FERC on Thursday approved a second proposed liquefied natural gas (LNG) receiving terminal in Oregon, the Jordan Cove LNG project and related Pacific Connector pipeline, and reaffirmed its decision favoring Sparrows Point LNG in Baltimore, MD. Chairman Jon Wellinghoff dissented from the 3-1 majority on both orders, saying he had environmental and economic issues with favoring imports over domestic natural gas.
The Jordan Cove project, a limited partnership of an affiliate of Alberta-based Fort Chicago Energy Partners LP and Energy Projects Development LLC, would provide up to 1 Bcf/d of regasified LNG to customers in the Pacific Northwest and California. Plans call for it to be constructed at the international port of Coos Bay on the Pacific Coast.
Almost immediately following the Federal Energy Regulatory Commission's (FERC) action, Oregon Gov. Ted Kulongoski office and the state attorney general said the state will appeal to the federal regulators, and if reject, they intend to go to the federal appeals court.
Thursday's decision by FERC "does not address Oregon's very real concerns about the environmental impact of the pipeline associated with the proposed LNG facility," Kulongoski said. "The information guiding this decision is woefully inadequate to license a project with such profound potential impacts on the lives of Oregonians and we will appeal to FERC to ensure the people of Oregon's concerns are fully addressed."
Jordan Cove Project Manager Bob Braddock told NGI in an interview Friday that he expects the project to meet all of FERC's 128 conditions and secure all of the Oregon permits, making the proposed appellate filings by the state academic. To settle the remaining issues with FERC and the various state permitting agencies should be completed by the summer next year, Braddock said.
Braddock noted that the concerns expressed by the governor seem to be focused on the pipeline part of the project as opposed to the terminal, and there may be a certain amount of political posturing being done because the state for some time has opposed FERC making determinations on projects that have not yet obtained all of their state permits.
"In the state's view, FERC should have waited until all the other permitting agencies had issued their permits before issuing a certificate for the project," Braddock said. "It's as much of a philosophical approach as to who should about who should be entitled to issue permits first."
The terminal would be linked with the Pacific Connector, a 234-mile, 36-inch diameter 1 Bcf/d pipeline. The line would make connections with a number of pipelines near Malin, OR, including Williams' Northwest Pipeline near Myrtle Creek, Avista Corp.'s distribution system near Shady Cove, Pacific Gas and Electric Co.'s transmission system, Tuscarora Gas Transmission's system and Gas Transmission Northwest's system.
Pacific Connector said previously it had entered into agreements with seven customers for the full capacity of the pipeline. The proposed pipeline is a limited partnership of Williams Pacific Connector Gas Pipeline LLC, PG&E Strategic Capital Inc. and an affiliate of Fort Chicago Energy Partners, Fort Chicago LNG II US LP.
In his dissent Wellinghoff said the Commission majority view did not take into account the recent development of abundant shale gas supplies which some authorities say equals 100 years of supply at current consumption levels. He took issue with claims the LNG would be cheaper than domestic gas delivered to the West Coast, noting that the prices and relationships vary.
Wellinghoff also noted the numerous preliminary permits along the coast for the development of hydrokinetic energy. While there are no plants operating the chairman pointed to estimates that the Oregon coast could provide 500 MW of electricity. He objected to Jordan Cove's location less than a mile from the expanding Southwest Oregon Regional Airport, which posed a hazard because of the chance an airplane could crash into the LNG terminal. He endorsed the call by the Federal Aviation Administration for further studies of potential adverse effects on operations in navigable airspace.
Wellinghoff also had voted against another LNG terminal, NorthernStar Natural Gas Inc.'s proposed Bradwood Landing LNG facility on the Columbia River in Clatsop County, OR, which was approved by FERC more than a year ago (see NGI, Sept. 22, 2008). That project has been mired in a land use dispute with local officials (see NGI, Sept. 28).
A third LNG proposal would locate a terminal near Astoria, OR, at the mouth of the Columbia River. The Vancouver, WA-based Oregon LNG has received a number of local approvals but still must get FERC authorization.
Separately Thursday, FERC reaffirmed its Jan. 15 order authorizing the AES Sparrows Point LNG LLC import terminal near Dundalk in Baltimore County, MD, and the related Mid-Atlantic LLC pipeline project.
The AES terminal would send out gas at a rate of up to 1.5 Bcf/d, which would be transported through the 88-mile Mid-Atlantic pipeline to Eagle, PA, where the new pipeline would interconnect with several existing interstate pipelines serving customers in the Mid-Atlantic and Northeast. The Commission denied late motions to intervene, requests for a supplemental environmental impact statement and requests for stay because the petitioners raised no new specific issues or facts that had not already been addressed in the previous orders or in FERC staff's environmental analyses.
Wellinghoff continued his objections to the East Coast terminal, saying "an analysis of relevant factors indicates that the Sparrows Point Project is not needed to serve the energy needs of the Mid-Atlantic and South Atlantic regions. Further, I found that the future energy needs of these regions can be better met with alternative resources, such as domestic natural gas infrastructure and renewable and distributed energy resources. Finally, environmental and community concerns had not been fully and fairly evaluated."
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