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Public to Weigh in on Controversial Searsport Propane Tank Proposal
11/30/2012   Reported By: Jay Field

In Searsport tonight, members of the public will get their chance to testify before the town planning board on the proposed liquid propane tank and terminal at Mack Point. When a Colorado-based energy company decided back in 2009 to pursue the project, it says it was responding to projected, future demand for propane as a cheaper alternative to home heating oil. But a lot has changed in three years. Shale gas drilling in the Marcellus and Utica fields in the Northeast has flooded New England with a cheap domestic supply of propane. Critics of the Searsport project say changing market dynamics make the Searsport tank unncessary. But the company - DCP Midstream - and some industry players disagree. Jay Field reports.

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Public to Weigh in on Controversial Searsport Prop Listen

This week's intense exchanges before the Searsport Planning Board have their roots back in 2007. That year, severe winter storms prevented ocean shipments of imported propane from making it to C3 Energy's terminal in Newington, New Hampshire. A pipeline broke down in New York State. Workers at Canadian National Railway, a major transporter of propane, went on strike.

This collision of forces caused a serious propane shortage, just as bitterly cold temperatures caused demand to skyrocket. "People were in dire need - it did get down to people having one day left of fuel, elderly people out in the rural areas," says Roz Elliott, spokesperson for DCP Midstream.

Elliott says the crisis led to conversations between the company and the state about how to avoid this sort of perfect storm in the future. "We had to bring in trucks from all over the country to help out, which takes a long time to get there," she says. "So transportation is one of the larger costs. So how do we have propane locally, a supply locally? And you can always use more propane storage."

If DCP has its way, Maine may soon have a lot more. The project now before the Searsport Planning Board calls for the construction of a 22-million gallon, $40 million LPG tank and terminal at the Mack Point Industrial Complex.

Tank opponents cite many different arguments for why it's the wrong project, in the wrong place, at the wrong time. The ungainly sight of a 14-story tank, they say, towering over Penobscot Bay, will depress nearby property values, harm tourism and otherwise permanently alter the sense of place on the midcoast. An increase in truck traffic will damage local roads and make Route 1 more dangerous. And storing so much propane in one place, opponents argue, poses the risk of accidents like fuels spills and explosions.

But Steve Hinchman, an attorney representing the opposition group Thanks But No Tank, says an equally powerful case against the project can be made on the basis of changing market dynamics. "The business case for this terminal, as an import facility, evaporated about two years ago," he says.

Over the past two years, says Hinchman, two things have happened: A glut of propane has flooded the market in the Northeast, thanks to the rapid growth of drilling in the Marcellus and Utica shale gas fields in the Applachian basin. And companies are building smaller-scale, more distributed propane storage in Maine.

CHS Incorporated, an agribusiness co-op in the Midwest, has just opened a rail terminal in Biddeford, for example, that can store 180-million gallons, and transport 20-million gallons annually. And Hinchman says DCP Midstream faces other competitive pressures, such as the increasing availability of natural gas.

"And we're bringing LNG lines into more and more southern Maine communities," Hinchman says. "We're bringing it up the Kennebec Valley to serve Augusta. They're going to rebuild the Loring Pipeline and supply LNG in northern Maine."

And that, says Hinchman, makes a massive new seaside tank for imported propane uncecessary. But industry officials say the domestic energy market is a far less predictable animal. Joe Rose heads the Propane Gas Association of New England.

"Nobody is going to be able to predict where we're going to be three or five years from now," Rose says. "What we do know is that we have a transportation and storage issue in New England. And so the more storage we can build, and the more transportation systems we can create, the better off we're going to be."

DCP Midstream says it believes the propane market is a dynamic one, that, as Rose argues, is unpredictable and could change. Critics of a tank in Searsport worry that the company could be seeking approval so that in can turn around at a later date and convert the facility into an export teriminal to ship propane abroad.

But the company insists its focus is on serving Maine, and Maine alone.


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