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Oregon Balks at FERC on LNG; NorthernStar OK

Oregon Gov. Ted Kulongoski has lawyers looking at the state's rights to withhold permits for FERC-approved liquefied natural gas (LNG) projects with which the state disagrees.

In the meantime, officials with one of three proposed LNG projects, NorthernStar Natural Gas's Bradwood Landing site along the Columbia River, told NGI that they are continuing to work with the state to alleviate concerns now that the project has obtained local land-use approvals from the Clatsop County Commission.

NorthernStar emphasized that it initially applied to Oregon's Energy Facility Siting Council for permitting and approval. NorthernStar said it considers the state process "inclusive," and the council has for the most part "worked well for state siting of energy infrastructure projects." After the Energy Policy Act of 2005 (EPAct), however, Oregon's attorney general directed the company to apply directly to the Federal Energy Regulatory Commission (FERC).

Nevertheless, the backers of the Bradwood Landing project contend that they have followed through with completing local and state processes, as well as the federal permitting. "To ensure that local concerns would be addressed, we also signed a contract with the county committing that we would not appeal the county's conditions of approval to FERC," said Joe Desmond, NorthernStar senior vice president for external affairs.

Neither Oregon's U.S. Sen. Ron Wyden, helping lead the charge in Congress, nor Kulongoski has come out against an LNG terminal, but they want the state to have a major say in whether one is built, and if it is built, what safety and environmental mitigation measures are imposed. Kulongoski has spent the last two weeks traveling around his state and in a foreign trade mission to Europe and Israel pushing hard for more renewable energy development and his vision of making Oregon as carbon neutral as possible.

Early in April, Kulongoski was in Israel talking to global solar energy companies, such as ORMAT Technologies and Solel Solar Systems, about developing manufacturing facilities in Oregon, and days before that he was in Brussels, Belgium talking to European Union (EU) representatives about the EU cap-and-trade system for carbon emissions. Like California, Oregon has a goal of reducing greenhouse gas (GHG) emissions to 1990 levels by 2020.

In the meantime FERC Chairman Joseph Kelliher responded to the governor and other Oregon officials in identical letters dated April 2, rejecting the Oregon elected officials' call for "a regional review of how best to meet natural gas needs in Oregon and neighboring states." Kelliher said FERC must focus on making sure safety and environmental standards are met on a site-specific basis while "leaving it to the market to determine which projects are [eventually] constructed."

"EPAct directs the Commission to establish a schedule for regulatory review by the Commission and relevant federal and state agencies that ensures 'expeditious completion' of proceedings," Kelliher said in his three-page letter responding to Kulongoski and Oregon's Congressional delegation that had written FERC. "Regional planning exercises that delay [FERC] review of proposed projects would be inconsistent with that requirement."

Wyden criticized the FERC process in comments quoted Monday by the Portland Oregonian newspaper, and Kulongoski was reported to have asked state Attorney General Hardy Meyers to "research the state's legal authority to withhold necessary permits under state clean air, clean water and coastal zone management acts if FERC does not address his concerns."

The senator argued that the FERC process doesn't actually address the state's environmental concerns and the array of five different LNG proposals in the state promises "far more gas than we could ever use, yet the federal agency won't even address the threshold questions," the Oregonian report quoted Wyden as saying.

Wyden and three other senators whose states have been proposed as sites for controversial LNG projects last week introduced legislation to repeal a provision in the EPAct that gave FERC exclusive authority to site onshore LNG terminals (see related story).

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