09-13_CLNG2BEP.pdf)

2010 Sep 15 — At a scheduled BEP procedural conference on this date, Calais LNG failed to inform the BEP that the applicant had lost the TRI required for state permitting.

2010 Sep 30 — Calais LNG failed to update the BEP with the projectʼs financial status, as it had promised on 2010 September 13 to do by September 30.

2010 Nov 17 — Owners of the land required for the Calais LNG terminal site informed the BEP that Calais LNG no longer held TRI in the land. (See 2010-11-17_Carothers_TRI.pdf)

2010 Nov 23 — Calais LNGʼs attorney wrote to the BEP requesting another permitting continuance, and finally admitted the loss of TRI.

Calais LNGʼs lawyer then argued that it was “transitioning the project to a new financial partner,” and claimed that TRI negotiations with the land owner were “ongoing. He further claimed that once the management transition occurred — “and project funding is in place” — Calais LNG would secure TRI in the required property. (As of 2012 February 17, neither financial capacity nor TRI have been reestablished by Calais LNG.)

The companyʼs attorney wrote that if the BEP were to recommence permitting, it would be appropriate for the BEP to summarily dismiss Calais LNGʼs applications for lack of TRI and financial capacity. (See 2010-11-23_CLNG2BEP.pdf)

2010 Dec 1 — BEP deadline for Calais LNG to obtain financing was not met.

2010 Dec 2 — Calais LNG wrote to the BEP, claiming that “new management,” North East Energy Development, LLC (NEED), had bought out the financial interests of GS Power Holdings. In truth, NEED is the original managing partnership between Calais LNG principals Ian Emery and Arthur Gelber in the Calais LNG startup venture, not “new management.” Calais LNG indicated to the BEP that it anticipated being able to reestablish TRI by 2011 January 15.Calais LNG ultimately failed to do so. (See 2010-12-02_CLNG2BEP.pdf)

2010 Dec 3 — FERC demanded that Calais LNG provide a schedule by December 13 regarding when Calais LNG would secure TRI and financial capacity.

2010 Dec 13 — Calais LNG failed to comply with FERCʼs deadline to supply as chedule for reestablishing TRI and financial capacity.

2010 Dec 14 — For lack of TRI and financial capacity, Calais LNG was forced to withdraw from Maine permitting. Had it not withdrawn, its applications would have been dismissed by the BEP. (See 2010-12-14_CLNG_withdrawal_BEP_1.pdf and 2010-12-14_CLNG_withdrawal_BEP_2.pdf)

2010 Dec 16 — BEP accepted Calais LNGʼs withdrawal from state permitting. (See 2010-12-16_BEP_accepted_withdrawal.pdf)

2010 Dec 17 — Calais LNG filed to the FERC docket in response to FERCʼs December 3 letter for a schedule to secure TRI and financing. Calais LNG admitted lack of TRI and financial capacity, claiming to have made “substantial progress in attracting investment and [had] commenced negotiations with the project site landowner toward a new arrangement,” and asked to remain in the permitting process; however, Calais LNG did not comply with FERCʼs request to supply a schedule for reestablishing TRI and financial capacity. As of 2012 February 17, no actual evidence exists that (1) negotiations have occurred with the project site landowner, or that (2) Calais LNG has negotiated with anyone regarding financial backing. (See 2010-12-17-CLNG2FERC.pdf)

Save Passamaquoddy Bay filed to the FERC docket, alerting FERC to Calais LNGʼs failure to respond to FERCʼs December 13 deadline to supply a schedule for reestablishing TRI and financial capacity. (See 2010-12-17_SPB_comment2FERC.pdf)

2011 Jan 15 — Calais LNG failed to reestablish TRI by this date as it had indicatedon 2010 December 2 that it would do.

2011 Jul 13 — Sometime before this date, Calais LNG vacated its offices in downtown Calais, Maine.

Calais LNG originally chose to withhold information from the State of Maine and FERC that is critical to its standing in the permitting process of both, and has used a barrage of baseless, unfulfilled promises to linger in the permitting process.

Calais LNGʼs latest filing continues its modus operandi — repeatedly skirting the financial capacity and TRI issue with baseless, nebulous excuses while attempting to continue its endless failure to actually qualify for permitting.

In summary:

  1. Calais LNG has no financial capacity.
  2. Calais LNG has no project site.
  3. Calais LNG has no standing in the FERC permitting process.
  4. Calais LNG has no local presence other than a phone number.
  5. Calais LNG lost its Goldman Sachs (via GS Power Holdings) investor after having spent $25 million, making it unrealistic that another investor would ever take on this project.
  6. Calais LNG has insurmountable barriers due to its proposed location.
  7. Calais LNG misled and lied during the State of Maine proceedings. The applicant has no credibility.
  8. The US has a decades-long domestic supply of natural gas, as indicated by US natural gas industry players, mooting any need for Calais LNGʼs imports.
  9. Calais LNG is gaming the FERC system in the same way it gamed the Maine system, to the detriment of involved agencies and the public.

Considering Calais LNGʼs ongoing — and latest 17-to-projected-25 months or longer — lack of credibility and standing, Save Passamaquoddy Bay again asks FERC to finally dismiss Calais LNG without prejudice from permitting.

Very truly,

Robert Godfrey
Researcher & Webmaster


2010-07-14_BEP2CLNG.pdf — BEP upbraids Calais LNG for requesting hearing postponement.
2010-08-12_BEP2CLNG.pdf — BEP grants a limited-time extension for Calais LNG to obtain new financing.
2010-09-13_CLNG2BEP.pdf — Calais LNG claims to have two interested investors, requesting another 30-day extension.
2010-11-17_Carothers_TRI.pdf — Property owners notify BEP that Calais LNG has no title, right, or interest in the property.
2010-11-23_CLNG2BEP.pdf — Calais LNG falsely claims to be in active negotiations with landowners, admits applications could be summarily dismissed.
2010-12-02_CLNG2BEP.pdf — Calais LNG claims project is under new management, claims TRI will be established by 2011 Feb 15.
2010-12-14_CLNG_withdrawal_BEP_1.pdf — Calais LNG falsely blames the national economy for having to withdraw from state permitting.
2010-12-16_BEP_accepted_withdrawal.pdf — BEP accepts Calais LNGʼs withdrawal from permitting.
2010-12-17_CLNG2FERC.pdf — Calais LNG falsely claims to have made progress in attracting investment and to be in negotiations with landowner.
2010-12-17_SPB_comment2FERC.pdf — Save Passamaquoddy Bay request that FERC dismiss Calais LNG for lack of standing.

CC: Sen. Olympia Snowe
Sen. Susan Collins Rep.
Mike Michaud
Rebecca Boucher, Esq.
FERC Calais LNG Service List


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