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Senator Urges FERC to Put Brakes on LNG Project Approval

Sen. Ron Wyden (D-OR), a vocal critic of FERC's handling of liquefied natural gas (LNG) projects, last Monday called on the agency to refrain from taking any action on Bradwood Landing LLC's proposed LNG terminal in the Pacific Northwest and associated pipeline facilities until critical environmental and economic issues have had an opportunity to be vetted in a public meeting.

"Since [the Federal Energy Regulatory Commission] FERC issued the final environmental impact statement [FEIS] on the Bradwood Landing LNG project on June 6, multiple state, federal and tribal agencies have raised significant concerns both about the environmental impacts and economic suitability [of the project] in Oregon. FERC has not only failed to address those concerns, but appears to be rushing forward to approve the project," Wyden said in a letter to FERC Chairman Joseph Kelliher (see NGI, June 9).

FERC had placed the LNG project on the agenda at its July 17 meeting but later struck the item. Wyden now believes the agency will act on NorthernStar Natural Gas Co.'s Bradwood Landing project notationally (behind closed doors) prior to its next meeting in September. "I am concerned that the Commission thought it was ripe for approval, withdrew it from the agenda without explanation, and is apparently considering final approval without any notice and without a public meeting," he said.

Wyden urged FERC to "withhold action on this project until the outstanding environmental and economic issues are fully addressed in public meeting."

Oregon Gov. Ted Kulongoski, the Interior Department, Environmental Protection Agency, National Oceanic and Atmospheric Administration and the Columbia River Inter-Tribal Fish Commission, as well as other state and local government agencies, "have formally expressed their views with the Commission that the [FEIS] for the project is fundamentally deficient."

A Portland, OR-based spokesman for NorthernStar said last Thursday his company filed responses at FERC earlier this month to counter what it considers to be wrong information submitted by intervenors that want the application deemed inadequate or needing additional conditions. Further, he contended that Wyden's letter to FERC "continued to repeat the incorrect charge that what Asia Pacific countries are paying today for LNG is relevant to the landed cost of LNG at a U.S. West Coast terminal.

"LNG will be imported at or below the U.S. market price," the NorthernStar spokesman said. "Gas is currently trading in the U.S. Lower 48 states for about $12/MMBtu. Imported LNG at a price higher than that wouldn't be purchased."

While both the Oregon Public Utilities Commission and the state Department of Energy "agree that Oregon and the Northwest will likely need additional supplies of natural gas, it is not sufficient to conclude, as FERC has done, that Bradwood will meet this need simply because it is designed to do so," Wyden said. "As pointed out in [the] Oregon Department of Energy's analysis, it is in fact doubtful that LNG imports can provide Oregon with a dependable, economically competitive supply of natural gas because of the continued reliance on foreign markets."

Wyden has been a fierce opponent of how FERC deals with LNG projects. In April, Wyden along with three other senators whose states have been proposed as sites for controversial LNG projects, introduced legislation to repeal a provision in the Energy Policy Act of 2005 that gives FERC exclusive authority to site onshore LNG terminals.

"Right now in Oregon we have three separate LNG proposals pending before FERC. Together they would have a combined capacity of 3.3 Bcf/d. Oregon and Washington together only use 1.33 Bcf/d. Yet FERC categorically refuses to address the basic question of whether the three proposed facilities are even needed to serve our market," he said at the time.

The Bradwood Landing terminal, if approved, would be located on a 40-acre site at the former townsite of Bradwood in Clatsop County, OR, which is about 38 miles up the Columbia River -- the main economic artery for the Pacific Northwest. The project, which would provide up to 1.3 Bcf/d of natural gas to the region, has become a politically charged issue in Oregon and Washington, with state legislators and landowners opposing it (see NGI, June 25, 2007).

The project calls for the construction of a single ship berth capable of receiving and unloading LNG tankers with capacities ranging from 100,000 to 200,000 cubic meters; two 160,000 cubic meter storage tanks; a 36.3-mile, high-pressure pipeline in Clatsop and Columbia counties, OR, and Cowlitz County, WA; and associated pipeline support facilities.

The sendout pipe would extend from the proposed terminal to an interconnect with Williams' Northwest Pipeline system north of Kelso, WA. Between the terminal project and the terminus of the Northwest system, the sendout pipeline would tie in with Northwest Natural Gas Co.'s pipeline system, Georgia Pacific's Wauna paper mill and Portland General Electric's Beaver Power Plant.

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