While other proposed liquefied natural gas (LNG) projects started earlier and are further along in the siting process, Vancouver, WA-based Oregon LNG may catch up given that its permitting already has been cleared by the state land-use appeals process. The other two Oregon projects still face that oversight, which is expected to be contested by opponents of the two projects -- NorthernStar Natural Gas's Bradwood Landing site along the Columbia River and Jordan Cove in Coos Bay along the south-central Oregon coast.
For any of the trio, however, Gov. Ted Kulongoski has indicated in his comments on one project that he wants the federal review process made more stringent regarding the environmental and other impacts of proposed facilities on local areas and the region's energy mix. Kulongoski still maintains he is not opposed to LNG facilities in his state.
Oregon LNG CEO Peter Hansen expressed no concerns about timing or his competitors during an interview in mid-December with NGI, in which he questioned when the market will be viable for LNG along the West Coast of North America. He said his firm would be making many technical filings to the Federal Energy Regulatory Commission (FERC) before Christmas, with a target for making a formal FERC filing in April next year.
With the expected FERC draft environmental impact statement (EIS) late next year, Hansen said Oregon LNG should have its federal permits by mid-2009. "And, of course the U.S. Coast Guard process dovetails with that," said Hansen, who helped shape the original site selection for this project when he worked with Calpine Corp., and the project was called the Skipanon Natural Gas Facility.
"In theory, we could be up and operating in 2012, but the question is still out there as to whether the market will be ready at that time," said Hansen, who reiterated that he and his partners are talking on a regular basis to various potential sources of gas throughout the Pacific Rim, including Alaska. "We have contact with all kinds of market players on both ends of the market, and the real question is whether the Pacific Basin market will reach the U.S. West Coast in 2012. That still remains to be seen."
It could be too early for any of the Oregon projects, he said, noting that he thinks the other two projects -- though now ahead of his -- are essentially operating on the same time frame. "Having the right location in the end will assure that our project is the one that gets built," Hansen said.
NorthernStar's proposed Columbia River LNG receiving terminal site in Oregon received approval Dec. 13 from the local county elected commission for the rezoning it needs to develop the Bradwood Landing project. Clatsop County Commissioners voted 4-1 to allow the rezoning of land formerly used for a lumber mill, town and deep-water port.
NorthernStar said that based on the elected commission's vote, the company now will work with the county to prepare "findings consistent with the board's discussion for final approval," which will come at a subsequent commission meeting.
NorthernStar President Paul Soanes said this approval will allow the company to proceed with plans for constructing the terminal, and that construction eventually "will bring good jobs to Clatsop County, but more importantly, will help secure a more stable energy future for the states of Oregon and Washington."
Yet another Oregon LNG project was left waiting before the Christmas holidays, but with some positive expectations it will clear another hurdle in its permitting processes early in the new year. The Jordan Cove Energy Project LP secured a second key local permit before the holidays, a project manager told NGI .
Both Jordan Cove and Bradwood Landing hope to be able to concentrate on the FERC process next year. Jordan Cove officials, however, now have to wait until mid-January for indications from FERC on the project's environmental review schedule.
Coos County Commissioners Dec. 13 unanimously approved the conditions associated with the port permit for the Jordan Cove project's slip, but the elected board did not officially sign off on the findings until last Wednesday (Dec. 19), according to Bob Braddock, project manager for Jordan Cove and a principal in a private equity group that is bankrolling part of the project along with Alberta-based Fort Chicago Energy Partners LP.
Meanwhile, the Oregon LNG developers have submitted their preliminary waterways suitability filings to the Coast Guard, but they haven't gotten any feedback, and the real work is still ahead with that part of the federal review, Hansen said. "We've been working with the Coast Guard for the last three years, so if there were issues we'd certainly know about them."
Oregon LNG claims its site to the ocean-side of the Astoria Bridge, a four-mile expanse over the mouth of the Columbia River that links Washington and Oregon, is ideal from a shipping standpoint because there is little or no navigation of the river required. The site was taken over for LNG development in 2004 and at the time had to go through what Hansen called a "comprehensive plan" for the zoning change.
Hansen said the zoning for Oregon LNG's site is "an outright committed use for LNG." With most local permits in hand and "a very supportive local government" in Warrenton, OR, he said he feels that his project can make up lost ground relative to the other two projects.
"All of the appeals on our site have been exhausted. We got through the Land-Use Board of Appeals in Oregon and the Court of Appeals. We prevailed both places." (The land-use permitting could have been appealed to the Oregon Supreme Count, but project opponents decided not to do that, according to Hansen.)
Hansen began the Warrenton project in 2004 as the head of western development for Calpine, and then following the power plant developer's Chapter 11 bankruptcy filing two years ago he led a small group to purchase the development rights, along with a major publicly held funding partner, Leucadia National Corp., a New York City-based diversified holding company.
The site is on land owned by the Oregon State Lands Department and leased to the Port of Astoria, which subleased the site under a 65-year term to Oregon LNG.
A recently completed shipping and docking simulation by Oregon LNG confirmed that the Warrenton site is "well suited for even the largest vessels, such as the Q-Max," Hansen said. "The simulation also showed that the tankers can safely navigate the Columbia River bar.
Kulongoski told FERC in a letter last Tuesday that the draft environmental review of the proposed Bradwood Landing LNG project is "incomplete and flawed." His comments joined those of others questioning the review.
Generally, Kulongoski said, a more comprehensive environmental review of his state's three proposed LNG projects is needed. The governor acknowledged that federal authorities hold the ultimate authority for siting LNG projects, but he stressed that states retain authority over LNG terminals in regard to water quality, air quality and coastal zone management.
While reiterating that he is not opposed to building LNG terminals in Oregon, Kulongoski said in his letter that he thinks the NorthernStar Natural Gas proposed Bradwood project along the Columbia River needs to demonstrate more convincingly that its facility is needed, along with providing more detail on its technical and environmental mitigation plans.
The letter prompted NorthernStar's Joe Desmond, senior vice president for external relations, to say, "We appreciate the governor's interest in our project and LNG and take his comments seriously. Based on our earlier review of the draft agency comments, we are confident we can address all of the issues and look forward to working with the state agencies through the permitting process."
Generally, the LNG proponents emphasize the need for additional natural gas supplies in the Pacific Northwest and the diversity of imports being good for gas-on-gas competition from the region's traditional sources in western Canada and the Rockies. LNG imports will "insulate the regional economy from the ripple effects of higher energy costs, while boosting employment in the county," a local Bradwood Landing spokesperson said.
Increasingly, NorthernStar has made it clear that it expects to have a permit and begin construction next year, despite the fact that opponents of the project are likely to challenge the favorable local county decision before the Oregon Land-Use Appeals Board. The project's environmental review at FERC is moving along so far with no hitches. Last August, the FERC staff indicated that with "proper mitigation," the project should get a favorable nod.
Public comment on the FERC's draft environmental impact statement (EIS) for Bradwood is open through Dec. 24, the Bradwood spokesperson said. "FERC staff will then respond to all of the comments it has received before issuing a final EIS. "Additionally, we will continue to work with Oregon natural resource agencies for related state permits."
Jordan Cove's Braddock said FERC did not release an environmental assessment schedule, and issued a data request instead to his project's affiliated Pacific Connector Pipeline proponents that indicated the federal regulators would not be issuing its environmental review schedule until the proposed pipeline project submits a "biological assessment" of its proposed natural gas pipeline from the LNG terminal to existing interstate pipelines in Oregon.
This is part of the process for the draft environmental impact statement [EIS]," said Braddock, noting the eventual federal schedule should provide the "reality check" of when Jordan Cove can eventually expect to complete the FERC certification process. Pacific Connector hopes to provide the biological data "shortly after the first of the year," so Braddock expects the FERC schedule will be known by mid-January.
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