With proposed Liquefied Natural Gas (LNG) facilities at Split Rock on the Pleasant Point Reservation and in Robbinston by Quoddy Bay LLC, along with a competing proposal in Robbinston by Downeast LLC, an oil industry investment banker has raised a concern that has nothing to do with safety or danger to the environment — whether there will be an adequate supply for these sites.

“It’s far more crucial to have a proven supply,” says Matt Simmons, president and CEO of Simmons and Company International, based in Houston, Texas. And the difficulty in finding and having a “proven supply” is complicated by a lack of reliable data, he adds. Simmons has a home in Rockport, Maine.

“The oil industry has a lousy data system,” says Simmons, who has 35 years’ experience in the business. “But compared to the data on LNG it’s pristine. If you build an enormously expensive LNG facility, you’re asking to lose a lot of money.” He adds that converting natural gas into LNG “means that you lose even more of the supply.”

Simmons, the author of Twilight in the Desert — The Coming Saudi Oil Shock and the World Economy published by John Wiley & Sons (reviewed in WWF, August 2005), estimates that 65 percent of the natural gas supply is “past peak,” and he bases his appraisals on 35 years in the industry, and he adds, “The hallmark of our firm is the highest quality research.”

However, Craig Francis, general counsel to the Passamaquoddy Tribe and spokesman for the Governor and the Tribal Council, says that Quoddy Bay would not seriously propose these sites unless it were assured of an adequate LNG supply.

“The tribe is in the process of negotiating with Trinidad and Tobago for a supply that’s guaranteed to last for the term of the lease, 25 years, and more. The supply could last for 50 years,” Francis said. “Quoddy Bay wouldn’t be doing it if didn’t have an adequate supply.

Simmons counters, “From a limited amount of data that I have seen, the reported total proven reserves of Trinidad and Tobago compared to the projects they have now committed would only last about half this time. What everyone seems confident about is how much added reserves will be found over time.”

He added, “This might be true but it is a far cry from being a safe supply for 25 or 30 years. I found the numbers posted on [an] EIA [Energy Information Administration] Country Fact Sheet. Trinidad and Tobago have proven natural gas reserves totaling 25,887 billion cubic feet. If this needed to last for 30 years, it means they could only use 863 billion cubic feet a year or 2.364 [billion cubic feet] per day. So far the LNG train’s committed and planned total over 2 bcf/d and they are also planning a pipeline to deliver gas to neighbor countries of 2.4 bcf/day.”

Simmons concluded, “Anyone telling you they have a 30 year supply is assuming they find vast amounts of added gas, which might happen but it also might not.”

In a related development, both Oklahoma-based Quoddy Bay and Downeast from Washington, D.C., announced that they planned to skip a public LNG meeting in St. Andrews, New Brunswick, scheduled for August 22.

St. Andrews is diagonally across Passamaquoddy Bay from Pleasant Point and directly across from the Robbinston sites.

“We had requested a meeting, but if you check the publicity surrounding it, the officials in St. Andrews were organizing an anti-LNG rally, not a forum to openly and fairly discuss the project,” said Dennis Bailey, president of Savvy Inc. and Quoddy Bay spokesman.

“Our representatives in Canada had serious concerns about security and recommended that we postpone the meeting. We are trying to arrange another meeting in the near future.”

New Brunswick Southwest M.P. Greg Thompson, who opposes the LNG proposals, said that he planned to attend the St. Andrews meeting and expressed disappointment that the company representatives would not be present.

Noting that any LNG tankers bound for either Split Rock or Robbinston would have to travel through Head Harbour Passage, Thompson called the passage “internal Canadian waters” and said that the Canadian government should bar passage to the tankers “in the interest of safety and protecting the environment.”

Head Harbour passage is a narrow channel between New Brunswick’s Deer and Campobello Islands.

“The legislation to do this is already in place,” Thompson said, adding, “I also want to make it clear that I’m not opposed in any way to economic development in downeast Maine. In taking my stand, I believe I’m on the same page as a vast number of Maine citizens.”