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Oregon Lawmakers Consider Move to Expand NatGas to Rural Areas

In a region with increasingly robust natural gas supplies and infrastructure, Oregon lawmakers are considering a bill (SB 32) to empower state regulators to develop ways to extend gas distribution utility service to more of its sparsely populated areas that rely on trucked-in propane as their heating source.

The propane industry is obviously opposed to the measure, but thus far it has not drawn any other significant opposition, and a spokesperson for the Oregon Public Utility Commission (PUC) in Salem, OR, on Thursday told NGI that the bill is expected to pass. It still has to clear separate ways and means committees in both houses of the state legislature before the scheduled legislative adjournment July 11.

SB 32 directs the PUC to form a work group to study methods by which public utilities furnishing natural gas may expand their service areas. It calls for results of the study to be submitted to lawmakers by Sept. 15, 2016.

As part of the bill, the legislature would be declaring that "access to natural gas is in the public interest," and extension of pipelines and other infrastructure is "necessary for providing gas to areas that do not have access." It further says that gas service for local communities is needed to bolster their economies.

Lawmakers have cited the town of Estacada, OR, which was hit by a lumber mill closing in recent years, as an example of the need for an expanded gas network. Estacada has made economic development a top priority, but says it can't attract any new industry because it lacks natural gas service.

A proposed $13 million pipeline extension to Estacada is one of the potential projects that the PUC-led work group would examine and come up with alternatives for how to get the extension done.

The latest projections from the Northwest Gas Association (NWGA), which includes Oregon, Washington, Idaho and British Columbia, estimate an annual growth rate in gas demand at 1.2% over the next 10 years.

NWGA said the Pacific Northwest is "ideally positioned between two prolific natural gas producing areas [western Canada and the U.S. Rockies]," so it continues to "benefit from this abundant gas supply." As a result, various manufacturers and other large energy users are considering locating or expanding in the region.

A number of activist groups in British Columbia, Oregon and Washington would like to shut down all of the 27 different energy projects -- natural gas pipelines, coal terminals, oil pipelines, and oil-by-rail projects -- that dot the region in the name of sustainability and climate change mitigation (see Daily GPI, June 11).

As energy-hungry Asian nations look to the region as a launching point for North American energy supplies, groups like Seattle-based Sightline Institute, Power Past Coal, Stand Up to Oil and the Climate Action Coalition have set their sights on wiping out proposed fossil fuel exports, according to a report in the Portland Business Journal.

None of them, however, has voiced a position on SB 32. In an editorial on Wednesday, the Portland Oregonian noted that state legislators had "discovered the value of cheap natural gas" in supporting SB 32 and that opposition to proposed gas exports is not "universally shared," adding that two-thirds of the gas distributed by the state's major gas distributor, NW Natural, comes from Canada.

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