While the LNG proposals for Passamaquoddy Bay hinges on an impossible idea, proposing to situate an LNG complex on tribal land and in Passamaquoddy ancestral waters needlessly disrupted many lives. It’s for them, their families and Passamaquoddy descendants, that we celebrate the conclusion of an otherwise misguided scheme for LNG.

Like other fly-by-night companies, Quoddy Bay LLC’s efforts only benefited a few. Its promises for further development are mere puffs. The company has its yes-men fully onboard, but it follows if unaddressed that only invites more problems.

NN is encouraged by the Bureau of Environmental Protection’s (BEP) unanimous decision to allow Donald Smith to concede its BEP permitting application (11/06/08). The remaining LNG proposals for Passamaquoddy Bay are no different, each are equally untenable.

Even as Downeast LNG had earlier proclaimed that Canada was cooperating with its effort, the developer is today (11/08/08) quoted as being offended by Canada’s decision to disallow tankers from transiting Passamaquoddy Bay.

Elected state representatives ushered in both Quoddy Bay LLC and Calais LNG. Donald Smith’s company was fast-tracked by local elected officials, state officials, and a state lobbyist. It should then come to no surprise that self-dealing transactions are usually at someone else’s expense. Nor is it unreasonable to expect that those who gain opportunities as a result of their elected position should now have to account for them.

Donald Smith’s decision to withdraw from the BEP permitting process effectively serves as a concession, regardless of what might be spun by his yes-men. Quoddy Bay LLC’s office has been closed for months, further support for its irrelevance.

The uncomfortable truth for some is that in 2004 Donald Smith claimed that an LNG facility could be approved, constructed and operational by 2009. We know that to be false.

Donald Smith's recent request to forgo lease payments to the tribe for another four years is what it is -- an indefensible default.

Smith's lawyer submitted to the BEP (11/06/08) its reasoning for withdrawal:

1) Bad Economy

2) No Gas Supply

3) No financing

The latter two have always been true but what has changed is that the inevitable has become reality in 2008--Donald Smith's project tanked.

Needless to say, Donald Smith’s company is already in default for its lease payments to the tribe, but with its arrearages compounding and accruing, simply asserting that its payments might resume in four years retroactively is typical of a business culture with a deadbeat refrain.

Smith Co-Generation (Quoddy Bay LLC’s parent corporation) has a pattern for default. Donald Smith must find comfort in knowing that a few local yes-men will now do his bidding to amend the cancellation clause to its ground lease agreement – which favors the company over and above the tribe’s interests.

On top of its sweetheart deal with the BIA (BIA’s sweeping approval of its ground lease in 2005) -- what is Smith asking for -- postpone today’s payment to an unknown future date. Sound familiar?  Postponement to an undisclosed date is itself a cancellation.

Despite any recent crushing blows, Donald Smith wants even more from the tribe:

First -- let him off the hook for what he already owes the tribe.

Secondly, when (or if) he resubmits applications to the FERC and BEP, he promises to pay for any arrears.

Thirdly, if he reapplies at some point in the unknown future, it’s only then will he restart any regular payments. But in case you may have some doubts, he’ll add a bonus to those payments.

Finally, he will sell tribal members gas at cost, and sell “any surplus” electricity to the tribe (much like his request to reset the clock for payments which is contingent upon re-applications for necessary permitting, there is absolutely no explanation as to how this all would work or if it is even possible). 

In exchange for what you ask:

1. 1)Forget about the last four years. 2) Give the company another nine years to do what it had promised to do back in 2004.
   

Meanwhile, the yes-men are supposed to convince Indian Township’s tribal government to go along with the land sale in Perry only on a deferred payment basis. Nothing is mentioned about any interest payments. In order to expedite this new deal, Donald Smith wants to replace Pleasant Point’s governor with a council member – one guess as to whom this is.

It sounds to me that the company has breached its agreement and is busy via its yes-men to reconfigure a new agreement and a new tribal government. Indian Township’s tribal government should pay close attention to this, and make something that went so wrong right. Stop sweetheart deals, and stop self-dealing transactions.

Vera Francis

NN Organizer