Passing Gas through Passamaquoddy Bay

Climate change notwithstanding, transboundary environmental relations between the United States and Canada seem increasingly frosty of late. As I wrote a few months back, Canada and the United States have tangled over construction and operation of an outlet from Devils Lake, North Dakota, and the project’s implications for U.S. obligations not to pollute Canadian waters under the 1909 Boundary Waters Treaty. At the same time, Canada complained vociferously about EPA’s potential application of its Superfund statute, CERCLA, to pollution emanating from the same Trail Smelter that spawned the whole field of international environmental law in the first place. And let’s not forget long-standing disputes that continue to fester, such as which of the two neighbors has sovereignty over Machias Seal Island?

In the midst of such troubled relations, yet another dispute has emerged, and it’s a doozy. Two different liquefied natural gas (LNG) companies are seeking approval from the U.S. Federal Energy Regulatory Commission to build storage terminals along Maine’s coastline abutting Passamaquoddy Bay. One proposal would have the LNG facility lie within the Passamaquoddy tribe’s Pleasant Point reservation (The Quoddy LNG project) while another would have it in Robbinston, Maine (the Downeast LNG project). There’s already some tension between the two competing projects that may effect how the issue plays out down the line, but for now FERC is proceeding with its 18 month approval process on both applications. The Quoddy LNG projects appears our in front, having signed a contract a few weeks ago to buy a 300 acre parcel from the Passamaquoddy tribe for the terminal site.

The real controversy though lies outside the U.S. regulatory process in questions over how the LNG will reach any newly built terminals. To get to the Maine shoreline in Passamaquoddy Bay, tankers would need to traverse Head Harbor Passage and that passage by all accounts falls within Canadian waters. Canada along with several grass roots organizations do not want giant LNG tankers transiting these waters, which are narrow and difficult to navigate, raising the spectre of significant environmental and property damage should an accident (or even a terrorist attack) occur. Canada’s objections may also have an economic component since new LNG terminals would obviously compete with its own supply of LNG to the United States through the very same pipelines into which the Downeast and Quoddy projects would tap. Given such concerns, in February 2007, Canada’s Ambassador informed the United States that Canada was prepared to take domestic legal action to ensure LNG tankers did not transit its waterways even if only en route to LNG terminals in Maine (New Brunswick’s position on these projects is a bit more complicated, although on the whole it appears to oppose them as well).

In March 2007, the United States rejected Canada’s decision as inconsistent with Canada’s obligation to guarantee “innocent passage” under the law of the sea (see arts. 17-25 and 45 of the 1982 United Nations Convention on the Law of the Sea (UNCLOS)). The United States is not a party to UNCLOS, so presumably it is relying on UNCLOS rules as customary international law (unlike the customary international humanitarian law context, however, we’ve no evidence of how the United States determined the exact contours of the innocent passage customary rule). Moreover, the rule of innocent passage applies to ships transiting a state’s territorial seas, not its internal waters. At least some folks are questioning whether Passamaquoddy Bay qualifies as an internal water rather than part of Canada’s territorial sea (a distinction that harkens back to one of my favorite cases, Mortensen v. Peters, where fishing rights in Scotland’s Moray Firth turned on its status as internal waters or intra fauces terrae). If it’s internal waters, then Canada could presumably dictate tanker access free from the constraints of the innocent passage rule. I don’t have a good enough handle on the baseline rules, etc. to decide who’s got the better claim here, although I would note that there’s actually a 1910 treaty on the Passamaquoddy boundary line, and I wonder if that has any impact on the issue (among other things the treaty grants certain dredging rights along the boundary upon two months notice).

Of course, what if it’s not internal waters, but part of Canada’s territorial sea–a conclusion apparently reached by one of Canada’s leading law of the sea experts Ted McDorman? Can Canada still restrict access under the premise that it’s not “innocent” passage where, per UNCLOS Art. 19, it is “prejudicial” to “the peace, good order or security of” Canada? And what burden, if any, do UNCLOS’s provisions obligating states to protect the marine environment impose on the United States, not to mention any obligations that might flow from more general international environmental law principles/approaches like the duty to consult or precaution?

As if these international environmental issues weren’t enough to generate significant legal discourse, there’s the added question of trade. The Quoddy LNG project owners, for example, have suggested that if Canada denies access to LNG tankers, the United States should restrict access by Canada’s own LNG industry to U.S. markets. Would such actions be permissible under international law as a counter-measure, and how would each states’ obligations under NAFTA or the WTO come into play?

Finally, one needs to consider the U.S. Executive Branch’s continued push for Senate advice and consent to ratification of UNCLOS. Apparently, there’s a real possibility that the Senate could give its advice and consent to UNCLOS in the near future and that may have implications for the Passamaquoddy dispute. Canada is already a party to UNCLOS, and, with U.S. consent, either state would be able to unilaterally move the issue to international dispute settlement under Part XV of the treaty. I wonder if the prospect of binding dispute settlement would affect either or both parties’ negotiating positions (indeed, I wonder whether the prospect of a Passamaquoddy Bay arbitration could actually have an impact on prospects for U.S. ratification of UNCLOS)?

Given such a host of issues, it is not surprising that scholars are taking an increasing interest in the issues raised. This Friday, Neil Craik and Don Fleming at the University of New Brunswick (UNB) have organized a conference that is sponsored by UNB and the Canadian Council for International Law – “(Not So) Innocent Passage: International Law and the Passamaquoddy Bay LNG Terminal Controversy.” According to the conference description:

This panel discussion will bring together experts and government officials to consider the international rules governing the shipment of liquefied natural gas (LNG), and the location of an LNG terminal, in and adjacent to the Passamaquoddy Bay. The issues the panel anticipates canvassing include 1) the status under international law of the waters of the proposed shipping route through Head Harbour Passage and the Passamaquoddy Bay; 2) the right of innocent passage of foreign ships; 3) the extent to which environmental risks may affect the right of innocent passage; and 4) the constraints that the rules of international environmental law place on a state proposing to locate a potential hazardous activity in close proximity to another state.

Of course, what happens in Passamaquoddy Bay is important not only to U.S.-Canada transboundary environmental relations, but also the inter-relationship between the law of the sea, international environmental law and trade. So, for those readers who can’t make it to New Brunswich on Friday, I’d invite views on this issue that might promote further analysis and discourse on ways forward.