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For Immediate Release
April 13, 2009

Contact:
Marnie Grumbach, Communications Coordinator, Preti Flaherty
(207) 791-3000
E-mail: abuxton@preti.com

Anthony W. Buxton, Preti Flaherty
(207) 623-5300

Web Site: http://www.preti.com

Canadian Natural Gas Interruption Threatens Grid, Maine Businesses

Energy group calls for more careful reliance on Canadian energy

PORTLAND, Maine – The Industrial Energy Consumer Group (IECG), an association of Maine energy consuming businesses, said the series of interruptions recently in the supply of Canadian natural gas to Maine vividly demonstrates Maine’s risk of over-reliance on Canadian energy supplies, according to the organization’s attorney, Tony Buxton, a prominent energy attorney in the state.

“Maine is fortunate that these unplanned disruptions in gas supply from Canada’s Sable Island gas field have occurred when the weather is relatively mild. If this were December or January our electric grid might well have gone black because several of Maine natural gas powerplants would have been completely without gas,” said Buxton, a partner with Preti Flaherty in Portland.

The most recent supply disruptions apparently were caused by an electrical fire in the equipment at the Nova Scotia’s Sable Island gas field in the Atlantic Ocean. Gas supply was disrupted first on Tuesday and continued through Thursday. No replacement gas was available from the Irving LNG facility in St John, New Brunswick

“These disruptions follow similar Canadian gas supply disruptions in 2007, 2008 and early 2009,” said Buxton. “This supply uncertainty from Canada has a major economic effect on Maine’s electric grid and businesses – and could potentially lead to some businesses shutting down. These interruptions also threaten electric grid reliability, said Buxton. In one supply interruption in 2008, the grid serving Maine from Bangor north, defaulted to rely on the New Brunswick grid. It also has an impact on Maine residents as it leads to higher energy costs all around – at a time when Maine is struggling through the recession. Because when replacement gas is available on the market to replace the gas Maine powerplants have contracted for, the price is increased.”

Buxton said the IECG believes these events should be carefully considered as the Legislature evaluates proposals to award preferential energy corridors to Canada that would make the state even more reliant on Canadian energy supplies and diminish the development of more reliable Maine-based supplies.

According to press reports, ExxonMobil has “shut in” – meaning reduced or ceased – production of natural gas at the Sable Offshore Energy Project off Nova Scotia, Canada, due to two separate incidents at the Thebaud compression platform in recent days. Those reports state that ExxonMobil would not speculate when production would begin again. The Sable Island field typically supplies 400 million cubic feet of gas per day. The gas is transported through Maine on the Maritimes and Northeast pipeline.

"Maine has been paying too much for too long for a natural gas supply that is too uncertain,” said Buxton, "With the longest, least-densely populated coastline in the continental United States, it is essential that Maine move quickly to secure LNG capacity. Only natural gas storage in significant volumes in Maine can protect us against pipeline supply uncertainties,” he added.

Buxton serves as General Counsel to the IECG, which represents the region’s largest consumers of electricity, and the Cut the Cost Coalition, a recently created New England-based electricity consumer group. With Preti Flaherty since 1980, Buxton also represents commercial and industrial energy users and producers in state and regional electric and natural gas energy matters before Public Utilities Commissions, ISO-New England and the Federal Energy Regulatory Commission.

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