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Oregon Governor: State Needs to Explore All Options, Even LNG

Oregon Gov. Ted Kulongoski held a one-day Energy Summit last Wednesday for the major stakeholders from the public and private sectors in his state, and in his opening and closing remarks he broadened his outlook to be all-inclusive of various traditional and alternative energy options, including the import of liquefied natural gas (LNG). Kulongoski would not rule out any options and said he will soon create a new state unit to ferret them out.

A leading proponent of an Oregon LNG receipt facility, NorthernStar Natural Gas touted Kulongoski's remarks as a sign he has not closed the door on LNG in the state. The backer of the proposed Bradwood Landing LNG receiving terminal on the Oregon side of the Columbia River said the governor called for keeping LNG as an option.

At the summit, Kulongoski said Oregon citizens need the "cold facts" -- namely what all the options are, and that the governor's "bottom line for energy is, Oregon families and businesses must always have supply certainty and price stability."

NorthernStar CEO William "Si" Garrett said the governor pointed out that Oregon will add 1 million people by 2030, and while renewables will make up 25% of the electric portfolio by 2025, "the state will still have a long-term need for traditional fuels for many years to provide the other 75% of Oregon's energy."

"Demand for energy will go up as more people and businesses tap into the electrical grid," Kulongoski said. "So in order to maintain certainty and price stability -- supply will have to go up, too. Much as we might wish otherwise -- for at least the next decade -- renewable energy will not, by itself, be able to satisfy Oregon's demand for energy."

Similar to the Oregon governor's economic council of advisers, Kulongoski said he will soon create by executive order the Oregon Planning and Energy Council, or "OPEC," with an emphasis on reducing foreign oil dependence. The council will meet regularly and report periodically to both the governor and state legislature.

Kulongoski said he expects the council to address five areas: (a) analyses of the forecasted needs for energy transmission, price stability, renewable energy, alternative energy sources and energy efficiency; (b) develop short- , mid- and long-term energy plans for meeting the state's needs; (c) monitor potential gaps between demand and supply; (d) identify immediate challenges to meeting price stability and energy supply certainty; and (e) advise the governor and state lawmakers on emissions and environmental impacts from the state's energy strategy.

Garrett reiterated the theme that prices are going up and supplies of natural gas are tightening for the Pacific Northwest region, citing the recent example of Northwest Natural Gas filing with state regulators to recover a 25% increase this fall in its wholesale gas costs.

Meanwhile, a private opinion poll and mailing concerning the proposed Bradwood Landing LNG terminal has sparked a local controversy.

A Clatsop County ballot measure set for a Sept. 16 special election asks for voter approval on gas pipelines, sewer lines and cable television lines going through lands reserved for open space and recreation. NorthernStar supposedly quietly supported an opinion poll of voters without disclosing the expenditure, although the Oregon Secretary of State's Office subsequently confirmed that the Bradwood Landing developers did file documents noting that they spent $12,500 on the survey and another $17,000 on a mailing of the results to voters.

Opponents of the LNG terminal accused the company in news media reports of violating state elections law. One environmental group opponent said the action groups had forced NorthernStar to admit it was behind the so-called "push poll" and campaign mailing, but it still violated campaign funding laws and should be held responsible. The anti-LNG groups are sponsoring the ballot measure, and NorthernStar's chief spokesperson said they were "wrong" in accusing the company of violating state law.

"The expenditures Bradwood filed in August were for expenses made within the time frame allowed for reporting," said NorthernStar's Joseph Desmond, senior vice president for external affairs. "Contrary to the claims being made, Bradwood has never engaged in so-called push polling. This is simply an attempt by referendum sponsors to draw attention to their issue by inventing news."

Desmond said he is confident the company will be vindicated by any subsequent review of the situation. He said the expenditures were reported in accordance with Oregon's campaign finance rules.

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