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Cablegate: Maine Lng Issues - New Brunswick Committed to Stopping Lng

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RR RUEHGA RUEHQU RUEHVC
DE RUEHHA #0215 3121848
ZNR UUUUU ZZH
R 081848Z NOV 06
FM AMCONSUL HALIFAX
TO RUEHC/SECSTATE WASHDC 1131
RUEHOT/AMEMBASSY OTTAWA 0414
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHHA/AMCONSUL HALIFAX 1200

UNCLAS HALIFAX 000215

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EPET ENRG EWWT PBTS PGOV PREL PINR CA
SUBJECT: MAINE LNG ISSUES - NEW BRUNSWICK COMMITTED TO STOPPING LNG
TANKERS IN PASSAMAQUODDY BAY

REF: 05 HALIFAX 0277

1. (SBU) SUMMARY: The new Liberal government in New Brunswick
is continuing the fight to stop liquified natural gas (LNG)
tankers from transiting through Passamaquoddy Bay, which lies
between Maine and New Brunswick. New Consul General (CG) was
briefed by a senior member of the New Brunswick civil service
who will be explaining the province's position in a meeting with
US Federal Regulatory Commission (FERC) officials later this
month. CG underscored the US position that freedom of
navigation prevails in Passamaquoddy Bay and that we do not
accept Canada's claim that the Bay constitutes internal waters.
END SUMMARY

2. (SBU) On October 25, CG met with high-level officials of the
New Brunswick government including the province's Deputy
Minister of Intergovernmental Affairs, Jim McKay, a long-time
post contact. McKay and his colleagues were quick to emphasize
the existing warm and close relationship between New Brunswick
and the United States, and in particular with the neighboring
state of Maine. McKay saw the same history of close ties
continuing into the administration of new Liberal premier Shawn
Graham who narrowly toppled the incumbent Tory government of
Bernard Lord in a September 18 provincial election (Halifax
0179).

3. (SBU) While underscoring the close relationship, McKay also
highlighted a major issue for the province - the planned
construction of two LNG terminals on the Maine side of
Passamaquoddy Bay. The bay, located in southern New Brunswick,
is shared by both the United States and Canada. As with the
previous Tory government of Bernard Lord, the province strongly
opposes the building of these plants. McKay was adamant that
the large LNG tankers which would serve the plants pose an
environmental, economic, social and safety threat to
Passamaquoddy Bay and those communities that depend on the bay
such as the resort town of St. Andrews.

4. (SBU) The Graham government is particularly concerned about
tankers transiting Head Harbor Passage, a narrow stretch of the
Bay near Campobello Island (where President Franklin Roosevelt
had a summer home and which is now an international park). McKay
espoused the province's position that no LNG tankers be allowed
to transit through the passage, a position staunchly championed
by the New Brunswick representative in Prime Minister Harper's
cabinet, MP Greg Thompson. McKay also expressed the province's
fear that the projects' proponents will eventually turn the
projects over to other companies to actually develop and operate
the plants. This scenario is of deep concern since, in McKay's
view, there would be no guarantee that the new parties would be
bound by any commitments made by the original proponents.

5. (SBU) In response to McKay's assertions, CG reiterated the
USG position, stressing that the two projects have yet to pass
through all the regulatory processes on both sides of the
border. He also explained that the U.S. processes are open to
Canadian participation. Further, the CG reminded McKay that
ships have the right to "innocent passage" through waterways
such as Head Harbor Passage.

6. (SBU) McKay acknowledged the CG's points and in reference to
the open regulatory process asked for our help in obtaining an
update on the status of the Coast Guard's Waterway Suitability
and Safety Assessments. McKay also mentioned that he was
intending to meet with the FERC in Washington. The meeting is
scheduled for November 14.

7. (SBU) COMMENT: McKay brought up no new items on the LNG
issue, other than letting us know that, despite the change in
administrations, there would be no change in the province's
objection to the LNG projects. As further background to his
upcoming FERC meeting, McKay is known to our post as a
dedicated, articulate, forthright but always cordial senior
bureaucrat. Highly respected by both his former and new
political masters he occupies one of the most senior positions
within the government. He and his staff will continue to be our
main link with the New Brunswick government on all bilateral
issues. In keeping with this reputation, we envisage McKay
being an ardent champion for his province during the FERC
meeting, but with his usual amiable, respectful manner. END
COMMENT

FOSTER

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