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Oregon Appeals FERC on Bradwood LNG; Backers Unfazed

As promised earlier in January, Oregon officials last Tuesday filed with a federal appeals court to reverse FERC's conditioned approval of the NorthernStar Natural Gas Bradwood Landing liquefied natural gas (LNG) receiving terminal project along the Columbia River. Undaunted, all three of Oregon's LNG projects kept pushing ahead with various local, state and federal permitting processes.

NorthernStar and proponents of a competing Oregon LNG project separately expressed satisfaction last Tuesday with other local, state and federal developments. In all, Oregon still has three active LNG terminal proposals -- two along the Columbia River and a third, Jordan Cove, at Coos Bay along the southern half of the Oregon coast.

Last month the Federal Energy Regulatory Commission (FERC) refused to reconsider its approval, which is based on Bradwood Landing obtaining all local and state permits (see NGI, Jan. 19).

As Gov. Ted Kulongoski has maintained he is not unalterably opposed to an LNG facility in his state, the filing to the Ninth Circuit Court of Appeals does not constitute an objection to a facility in the sate, according to Oregon Attorney General John Kroger and other state officials cited in a report in the Portland Oregonian.

Michael Grainey, the executive director of the Oregon Department of Energy, told NGI earlier in January that the state would appeal the FERC decision while speaking at an energy conference in Seattle the day the Commission decided not to reconsider its approval. At the time, Grainey said the state and other stakeholders were likely to appeal FERC's Jan. 15 action.

As the state launched its court appeal, NorthernStar reacted quickly and positively to rulings by the Oregon Land Use Board of Appeals (LUBA), which the LNG advocates said rejected 19 of 21 issues raised by environmental groups and other intervenors against the March 20, 2008 approval by the Clatsop County Board of Commissioners of a consolidated land use application for NorthernStar's Bradwood Landing LNG project. Two issues, however, were remanded to the county.

One of the issues sent back concerned an analysis of the overall project's scale -- not just the terminal site -- including power line and pipeline rights-of-way and estuary dredging. The appeals board wants the county to reconsider whether the project as a whole can still be considered "small or moderate" in keeping with county scale limitations.

"LUBA upheld 90% of the county's decision to approve Bradwood's consolidated land use application," said a Portland, OR-based NorthernStar spokesperson.

Meanwhile, a senior vice president and one of the co-founders of Oregon LNG, Mohammed Alrai, told NGI that his project, backed mostly by Leucadia National Corp., has already cleared the state land use appeals panel and the state appellate courts, and it is looking forward to U.S. Coast Guard and FERC actions in the next three months.

"We have two major milestones coming up in the next few months," Alrai said. "The first one is the Water Suitability Report from the Coast Guard, which we are expecting to be out in February, and second, we're expecting the draft environmental impact statement from FERC by the end of the first quarter or early in the second."

A Portland, OR-based spokesperson for NorthernStar's Bradwood Landing project told NGI last Tuesday that the terminal sponsors "always anticipated" the possibility of appellate court review, and Bradwood Landing's development plans built that possibility into the timetable.

"While the issue remains before the court, we will continue to work with the states of Oregon and Washington to assist in their review of our state permits," said the spokesperson, noting there is a proposed connecting transmission pipeline that would cross the Columbia River and traverse through a small portion of southwest Washington state. "Until we have satisfied FERC's conditions, together with all applicable state and local permits, construction on the project cannot begin."

Oregon LNG's Alrai predicted that Bradwood Landing, which is the most advanced of three LNG projects in Oregon, is now "stuck in a legal fight between the state and FERC" that could take years to resolve.

"At Oregon LNG, we have been working hard from the beginning to avoid any state-vs.-federal conflict," said Alrai, a former executive with Calpine Corp. when it began the proposed LNG project as the Skipanon LNG facility on a 96-acre site leased from the Port of Astoria, OR. "That is why we went through the local land-use process back in 2006. We are also working closely with the state to avoid similar pitfalls.

"We're currently working closely with the federal and state agencies to ensure our permitting process moves forward on both [state and federal] fronts. It takes time and a lot of money [tens of millions of dollars] to coordinate with all the agencies, but having a fully permitted project is our ultimate goal instead of getting bogged down by litigation between the state and the feds [a direct reference to Bradwood's current situation]."

Officials for NorthernStar talked bullishly about the land use appeals panel's 50-page decision that was released Tuesday. "It is well reasoned and supported by an exhaustive record comprising 10,000 pages of analysis and studies," said NorthernStar Senior Vice President Joe Desmond.

"By siding with the county's conclusions in nearly every instance, LUBA has reaffirmed that the county's original approval was well founded and supported by the record," Desmond said. "We are confident the remaining two items remanded by LUBA can be successfully resolved, and today's decision moves our project closer to providing a much-needed economic boost to Clatsop County and helping to stabilize the region's long-term energy costs."

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