Oregon objects to federal OK of Coos Bay gas terminal
Jordan Cove, being developed by Fort Chicago Energy Partners LP and Energy Projects Development LLC, is designed to import up to 1 billion cubic feet of gas per day. Some of that gas would serve customers in the Northwest, though much of it is expected to flow to Northern California and Nevada.
The multibillion-dollar horse race to bring more natural gas to the Northwest and California tightened Thursday as the Federal Energy Regulatory Commission voted 3-1 to approve a controversial terminal in Coos Bay and its associated pipeline to import liquefied natural gas.
Oregon officials quickly said they would petition FERC to rehear the decision.
Over the objections of the state, FERC has already approved a similar terminal at Bradwood Landing, 25 miles east of Astoria on the Columbia River. Backers of Oregon LNG, a third LNG proposal in Warrenton at the mouth of the Columbia, also have applied for FERC approval.
El Paso Corp., meanwhile, is seeking federal approval to build the 675-mile, 42-inch Ruby pipeline to haul vast new quantities of gas from the Rockies to the border of Oregon and California.
Many observers think the first project to reach the regulatory finish line will pre-empt the others, soaking up the available demand for 1 billion cubic feet per day of natural gas and leading competitors to abandon their projects.
Before any of the projects can begin construction, their backers need to navigate a thicket of additional state and federal regulatory processes and obtain permits covering clean air, clean water, coastal zone management and endangered species protections.
None of those approvals is guaranteed or expected to come quickly.
The LNG proposals in particular are highly controversial around Oregon. LNG is natural gas that is super-chilled and compressed into a liquid for shipping, then reheated into gas and distributed over local pipelines. Some of the major sources of LNG are Qatar, Australia, Russia and Nigeria.
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Project backers, chiefly out-of-state companies backed by institutional investors, are pitching the LNG terminals on the basis of diversifying Oregon's gas supplies and saving gas shipping costs from Canada and the U.S. Rockies. They also tout the economic development they would bring in construction jobs, terminal operation and increased property taxes.
The posture of federal energy regulators has been to approve the projects and let the market determine whether they ultimately get built -- an approach that is wholeheartedly endorsed by proponents.
Tom Ivancie, executive director of Energy Action Northwest, a business/labor coalition formed to support energy projects, called FERC's decision "a major step forward in ... bringing much needed, affordable energy and additional jobs to our region."
Opponents, meanwhile, are nearly apoplectic with what they deem a dysfunctional regulatory process at FERC. They foresee major environmental impacts from constructing terminals in sensitive marine areas and laying pipe across hundreds of miles of forest and farmland -- impacts they say FERC hasn't adequately addressed.
By issuing a certificate of public convenience and necessity for the projects, FERC is effectively granting federal approval to condemn private property, landowners say.
Moreover, opponents insist that FERC has glossed over the question of need and has done no comparative analysis on the projects' impacts. Oregon, they contend, is already adequately served by domestic and Canadian gas sources, particularly as new drilling techniques allow producers to access major deposits of previously inaccessible gas trapped in shale formations.
"We feel like we have a very strong legal argument against this project if FERC refuses to rehear their decision," said Lesley Adams, Rogue Riverkeeper at the Klamath Siskiyou Wild Lands Center.
State officials have weighed in with the opponents so far, saying that FERC's licensing process makes a mockery of its legal obligations to determine need and address environmental impacts.
"We don't think they're meeting their requirements when they issue a license, then say go figure out what the environmental impacts are and deal with them," said Mike Carrier, natural resource policy adviser for Gov. Ted Kulongoski.
Kulongoski has been careful to say he's not "unalterably opposed" to any of the energy projects. Yet the back and forth between FERC and state officials is becoming a familiar ritual.
The state filed suit to overturn FERC's earlier approval of Bradwood Landing, contending that federal regulators jumped the gun by issuing their approval before the state made any determination on clean air, clean water and coastal zone management permits. FERC denied that request and Oregon has appealed the decision to the 9th Circuit Court.
State officials raised similar objections during the commission's Jordan Cove deliberations and said Thursday they would petition FERC to rehear its approval.
"This has all become real pro forma," Carrier said. "We don't have any indication that FERC is going to honor our petition or change their decision, but we're obligated to do this to preserve our appeal rights to the courts if we decide to go that route."
FERC addressed the state's objections by saying that since state agencies retain full authority to grant or deny permits, and because construction can't begin until they are granted, the state faces no harm from the federal approval.
Jordan Cove is being developed by Fort Chicago Energy Partners LP and Energy Projects Development LLC. It is designed to import up to 1 billion cubic feet of gas per day. Some of that gas would serve customers in the Northwest, but much of it is expected to flow to Northern California and Nevada.
The 234-mile-long Pacific Connector pipeline would pump gas from the terminal to an interstate gas pipeline near the border of California, near Malin. The pipeline is a joint venture between Williams Co. and the California utility giant Pacific Gas & Electric.
FERC Chairman Jon Wellinghoff, who earlier opposed the Bradwood Landing LNG terminal, also was the lone dissenter in Thursday's vote. He said there are reasonable alternatives that would serve Jordan Cove's targeted markets "more efficiently, more reliably, and in an environmentally preferable manner."
-- Ted Sickinger