Fate of two LNG terminals in Maine hinges on dispute over right of innocent passage

LNG terminals have been proposed for Robbinston and Perry, Maine, on Passamaquoddy Bay. To reach the terminals, tankers would have to pass through the Canadian waters of Head Harbour Passage.  Depths shown are in meters. (Ginny Howe Illustration/Source: Maptech Inc. and Quoddy Pilots USA)

It’s a localized dispute at the easternmost harbor in the United States, pitting economic interests in Maine and an American Indian tribe against their bayside neighbors and environmentalists across the border in New Brunswick, Canada.

Ultimately, though, the battle over passage rights to Passamaquoddy Bay may not get settled in Maine or New Brunswick — or even Washington or Ottawa. This one could go all the way to the World Court. Two U.S. companies are seeking federal approval to build liquefied natural gas (LNG) terminals along the bay in Washington County, Maine. The developers are relying on the longstanding maritime right of innocent passage that they say allows tankers to carry LNG through Head Harbour Passage, which is in Canadian waters.

Canada’s government has vehemently opposed the siting of the LNG terminals. The Canadian officials argue that there is no right of innocent passage in this case because it’s too dangerous to ship LNG through the waterway.

While innocent passage is perhaps the most ancient principle of admiralty law, century-old treaties also exist between the United States and Canada governing shipping in the Bay of Fundy and Head Harbour Passage. The native Passamaquoddy Tribe, which generally supports the LNG projects, claims sovereignty over some of the area involved.

International maritime lawyer Frank Wiswall of Castine, Maine, said a straightforward resolution of the dispute is hampered further by the fact that the United States has never ratified the United Nations Convention on the Law of the Sea.

“That is an exceptionally complicated situation,” Wiswall said. “That is not your normal right-of-innocent passage case, because that waterway is subject to treaties between the U.S. and Canada that apply, and you have a tribe on both sides there that may have rights that are not normally claimed in these situations.”

The doctrine of innocent passage guarantees the right of one nation’s vessel to travel peacefully through another nation’s territorial archipelagic waters without calling at a port in that territory, as long as the ship “does not put the coastal state at undue risk,” Wiswall said.

Two U.S. companies, Quoddy Bay LNG and Downeast LNG, have submitted separate proposals to build terminals and re-gasification plants on the Maine side of the bay. Tankers would need to transit Head Harbour Passage to reach the terminals.

Head Harbour Passage is in the area of the notorious “Old Sow,” the largest tidal whirlpool in the Western Hemisphere. The difference between low and high tide can be as much as 27 feet, and fog often shrouds the area. Canada is attempting to deny passage on the basis of its claims that the LNG shipments are too dangerous.

Canada’s ambassador to the United States, Michael Wilson, in February 2007 delivered a letter to the U.S. Federal Energy Regulatory Commission urging the FERC to suspend its licensing review of the Maine LNG projects.

“The impact of the proposed siting of the terminals, and the potential passage of LNG tankers through the environmentally sensitive and navigationally challenging marine and coastal areas of the sovereign Canadian waters of Head Harbour Passage, present risks to the region of southwest New Brunswick and its inhabitants that the government of Canada cannot accept,” Wilson wrote. “We are therefore prepared to use domestic legal means to address our concerns and prevent such passage from occurring.”

The FERC responded by asking Canada to release the results of a study the Canadians claim supports their position on the hazardous nature of the LNG shipments. Canada didn’t release its study, and the FERC didn’t stop the review process.

Alain Cacchione, spokesman for Canada’s Department of Foreign Affairs and International Trade, said his government is “disappointed” by the FERC’s failure to suspend the regulatory review. He promised that Ottawa would be steadfast in defending New Brunswick’s wellbeing by prohibiting LNG transit in the passage.

“The waters of the Bay of Fundy including Head Harbour Passage and Passamaquoddy Bay are Canadian internal waters. Therefore, Canada maintains the right to regulate their use,” Cacchione told Professional Mariner.

“Canada has concerns about the potential impact of LNG tanker traffic on marine safety in the narrow passage of Head Harbour as well as the local wildlife and fishing industry,” he said.

Environmental groups in New Brunswick have tried to convince government officials to declare the passage an emergency marine protected area. They argue that endangered whales already are being killed by increased freight traffic in recent years.

The LNG backers in Maine have claimed Canada is only trying to thwart the projects on the U.S. side because they may compete with Canadian proposals for LNG projects in the Maritime Provinces.

Quoddy Bay LNG said Canadian opposition to its project violates international law, the bilateral maritime treaties and even the North American Free Trade Agreement.

“Canada has recently approved the transit of LNG tankers through its waters in order to reach LNG facilities along its northeast coast, and thus Quoddy Bay anticipates that Canadian authorities, along with U.S. authorities, can ensure the safe and secure transit of LNG ships to the Quoddy Bay LNG facility,” the company said in a statement.

Capt. Robert Peacock, who has been a harbor pilot at nearby Eastport, Maine, since 1976, said Head Harbour Passage is safe enough even for the largest LNG tankers. Such ships can be over 930 feet long and about 150 feet wide with a draft of 38 feet.

Peacock is one of three pilots on the U.S. side and two on the Canadian side of Passamaquoddy Bay; four of the men have decades of experience and one is new. Peacock and his colleagues routinely pilot bulk carriers through Head Harbour Passage. These ships typically carry timber, wood pulp, fish products, crushed stone and the fertilizer component ammonium nitrate. Calling weekly is the bulker Alice Oldendorff, which is 633 feet long and 105 feet wide with a draft of 40 feet.

“The four of us have had 5,000 trips through Head Harbour without any incident whatsoever,” Peacock said. “We handle ships with a deeper draft than is being proposed by any (LNG project). As long as you do your timing right — the tide and current — there’s no problem at all.”

At 200 to 400 feet, “it’s the deepest channel of any channel in the continental United States, for sure,” Peacock said. The channel also is “extremely wide — 1,700 to 1,800 feet at its narrowest.”

The right of innocent passage for ships is most recently affirmed in the International Law of the Sea. Canada is a signatory to the U.N. convention and ratified it. Disputes involving the convention are resolved through the International Tribunal for the Law of the Sea in Hamburg, Germany. U.S. officials signed onto the convention but the Senate has never ratified it.

Because the United States hasn’t ratified it, it is not eligible to take the Head Harbour Passage dispute to the Hamburg tribunal. The case instead could end up at the International Court of Justice in The Hague, said Wiswall, who is a former chairman of the International Maritime Organization’s legal committee.

Dean Girdis, president of Downeast LNG, said he doesn’t expect the disagreement with Canada to cause project delays or to become a drawn-out international standoff. He has urged Transport Canada simply to spell out any specific safety hazards that it may have identified.

“We will work out a solution that will satisfy the safety concerns that have been raised,” Girdis said. “We’re very confident it will be worked out. It hasn’t really slowed us at all. The permit process continues, full steam ahead.”

To be sure, extensive safety precautions will be needed for the LNG tankers, Peacock said. Four brand new z-drive tractor tugs will be necessary, each with horsepower of 5,000 or more. A one-way traffic zone will be enforced when an LNG tanker is present. Daytime transit and two-mile visibility will be required, and winds may not exceed 25 knots. Aids to navigation will need to be added or upgraded, the pilot said.

Even if the United States and Canada never arrive at an official resolution, a permanent impasse still could allow LNG traffic to operate in the passage, Girdis said.

“They may ultimately agree to disagree, like they do in other boundary disputes.
Traffic still goes on,” Girdis said.

The worst-case scenario for the LNG developers would be if the case goes all the way to The Hague, Wiswall said. That’s the same court that in 1984 mandated the North Atlantic fishing-rights boundary known as the “Hague Line” — a ruling that the United States considered very unfavorable.

No one knows if the World Court judges may be sympathetic to Canada’s claim that the LNG shipments through tricky Head Harbour Passage would be too hazardous to qualify as innocent.

“It puts the United States at a disadvantage going out of the gate,” Wiswall said. “This is not an open-and-shut matter … The last time the United States went to The Hague on a territorial matter, the United States got clobbered.”

In the end, it could be good old-fashioned diplomacy between friends that determines the fate of Passamaquoddy Bay commerce. The United States and Canada, each the other’s largest trading partner, are embroiled in a few unrelated disagreements regarding NAFTA trade issues, especially lumber, wheat and other agricultural commodities.

“It may be possible to do some horse trading,” Wiswall said.

By Professional Mariner Staff