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NorthernStar LNG Asks FERC to Reject Oregon Plea

As pressure mounts from prospects for new gas supplies in British Columbia and the Rockies, NorthernStar Natural Gas moved aggressively last week to protect its proposed Bradwood Landing liquefied natural gas (LNG) project along the Columbia River in Oregon, asking FERC to reject state officials' call for reissuing a draft environmental impact report (EIR).

NorthernStar followed that action with a 22-page filing to the Federal Energy Regulatory Commission (FERC), answering an earlier motion by the Oregon Department of Energy, along with a 13-page rebuttal of the Oregon energy unit's report, charging that much of it is incorrect except for the general pronouncement that "increased supplies of natural gas" will be needed to meet the state's future energy needs.

A Portland, OR-based spokesperson for the LNG developer apologized for his voluminous mailing of documents, but said "there was so much wrong with the Oregon energy department report that there was a lot to correct, and the same applied to the state's letter to FERC."

The backers of the proposed Bradwood Landing site swept aside the Oregon department's contention that Rocky Mountain supplies would be readily available at a lower cost and with greater reliability than LNG imports.

NorthernStar Senior Vice President Joe Desmond alleged that "it appears [Oregon] based its claims [to FERC] largely on the false assertions contained in a letter submitted to FERC by an opponent group, many of which appear to have been adopted by the state without independent review." Desmond argued that the state has "a responsibility" to ensure Oregon's energy needs are met in the "most environmentally and economically sound way."

While it was announced in the past few days that a joint venture of TransCanada and Northwest Pipeline is moving ahead with an open season for a possible new westerly [Palomar] pipeline from the Rockies into Oregon (see related story) and the province of British Columbia sold record oil and gas leases for new exploration to the north, NorthernStar's moves appeared to be a direct assault on a May 9 letter the state sent to FERC in which it alleged that Bradwood has changed its environmental mitigation and LNG terminal development plans, meaning the environmental review should be revisited.

"The state's concerns that the project has changed substantially are based upon incorrect information," Desmond said. Similarly, the LNG developer's chief external affairs officer said the Oregon energy department's recent report comparing LNG to potential new supplies via pipeline reached incorrect conclusions regarding pricing, greenhouse gas emissions, and the natural gas market in the Pacific Northwest and globally.

"The department's report was a snapshot in time, and there are limitations to the type of conclusions that can be drawn from such an analysis," he said.

Desmond pointed to a recent filing by Portland-based Northwest Natural Gas Corp. to the Oregon Public Utility Commission, concluding that there would be "substantial cost savings to Oregon consumers and businesses" through lower pipeline transportation costs tied to the delivery of LNG, compared with alternative sources of gas.

In April four senators whose states have been proposed as sites for controversial LNG projects -- including Sen. Ron Wyden (D-OR) -- introduced legislation to repeal a provision in the Energy Policy Act of 2005 (EPAct) that gave FERC exclusive authority to site onshore LNG terminals (see NGI, April 14a). At the same time, Oregon Gov. Ted Kulongoski had lawyers looking at the state's rights to withhold permits for FERC-approved LNG projects with which the state disagrees (see NGI, April 14b).

The Bradwood LNG project cleared its final local regualtory hurdle in April when it received county approval for upgrading its three-mile-long access road to the site (see NGI, April 21).

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