VZCZCXRO3702
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