NEW BRUNSWICK USING U.S. REGULATORY PROCESS TO FIGHT MAINE

UNCLAS HALIFAX 000009 SIPDIS SIPDIS DEPARTMENT FOR WHA/CAN, EB/ESC/ISC, OES/OA, AND L/OES DOE FOR P&I E.O. 12958: N/A TAGS: ENRG EWWT EPET CA SUBJECT: NEW BRUNSWICK USING U.S. REGULATORY PROCESS TO FIGHT MAINE LNG PROJECTS ¶1. (SBU) SUMMARY: In a meeting in Fredericton on March 2, a senior New Brunswick official told the Consul General (CG) that the province will continue to challenge the two Maine liquified natural gas (LNG) terminal projects using the legal avenues afforded by its intervener status within the Federal Regulatory Commission (FERC) process. CG expressed appreciation for Premier Graham's decision to work within the U.S. regulatory process but stressed the U.S.Government's position that-notwithstanding the Government of Canada's claims of internal waters-all vessels have a non-suspendable right of innocent passage into and out of Passamaquoddy Bay through Head Harbor passage. END SUMMARY. ¶2. (SBU) After a three day, WHTI-related visit to communities and ports of entry along the northern portion of the Maine-New Brunswick border (septel forthcoming),CG stopped in Fredericton on March 2 to meet with Jim McKay, Deputy Minister for Intergovernmental and International Relations and Lynn MacKay, Senior Advisor on U.S. Relations in the North American Division of that ministry, to discuss recent developments relating to the Maine LNG projects and WHTI. ¶3. (SBU) With regard to the proposed Passamaquoddy Bay LNG terminals, CG expressed appreciation for Premier Graham's decision to work within the U.S. regulatory process by seeking and obtaining intervener status with the FERC. New Brunswick's motion to the FERC to suspend the hearings on the projects, which cited previous FERC rulings granting similar motions, showed that the province was willing to work within the rules of the system to defend its interests. Standing in stark contrast to New Brunswick's approach is the Canadian federal government's efforts to short-circuit the U.S. regulatory process altogether. CG also stressed the USG's position that-notwithstanding the GOC's claims that Head Harbor passage constitutes internal waters-all vessels have a non-suspendable right of innocent passage into and out of Passamaquoddy Bay through Head Harbor passage. ¶4. (SBU) Deputy Minister McKay said that Premier Graham had taken the politically unpopular decision to participate in the FERC process because it was the right way for the government to proceed. New Brunswick intends to continue to challenge the LNG projects using the legal avenues afforded by its intervener status within the FERC process. The motion to suspend the FERC hearings is part of this approach. Since New Brunswick accepts that vessel transit through Head Harbor Passage is under the sole jurisdiction of the GOC, and since the GOC has declared (most recently via Canadian Ambassador Wilson's letter to the FERC) that it will not allow LNG tanker to transit Canadian waters, the province felt that a motion to the FERC to suspend the hearings was warranted based on the Long Beach, California precedent. That said, DM McKay also stressed that the government had instructed all provincial officials to continue to cooperate fully with both the FERC and the U.S. Coast Guard as those agencies worked through their respective processes relating to the project proposals, especially the environmental impact assessments. ¶5. (SBU) COMMENT: It is clear from our discussions with the Deputy Minister that the New Brunswick government intends to use whatever legal channels and maneuvers available to it within the FERC process to seek to prevent the Maine LNG terminal projects from going forward. Should FERC reject the province's motion to suspend the hearings, we can expect that New Brunswick, through its Washington lawyers, will continue to file others in an effort to tie up the projects with the ultimate aim of defeating them. END COMMENT. FOSTER