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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION I
JOHN F. KENNEDY FEDERAL BUILDING
BOSTON, MASSACHUSETTS 02203-0001

September 29, 1995

Paul Lariviere
Division Administrator
Federal Highway Administration
Room 614, Edmund S. Muskie Federal Building
Augusta, ME 04330

Lieutenant Colonel Michael Bradbury District Engineer
U. S. Army Corps of Engineers
New England Division
424 Trapelo Road
Waltham, MA 02254

Dear Mr. Lariviere and Colonel Bradbury:

I am pleased to provide the Environmental Protection Agency's comments on the Draft Supplemental Environmental Impact Statement for the Maine Department of Transportation's proposal to construct a marine dry cargo terminal on Sears Island in Penobscot Bay. Our comments are in accordance with our responsibilities under three federal environmental laws -- the National Environmental Policy Act, the Clean Air Act, and the Clean Water Act.

Introduction

The Maine Department of Transportation seeks to build a modern, expandable marine cargo terminal on Sears Island, located at Searsport, Maine in Penobscot Bay. For over a decade, Maine has identified this project as one of great importance to the long term economic vitality of the State. At the same time, there are extremely valuable environmental resources at stake. Because of the severity of the environmental harm it would cause, as discussed below, the project as currently proposed cannot receive a Clean Water Act 404 permit unless it is modified to reduce the impacts through further avoidance and/or development of a mitigation package which would sufficiently compensate for these impacts.

The challenge that lies ahead is to identify practicable ways to further avoid and compensate for the environmental losses so that Maine Department of Transportation can proceed to construct a cargo terminal in mid-coast Maine in an environmentally acceptable manner.

In conducting my evaluation of this project, I have had the opportunity to meet and talk with many concerned and knowledgeable people. I am very grateful to Commissioner John Melrose for his willingness to personally engage in a helpful and instructive

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dialogue with me over the last several months. I am grateful as well to the more than fifty individuals from the environmental and business communities, the Searsport. area, existing land users at Mack Point, ships' captains, federal resource agency staff and others who have taken the time to meet with me during my review. Our comments are better informed and more precise as a consequence.

The State of Maine's goal to realize the benefits of expanded economic growth as a result of this project is one I fully support. Over the last nine months I have worked with Governor King and many others toward helping Maine's economy grow in an environmentally sustainable way, with tangible results: resolving Clean Air Act issues; developing with Maine a balanced wetland permitting program; resolving environmental concerns to allow the expansion of Owls Head Airport and with it economic development and job creation; and a current effort to facilitate a significant expansion of a major manufacturing facility. I am committed to continuing on this course in Maine as together we attempt to site and permit an environmentally sustainable mid-coast cargo facility.

The comments below and in the attachments focus primarily on the the feasibility of Mack Point as an alternative site and the environmental impacts associated with building the port on Sears Island.

Mack Point

Federal regulations prohibit the discharge of dredged and fill material into waters of the United States if there exists a practicable alternative that is less environmentally damaging to the aquatic environment. 40 C.F.R. 230.10(a). A practicable alternative is one that is "available and capable of being done after taking into consideration cost, existing technology, and logistics in light of overall [basic] project purposes." 40 C.F.R. 230.3(q) . MDOT's basic project purpose is to construct a modern, efficient, expandable dry cargo terminal capable of handling the existing and future cargo needs of industries in central and northern Maine.

The threshold question in this case is whether building the port on Mack Point is a less environmentally damaging, practicable alternative to building the port on Sears Island. The environmental aspect of this question is clear. Mack Point would be a less environmentally damaging alternative. I base this finding on the judgment of experts at EPA, the U.S. Fish and Wildlife Service, and the National Marine Fisheries Service, as well as a number of marine resource experts living in the Penobscot Bay area, all of whom conclude that the wetlands and marine resources potentially affected by new port facilities at Mack Point are of far less value than those at Sears Island. Specifically, the wetlands at Mack Point are both highly fragmented and degraded by neighboring industrial uses, and the marine resources are

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dramatically inferior to those at Sears Island in part as a consequence of their proximity to an active port. (see footnote 1)

The more complex question has been whether Mack Point is a practicable alternative. In considering this question, I have taken into account the DSEIS, the administrative record, information gathered by EPA's consultant, Anthony Barrington of Kimball Chase Co., Inc. (whose report is appended to this letter), and opinions I have sought from many individuals whose expertise and firsthand knowledge bear directly on the issue. These include port owners, operators, and users in Searsport and elsewhere in New England, such as Sprague Energy, Merrill Terminal, the Penobscot Bay pilots and tugboat operators, Bangor and Aroostook Railroad, the Department of Defense, and Bangor Investment Corporation, as well as community leaders and residents in the Searsport area.

The information before me indicates that there are substantial barriers at this time to achieving the project purpose at Mack Point and that, considering these existing circumstances, Mack Point is not a practicable alternative for a facility of the size and scale and purpose currently proposed by MDOT. As discussed further below, there are several factors bearing on this question that the State may decide are valid reasons for reevaluating Mack Point.

In evaluating whether or not Mack Point is practicable I have primarily focused on the three principal objections MDOT and others have raised: (footnote 2)

1. the potential for coal dust from existing coal operations at Mack Point to 'contaminate', and therefore prevent the successful marketing of, wood chips, a commodity MDOT plans to export through the new port;

2. navigation problems posed by wind and wave conditions affecting berths oriented in an east-west direction;

3. a lack of adequate space to accommodate an expandable port without disruption to existing operations and growth plans of current operators and users of Mack Point.

Footnotes
(1)The environmental resources that could be affected by a new port at Mack Point and their value relative to the environmental resources potentially affected at Sears Island are further discussed in the Appendix to this letter.

(2) To a lesser extent MDOT has raised the concerns that siting the project at Mack Point could involve higher dredging amounts and construction costs. The attached Kimball Chase report presents an analysis of these concerns and concludes that in both respects Mack Point and Sears Island are comparable.

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of these three objections, I am most concerned about the third. Absent some change in the space needs required by existing users at Mack Point or a scaling back of the project, Mack Point cannot accommodate both existing users and the project as proposed by MDOT. I discuss each of these issues in more detail below:

A. Coal/wood chip contamination

MDOT has stated that dust from the existing Sprague Energy coal handling operation at Mack Point would contaminate wood chip exports, requiring large investments in dust suppression/ avoidance and creating a real or 'perception' problem that would constrain the establishment of a wood chip export market through the proposed terminal.

I am convinced that this problem, if it were to exist at all on Mack Point, is one that can be properly managed without detriment to Maine's plans to ship wood chips and without undue cost to the port operators. I base this on the experience of port operators in Maine and elsewhere in the United States, including the Port of Lake Charles, LA, which has successfully shipped petroleum coke (a product with dust potential comparable to coal) and woodchips for high quality paper production to Japan since 1977; and ports at Morehead City, NC, Savannah, GA, Portland, ME, and Mack Point in Searsport, all of which have a successful record of cohandling both coal (or comparably 'dirty' commodities) and 'clean' cargos. These ports ship to buyers who have high standards for cleanliness, and do so without contamination problems, due to standard operating practices for cleaning equipment and separation of cargoes.

Therefore, this issue is not by itself a barrier to Mack Point's practicability as an alternative site for the proposed project.

B. Navigation

There is conflicting evidence as to whether siting the proposed port facilities at Mack Point poses undue navigation problems. I have had a number of discussions with the Penobscot Bay pilots and tugboat operators, the Searsport harbormaster, and MDOT who have suggested that it would be difficult and at times potentially dangerous to dock a large ship at a berth oriented in an east-west direction, which is one of the concepts that has been proposed for a Mack Point berth. (3)

(Footnote 3)The conceptual layout included in the Kimball Chase report appended to this letter suggests one way, but not the only way, to configure a wharf structure incorporating the two berths deemed necessary by MDOT. In this concept one berth is oriented north-south, the second one east-west. As discussed in the report, the east-west orientation was included because it requires less dredging, hence a lower cost, than two north-south berths.

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Nevertheless, based on analysis of the wind data and MDOT's forecast of the frequency of ship calls in the new port, as well as discussions with our consultant and individuals experienced in navigating Penobscot Bay, I do not believe this concern is, by itself, a legitimate basis for ruling Mack Point out as a practicable alternative. I base this on the following factors.

The concern raised by the pilots, tugboat operators, and MDOT relates not to Mack Point per se, which has been operating without undue navigational problems since the turn of the century, but to only the east-west orientation of one of two berths in one possible conceptual layout. The concern is based on the difficulty of maneuvering ships into an east-west berth when winds are 15 knots or greater, which could require more tugs, be potentially unsafe, and result in delays and increased costs to the port operator.

However, based on a review of historic weather data and MDOT's forecasts of ship calls requiring the use of the second berth, only one ship per year is likely to be delayed in the port's initial years of operation, and in the year 2040, at most three ships a year would be delayed on average. Thus, while the north-south orientation of the proposed berths at Sears Island is preferable from a navigation standpoint, the occurrence of winds at higher than 15 knots during ship calls at the east-west berth would be so infrequent that Mack Point's practicability cannot be ruled out on navigation grounds alone. (Footnote 4)

C. Conflicts with Existing Operators

Of the three principal objections to Mack Point as a practicable alternative, I am most persuaded by the concern about the lack of adequate space to accommodate an efficient and expandable new port facility without disruption to the existing and planned operations of the current owners and operators.

EPA's consultant has presented an analysis indicating that 60 acres, as opposed to MDOT's proposed 90-95 acres, are sufficient for a new port facility that could accommodate all of MDOT's forecasted cargo through the year 2040. When presented with this analysis, MDOT and others have argued that 60 acres is insufficient. However, even if a 60-acre project were adequate to meet the State's needs, such a project could only be accommodated on Mack Point through a combination of substantial offshore construction and fill (30 acres) to create waterfront space, the access to which requires easements across other operators' property and possible disruption of their operations; and the acquisition of land currently owned by other parties who at present have plans for

(4) Further analysis associated with my conclusions relative to the coal/woodchip contamination and navigation issues is contained in the Kimball Chase report, Attachment III.

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using it in the future and who thus far have expressed no interest in making it available for development of the State's port.

Access to a new wharf off the southern shore of Mack Point, as envisioned in the Kimball Chase concept, would have to occur by an easement across land where Sprague now stores salt and other bulk commodities. In addition, one of the storage areas (for wood chips in the Kimball Chase concept) would need to occupy currently undeveloped land (west of the Department of Defense tank farm), which is one of the parcels at Mack Point that Sprague is in the process of acquiring and reserving for expanded operations in the future.

Although the cost of offshore construction at Mack Point would be comparable to that at Sears Island, MDOT has stated that there would be additional high costs associated with compensating land owners for use of their land at Mack Point. Further, MDOT and current Mack Point operators with whom my staff, our consultant and I have had numerous discussions, have presented persuasive arguments that it is not reasonable or practicable to site the project on Mack Point if the result is a project that substantially disrupts and intrudes on existing and planned future operations.

Thus, although fitting a 60-acre port on MP is conceptually feasible, it is not realistic in view of the logistical impact it would have on ongoing operations and the constraints it would impose on expansion/growth plans of current operators. Based on these current constraints, Mack Point, for the purposes of 404, is not a practicable alternative for the project as now proposed.

While recognizing that Mack Point is not a practicable alternative to locating the cargo port on Sears Island as currently proposed, the Section 404 permit review process would allow for reconsideration of Mack Point if MDOT requested such reconsideration in the face of changing circumstances. In particular, MDOT may seek reconsideration of locating the cargo port on Mack Point if any or all of the following circumstances were to occur. First, more land than initially envisioned may be available as a result of the Department of Defense's recent plans to downsize its operation on Mack Point. Second, as discussed elsewhere in this letter, if the environmental impacts of building the port on Sears Island cannot be reduced so as to allow for a permit, the State could elect to reevaluate Mack Point. Third, if the project is downsized as a result of reduced public financing, as was recommended by legislators and others at the recent public hearing, the State may find that Mack Point warrants reexamination.

Environmental Impacts

In evaluating the adverse impacts of this project, I have carefully reviewed the record before me including extensive analysis conducted by EPA marine and wetland biologists, the professional

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staff of both the U. S. Fish and Wildlife Service and the National Marine Fisheries Service, and numerous informed commenters who have reviewed the DSEIS. Based on that review, I conclude that the impacts on eelgrass, intertidal and subtidal habitat, clamflats, forested wetlands, vernal pools, and streams associated with the Sears Island cargo facility, as currently proposed, are environmentally objectionable, and would cause significant degradation to the aquatic environment.

This judgment is unequivocally endorsed by both the U. S. Fish and Wildlife Service and the National Marine Fisheries Service.

A. Sears Island Alternatives

The substantial impacts to both marine and freshwater habitats associated with the twelve Sears Island alternatives portrayed in the DSEIS would cause significant degradation to waters of the United States in violation of Section 230.10(c) of the 404(b)(1) guidelines and may result in substantial and unacceptable adverse impacts to aquatic resources of national importance. The most environmentally damaging impacts associated with the twelve alternatives identified for analysis by MDOT are:

* Permanent loss of a minimum of 13 acres of highly productive eelgrass beds, and the reduced productivity of up to an additional 80 to 250 acres of eelgrass. Eelgrass loss of this magnitude is unprecedented in New England. To our knowledge, no projects have ever been permitted that have approached this amount of destruction and degradation to submerged aquatic vegetation.

* Permanent destruction of roughly 16 acres of intertidal habitat. These areas provide habitat for commercially and recreationally important species, including soft-shell clams, mussels, Atlantic salmon, menhaden, winter flounder, and other finfish species. The environmental values of this marine habitat has been recognized by the National Marine Fisheries Service and the U.S. Fish and Wildlife Service. Moreover, the State of Maine has classified this area as habitat of regional significance to coastal wildlife, and MDOT's own consultant has documented the extremely high productivity of these marine habitats.

* Fill or pilings placed in a minimum of 12 acres of subtidal habitat. These subtidal areas provide habitat for lobsters, crabs, sea urchins, numerous finfish species, and grey and harbor seals. An additional 34 to 46 acres of subtidal area would be dredged, resulting in a loss of foraging habitat and food resources for lobsters, crabs, sea urchins, grey and harbor seals, menhaden, Atlantic silversides, and other migratory finfish.

* Outright destruction and total loss of functions of at least 17 acres of freshwater wetlands, up to four vernal pools and almost two-thirds of a mile of stream. Extensive indirect effects would render many of the adjacent wetlands on Sears Island less

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suitable or uninhabitable by wildlife. These direct and indirect effects would irreparably alter the integrity of this high quality, undisturbed ecosystem. If permitted as proposed, the impacts to freshwater wetlands and waters would be one of the most damaging to wildlife habitat in Maine in the past decade.

In addition, the proximity of extremely valuable freshwater wetlands, vernal pools, mudflats, saltmarshes, eelgrass beds, and intertidal areas found on Sears Island is unusual. The juxtaposition of these valuable habitats results in a high biodiversity of wildlife species utilizing the island: more than three quarters of all wetland 'dependent mammal species and wetland dependent bird species occurring in this region of Maine have been verified on Sears Island. Construction of the project as proposed would result in substantial loss of ecological diversity, productivity, and stability for these species, and would adversely affect habitat for numerous species considered imperiled by the State, including the bald eagle and the peregrine falcon.

EPA believes that the marine impacts are by themselves significant. The Sears Island marine habitats are exceptionally diverse, productive, and valuable to the fisheries resources of both Penobscot Bay and Penobscot River. As noted above, EPA is unaware of any other projects in New England with marine impacts as severe as the Sears Island proposal. The freshwater impacts, while not unprecedented, are unusually severe. No project in our experience would cause the combined harm to valuable marine and freshwater resources that would result from the Sears Island project as currently proposed.

Given this, the project should not be permitted on Sears Island unless it is modified to reduce these impacts through further avoidance and/or development of a practicable mitigation package which would sufficiently compensate for these impacts.

B. Mitigation

A discharge that would result in significant degradation may be permittable if mitigation can offset the impacts such that the proposed project complies with the guidelines. In this case, given the magnitude of the proposed impacts, the applicant has a high mitigation responsibility.

The DSEIS did not present a specific mitigation plan to offset the proposed impacts. Nevertheless MDOT and their consultants surveyed a broad spectrum of knowledgeable sources to develop a menu of mitigation options. This represents a reasonable first step.

I believe it is incumbent on EPA, USFWS, NMFS, the environmental advocacy community, the marine research community, and others knowledgeable and concerned about Penobscot Bay to work closely with MDOT to build on the State's work to date in order to help

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develop and define a mitigation package which would be most likely to reduce the impacts of a facility on Sears Island below the level of significance.

Opportunities exist for further land and marine resource protection and habitat restoration in Penobscot Bay. We need to work together in an attempt to identify and explore those opportunities. I encourage the State to join with EPA and the Corps in seeking the advice of appropriate state and federal agencies; the environmental community, including the Island Institute, the Penobscot Bay Network, the Maine Coast Heritage Trust, and the Conservation Law Foundation; as well as the marine research community including the expertise of Jackson Estuarine Research Center and the Darling Marine Center in this effort.

Adequately offsetting the impacts of the project as proposed will be a difficult task. It may not be achievable. But it is an effort worth undertaking. In fact, only if informed and reasonable people approach this issue fairly and with open minds do we have any chance of establishing common ground and achieving the equally valuable goals of sustainable economic growth and full protection of important environmental resources.

Conclusion.

The history of the cargo terminal proposal for Sears Island has been a long, contentious, and often frustrating one for all concerned. Nevertheless, I remain optimistic that if the State, the regulators, and the environmental and business communities are prepared to address the remaining issues in good faith and with open minds, there is a very real opportunity to achieve consensus on an environmentally sustainable project, and to do so in a timely fashion.

I pledge the full participation and complete cooperation by EPA in seeking this outcome.

Sincerely

John P. DeVillars
Regional Administrator

cc: Governor Angus King, Commissioner John Melrose, Commissioner Sullivan, Ronald Lambertson, USFWS, Andrew Rosenberg, NMFS, Senator Cohen, Senator Snowe, Representative Baldacci, Representative Longley.

End of Letter

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