Although the backers already have signaled that they will push back, Oregon Attorney General John Kroger has filed with FERC asking the federal regulators to revoke permits for the Jordan Cove liquefied natural gas (LNG) project at Coos Bay and a related transmission pipeline along the south-central coast of Oregon.
Oregon’s chief legal officer contends that the Jordan Cove project will raise natural gas prices domestically and therefore it is no longer in the public interest. The Associated Press reported that a senior assistant attorney general, Janet Prewitt, filed with the Federal Energy Regulatory Commission (FERC) last Friday.
Jordan Cove’s announcement in September that it was expanding its proposed project to an import-export facility for LNG apparently caused the attorney general’s office to conclude that an exporting business would tend to upset the current balance of abundant supplies and low prices for North American natural gas, driving up domestic prices as global markets hungry for cheap gas cut into the current surpluses.
Last month the Jordan Cove officials said they would seek to make the LNG facility and its 1.2 Bcf/d connecting transmission pipeline a dual export-import project, which means the pipeline flow will be reversible (see Daily GPI, Nov. 14). Fort Chicago Energy Partners is the main backer of the LNG project, and one of its affiliates, along with Williams Pacific Connector Gas Pipeline LLC and PG&E Strategic Capital Inc., are the partners in the 234-mile, 36-inch diameter Pacific Connector Pipeline Project connected to Jordan Cove and similarly approved by FERC.
Project Manager Bob Braddock told NGI Tuesday that Jordan Cove expects to make a response to Oregon’s filing as part of FERC’s pre-filing process in January. The International Port of Coos Bay, which is strongly supportive of the LNG project, may respond directly to Kroger, according to Braddock.
Braddock said he was not surprised by Kroger’s action because the attorney general has generally opposed any fossil fuel development for the past three years. “He [Kroger] was against any use of oil or natural gas when I first met him [in October 2008] and has never wavered from that position,” he said. “He does not speak for the state, though, and will leave office next year.”
“Exportation of domestic natural gas will reduce the supply available to the U.S. residential and industrial consumers, [and that is] likely to result in increasing the domestic price of natural gas, which will have a consequent adverse impact on the regional economy,” Prewitt wrote in the FERC filing.
Other local news reports also play up the new supplies of gas to the Pacific Northwest coming from the Rockies through El Paso’s Ruby Pipeline, bringing supplies at around $4/MMBtu, compared with prices in other global markets such as the Far East, which buys LNG at prices up to $11/MMBtu. This further makes the LNG facility less necessary, they argue.
Braddock did not say how Jordan Cove intends to respond to these issues in its upcoming FERC filing, but he was adamant that the project backers will respond.
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