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Arthur MacKay

5474 Rte 127


Bocabec, NB
E5B 3J4

June 30, 2009

Kimberly D Bose, Secretary


Federal Energy Regulatory Commission
888 First Street, NE, Room 1A
Washington, DC 20426

Ref: Downeast LNG DEIS (Docket Numbers CP07-52-000, CP07-53-000, and CP07-53-001)

Dear Ms. Bose:

Comment on the need for the Downeast LNG, Inc. EIS to meet Canadian Regulatory Requirements
Downeast LNG, Inc. And Downeast Pipeline, Docket Nos. CP07-52-000, CP07-53-000, CP078-53-001

As you can see from the attached diagram, for regulatory purposes, the Government of Canada defines seven
components of an LNG operation such as that proposed by Downeast LNG, Inc. Two of these components, the
ship (1) and the jetty (2) will exist in or impact upon, Canadian and provincial New Brunswick jurisdictions. I
submit to you that the draft EIS as incomplete unless the regulatory requirements in Canada and New Brunswick
are addressed within the context of these regulation. Further, I submit to you that, however valued the opinions
of the United States Coast Guard, the waterway suitability study does not replace Canadian and Province of New
Brunswick laws and regulations, particularly those that speak to environmental considerations that have already
been considered during and subsequent to the Pittston oil refinery proposal several decades ago.

Figure 1. Canadian schematic of LNG operational components (Natural Resources Canada). Components 1 and
2 are addressed.

Downeast LNG Inc.`s proposal truly has two important components firmly in Canadian jurisdiction. My
assertion that Canadian law and regulation must be addressed falls into three categories:

1) Passage through Canadian waters (Facility Component 1). Regardless of the highly public views on
UNCLOS and the so-called rights of “innocent passage”, Canada does have sovereign rights and
obligations to protect its critical habitat and marine species under UNCLOS and existing Canada-US
treaties such as NAFTA, the Migratory Birds Convention Act, etc. The fact is, Head Harbour Passage,
Grand Manan Channel and the sea lanes in the Bay of Fundy are regulated under Canadian law and the
regulatory structure presented in the accompanying table clearly shows the path that any developer must
follow to have their project approved in Canada – and this project cannot proceed without passing
through Canadian waters regardless of the position taken by US agencies.
2) Environmental disruption during construction and operation (Facility Component 2). It is
impossible for Downeast LNG Inc. to construct its jetty and related shore-based structures without
creating impacts in Canadian waters and Passamaquoddy Bay proper. Since the sediments of the St.
Croix Estuary are known to harbor toxic substances and since, in any event, sedimentation may cause
detrimental impacts on existing flora and fauna lying just offshore in Canadian waters, it is essential that
Downeast LNG Inc. determines the Canadian regulatory and legal requirements for their development at
Mill Cove and for them to identify in the draft EIS the path they will follow to accomplish this essential
environmental step in the process. Without this information, the draft EIS does not fulfil the
requirements of regulations, treaties, laws, and ecosystem management principles as defined by the
United Nations and most environmental agencies in North America.
3) Layovers (Facility Component 2). There will be numerous occasions when tankers will not be able to
leave or enter Passamaquoddy Bay due to tides and weather. These ships may need to layover in
Canadian waters, causing longer displacement in critical areas than projected in the EIS which assumes
regular “in and out`` activities of the tankers. However, as an example, the very first tanker into
Canaport LNG was forced to hold at sea due to weather. In support of this contention, I have included a
wind assessment chart (Figure 2) that suggests the wind climate is not a benign as implied in the draft
EIS.

Further, the absence of, reference to, or analysis of, Canadian environmental studies is a serious shortcoming
since most of the important work on Passamaquoddy Bay, West Isles and the Quoddy Region are in the Canadian
literature. Of particular concern is the lack of understanding on the risk involved in the passage of large vessels
through Head Harbour Passage. The Canadian government made its position clear during the Pittston oil refinery
hearings based on two important scientific studies that determined: 1) Head Harbour Passage is the most
dangerous marine area on Canada's east coast, and 2) large vessels such as VLCCs should not be allowed to
pass through Head Harbour Passage because of the high value of the ecosystem (biological productivity and
fisheries) in the West Isles/HeadHarbour Passage area and the “unacceptable risk” that large tankers would bring
to this area. While the cargo is different today, nothing else has changed. In fact the value of resource-based
industries has grown with the advent of aquaculture and the growing importance of sustainable manufacturing,
tourism, research, and education.

Table 1. Liquified Natural Gas Regulatory Requirements (Canada). Note: only regulations related to Facility
Components 1 and 2 have been included. Adapted from: http://www.nrcan.gc.ca/eneene/sources/natnat/regreg-
eng.php

Components of a Generic LNG Receiving Terminal


Department or Facility Instrument4 to
Agency with Type1 Assessment3 Legislative Requirement
Responsibility Component2 Issue
Federal
Canadian Federal Depends on each Environmental (for Decision Most LNG facilities will
Environmental project and on comprehensive trigger the Canadian
Assessment what has studies and panels). Environmental
Agency triggered the Note: For screening Assessment Act . For the
environmental level assessment, projects which will
assessment the decision is require a comprehensive
made by the study or panel review
responsible level environmental
authority assessment, the Minister
of the Environment will
have to render a decision
on the environmental
assessment prior to the
responsible authority
being able to issue a
permit, a licence or other
type of decision (land or
money)
Any new or altered works
in, on or over navigable
water require approval
from the Regional
Superintendent of
1,2,3,4,5,6,7 All Navigable Waters
Transport Canada seven Engineering, Protection. Approval
Marine Safety components may safety, comes after, among other
Federal Approval
Navigable Waters be included environmental, things, a positive EA from
Protection depending on the other Transport Canada
scope of the EA Environmental Affairs.
The EA will be triggered
under the Navigable
Waters Protection Act
Sections 5.1, 5.2, 6.4,
10.1, 10.2
Environmental Programs
1,2,3,4,5,6,7 All Environmental
Transport Canada provides an EA report to
seven Assessment
Environmental NWP. See above.
components may (Screening report,
Affairs Federal Environmental Approval from NWP can
be included comprehensive
Environmental only be given with, among
depending on the study, or panel
Programs other things, a positive
scope of the EA review)
EA.
Marine Transportation
Security Regulations
(MTSR) require that the
Transport Canada Certificate of
Federal 1,2,3,4,5,6 Security facility, port and ship have
Marine Security Compliance
a security plan approved
by Transport Canada
Marine Security.
Although the terminal
policy (Termpol TP743) is
not a mandatory
instrument, it is
Transport Canada
Data and recommended as guidance
Marine Safety TRC provides a
operational review to the proponent. The
Regional Director forum to discuss
Federal 1,2,3 process. Analysis Termpol Review
General's Office ameliorations to a
of various safety Committee is an
Termpol Review proposal
surveys. interdepartmental working
Committee, (TRC)
group which applies
relevant acts and
regulations in an
operational context.
Transport Canada Federal 1 Safety Certificates of There are a number of
Marine Safety Compliance operational certificates
Compliance and that an LNG tanker will
Enforcement require in order to operate
in Canadian waters. These
certificates are issued
upon positive inspection
of the subject vessel under
various inspection
regimes, (Port State
Control, Canada Shipping
Act, Canada Labour Code,
etc).
The harmful alteration
destruction or disruption
(HADD) of fish habitat
will require an
authorization pursuant to
section 35 (2) of the
Fisheries Act. The
installation of a jetty or
pipeline watercourse
Fisheries and aquatic
Federal 2,7 Authorization crossings are the most
Oceans Canada environment
likely activities to cause a
HADD, creating the need
for the necessary
authorization and
triggering the
environmental assessment
process under the
Canadian Environmental
Assessment Act.
Management of sediment
and material from certain
construction and
maintenance activities
(e.g. dredging,
Environment environmental and
Federal 2 Permit sidecasting, blasting) may
Canada engineering
require a Disposal at Sea
Permit pursuant to CEPA.
Would trigger an
environmental assessment
under CEAA
All LNG imported into
Canada will require an
import licence pursuant to
Part VI of the National
National Energy
Federal 1 Other Licence or Order Energy Board Act (NEB
Board
Act) or an order pursuant
to the National Energy
Board Act Part VI (Oil
and Gas) Regulations
National Energy Federal 2,3,4,5,6 complete Certificate or Proponent may seek
Board (engineering, Exemption Order Certificate of Public
security, Convenience and
environment, etc.) Necessity pursuant to s.
52 of the NEB Act or an
exemption order pursuant
to s. 58 of the NEB Act to
construct and operate
LNG Import Facility.
Facility would also trigger
an Environmental
Assessment under CEAA.
If LNG facility falls under
NEB Regulation, the NEB
National Energy may be required to set
Federal 2,3,4,5,6,7 Tolls & tariffs Order
Board tolls and tariffs for the
facility under Part IV of
the NEB Act.
Certificates of Public
Convenience and
Necessity become
effective only after
Governor in Council
(GIC) approval. The
complete Governor in
Natural Resources Minister of NRCan
Federal 2,3,4,5,6,7 (engineering, Council approval
Canada recommends approval of
environment, etc.) of Certificates
the NEB's certificate to
GIC. GIC's approval
represents the Cabinet’s
endorsement of the
responsible minister’s
recommendation.
Import licences do not
become effective until
Natural Resources
Federal 1 Other Licence approved by Governor in
Canada
Council. Import orders do
not require GIC approval.
New Brunswick
environmental -
Ministerial NB Regulation 87-83 -
New Brunswick broadly defined to
Determination or Environmental Impact
Department of the include biophysical
Provincial 1,2,3,4,5,6,7 Lieutenant- Assessment Regulation,
Environment and and socio-
Governor in under C-6, the Clean
Local Government economic
Council Approval Environment Act
components
2 (related to Approval to Construct
noise from pile under NB Regulation 82-
New Brunswick driving for the 126 - Water Quality
Department of the pier),3,4,5,6 - environmental and Certificate of Regulation, under C-6, the
Provincial
Environment and landward of engineering Approval Clean Environment Act
Local Government Ordinary High and NB Regulation 97-
Water Mark 133, under C-5.2, the
(OHWM ) Clean Air Act
New Brunswick Emergency Response Plan
Emergency required to be submitted
Measures Provincial by proponent and
Organization and 1,2,3,4,5,6,7 safety Approval approved by NBEMO and
(NBEMO) and City Municipal City of Saint John Fire
of Saint John Fire Chief as a condition of the
Chief NB EIA Approval
Atlantic Pilotage Federal 1 safety, engineering Approval A simulation exercise
involving the LNG vessel,
pier and surrounding
environment must be
developed with input from
Authority (APA) a number of federal
marine agencies and
approved by APA prior to
initiation of construction
of the pier.
A Facility Security Plan
must be submitted by the
proponent to both the NB
Department of Public
Safety and Transport
New Brunswick 1,2, may also
Canada (see above) 6
Department of Provincial include other security
months prior to operation,
Public Safety components
in accordance with the
Marine Transportation
Security Regulations. This
is a condition of the NB
EIA Approval.
Operational and abnormal
New Brunswick
reporting requirements
Department of Provincial 2,3,4,5,6,7 engineering
specified as a condition of
Public Safety
the NB EIA Approval.
The proponent must
develop a tracking
database itemizing all
permit and approval
New Brunswick conditions, as well as the
Department of the commitments made in the
Provincial 1,2,3,4,5,6,7 environmental
Environment and Environmental Impact
Local Government (EIA ) Approval. This
includes follow-up
commitments for
environmental effects
monitoring.
1. e.g., Federal, Provincial, Municipal
2. use numbers from diagram
3. e.g., engineering, safety, environmental, security, other
4. e.g., permit, order, licence, certificate
Figure 2. Sensitivity of the Coasts of New Brunswick to Storm Waves, Stephanie O’Carroll and Dominique
Berube (1999).

Thank you for your consideration.

Sincerely,

Arthur A. MacKay, B.Sc.