Some people may be celebrating the announcement that Calais LNG is putting its proposed $1 billion liquefied natural gas facility on hold before it faced a much-anticipated showdown with the Maine Board of Environmental Protection. We aren’t among the revelers, however.

The history of LNG in Maine has been a series of disappointing setbacks like this, and Mainers pay for them with high energy rates and an tough climate for Maine industry. This is an opportunity that looks like it’s slipping away.

Calais LNG says it wasn’t Maine’s regulators that led it to walk away from what had already been a major investment. It was unrelated problems between its financial backer, Goldman Sachs, and the federal government, and the unavailability of commercial credit that doomed the project.

That the problems were in Washington and Wall Street and not in Maine offers some comfort, but not much. Maine needs to diversify its available sources of energy, and LNG is one option that is fading fast. Of three proposed projects, only one, Downeast LNG, is still active in the regulatory process.

The argument for LNG is a strong one. Maine is the most oil-dependent state in the union and, for historical and geographical reasons, Maine consumers have only limited access to natural gas. What gas we do have is restricted by a pipeline system that does not lend itself to easy expansion.

As a result, Maine industry pays high oil prices for heat, putting it at a competitive disadvantage with other regions of the country.

An LNG facility would create a way for low-cost natural gas to reach big industrial users and then homes and smaller businesses. The ability to store gas would create reliable competition for Canadian gas producers who dominate the pipeline system. Such competition could also lower gas prices for Maine electrical generators, who mostly burn gas.

But none of that can work unless Maine can find a way to site and permit a facility.

That may include changes to state law to make the regulatory process more predictable, if not less expensive.

But it will also take a full-court-press by the state and federal government to use all available influence to reduce Canadian objections to a Maine-based facility that would provide competition for Canadian gas. With Canada interested in reaching Southern New England with hydro and nuclear-powered electricity, Maine would seem to have enough leverage to help LNG.

Maine never needed three of these facilities, but the state would benefit from one. If LNG fails, Maine will be left with few options to diversify its energy mix in substantial ways.


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