Calgary Pipeliner Left to Wait as U.S. Regulator Delays Decision on Oregon LNG Terminal
The Calgary-based pipeliner behind a proposed US$10-billion liquefied natural gas export terminal in Oregon is facing what the Financial Post calls a “surprise setback”, after the Trump-appointed Federal Energy Regulatory Commission (FERC) voted to delay its decision on the plan to send Canadian gas to Asian markets.
The terminal would serve 120 LNG tankers per year carrying product from both the United States and Canada.
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“It was the second time FERC had denied or deferred the Jordan Cove application, and stymies effort by landlocked Canadian gas producers to find new markets beyond Alberta,” the Post reports. The vote comes at a time when Pembina Pipeline Corporation is one of a group of gas producers and pipeliners “looking for more inventive ways to move natural gas out of Western Canada, clearing a glut in Alberta and B.C. that has resulted in rock-bottom prices.”
Raymond James analyst Jeremy McCrea said the FERC decision “was disappointing but not necessarily surprising given it’s become more difficult to build major [fossil] energy projects across North America,” the Post writes.
“I’ve become so numb to all of these delays,” McCrea said. “It’s more of a surprise if something does go through.”
While the Post report focuses on the growing angst among Canadian fossil companies, U.S.-based DeSmog Blog has more detail on the thinking behind the FERC vote.
“If built, the $10-billion Jordan Cove project would become the largest source of global warming pollution in the state,” DeSmog writes. “FERC commissioners voted 2 to 1 to postpone a decision on federal approvals for the project after a string of permit denials from the state of Oregon,” with Commissioner Bernard McNamee saying he needed an additional week to review the latest denial from the Oregon Land Conservation and Development Commission (LCDC).
“After long deliberation and review of the record before the department, it is clear that there is no reasonable assurance that the proposed project is or will be consistent with the laws, regulations, and policies that continue to maintain the Oregonian way of life,” the LCDC wrote in a February 19 decision. “Overall, the issuance of this decision protects the interests of the State of Oregon and those who call Oregon home.”
The commissioners added that, without the state’s sign-off, FERC and other federal agencies “cannot authorize this project”.
DeSmog details the maneuvering for and against the terminal, including the resignation of LCDC member and project proponent Melissa Cribbins, a county commissioner currently running for state office whose contacts with Jordan Cove proponents had been the focus of a DeSmog investigation. The commission stressed the project’s risks to coastal tourism, fishing, shipping, and other industries.
“Coastal effects analyses show that the project will negatively impact Oregon’s coastal scenic and aesthetic resources, a variety of endangered and threatened species, critical habitat and ecosystem services, fisheries resources, commercial and recreational fishing and boating, and commercial shipping and transportation, among other sectors critical to the state,” the LCDC wrote. Jordan Cove proponents countered that FERC had the authority to override state objections, and should do so.
Officials now see a possible legal battle coming up, with Governor Kate Brown indicating Oregon “would consider all available options” if FERC tried to override state processes.
“I think the evidence is very clear that the strategy now for this project is to wholly ignore Oregon and its requirements and to have the Federal Energy Regulatory Commission approve it, and somehow have the courts rule that Oregon law, that quite clearly can’t be pre-empted by the federal government, can be,” State Sen. Jeff Golden said early last month. He described a “legal fight that almost certainly is coming, to uphold the law of the land and tell the Trump administration you don’t get to cancel environmental safeguards all over this country on behalf of the fossil fuel industry.”