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Delays could cause Maine to lose ground in a race to supply energy to Northeast cities.

By TUX TURKEL, Staff Writer November 17, 2009

Supporters of liquefied natural gas terminals have thrown a late snag into what has been an orderly process to create rules for developing multibillion-dollar energy corridors in Maine.

LNG representatives want to extend the current moratorium on energy corridors and create a government commission to do more reviews. Their proposal was filed late last week with the special study group already debating policy for energy corridors.

The possibility of a delay in that process is significant because Maine and Atlantic Canada are in a race with the Midwest to supply energy to Northeast cities. The growth of renewable energy, thousands of jobs and billions of dollars in economic development are at stake, Maine officials say.

The LNG proposal caught a co-chair of the study group off guard. Continuing the moratorium could threaten economic development in the state and hold corridor plans hostage to LNG supporters, said Sen. Barry Hobbins, D-York, co-chairman of the Commission to Study Energy Infrastructure.

"This is kind of a curveball and I'm disappointed," Hobbins said Monday. "It is completely contrary to everything we've been doing."

But Keith Van Scotter, who serves on the study group and is president of Lincoln Paper and Tissue, said his intent isn't to stifle economic development. He said he wants Maine to benefit from energy corridors by using money from leasing the corridors to reduce electricity costs.

The differing points of view could come to a head Wednesday, when the study group holds its final scheduled meeting in Augusta to seek consensus before its Dec. 2 deadline to file recommendations. The group's advice will go to the legislative committee that handles utility issues, and be presented as a proposed law this winter, when the Legislature reconvenes.

The 13-member study group has been meeting since September to seek an agreement on how Maine can benefit from proposed transmission projects that will carry power from Canada to the Northeast's population centers.

A vision is emerging in which electricity from wind turbines, tidal currents and water power heats homes and even propels vehicles, with contributions from gas, wood and nuclear energy.

Maine, strategically located between Northeast population centers and the abundant resources of eastern Canada, is well positioned to take advantage of that vision. At the same time, the state wants to supply the Northeast with its own power from the wind, tides and liquefied natural gas.

Those factors have developers proposing new transmission lines, undersea power cables and other energy corridors, presenting a once-in-a-lifetime opportunity for the state.

The study group was formed after businesses that support LNG development in Passamaquoddy Bay complained that Maine was giving in to Canadian interests, at their expense.

The proposed LNG projects can be reached only through Canadian waters, and Canada says it won't allow tankers through the narrow Head Harbour passage. But Maine business interests say Canada's motivation is less about safety and more about limiting competition to an LNG project built recently by Irving Oil/Fort Reliance in Saint John, New Brunswick.

When a moratorium was proposed in the spring, developers of corridor projects worth $5 billion in Maine said they would look elsewhere. The study group and its Dec. 2 deadline was a compromise, to give the state reasonable time to lay down rules.

Some areas likely to have broad agreement have emerged in the study group.

The lines would preferably run underground, chiefly along interstate highways and state-owned railroad beds. Petroleum and natural gas might run next to electricity. "On-ramps" would exist for in-state power generators. A panel of state agencies would review plans, and appraisers would estimate how much developers should pay the state in lease fees.

Other ideas are controversial, such...