Liquefied Natural Gas Exports? (Part 1)

Liquefied Natural Gas Exports? (Part 1)

by: Posted on: April 13, 2012

Photo: Western Environmental Law Center

By Susan Jane M. Brown, Staff Attorney,Western Environmental Law Center

Editor’s Note: Susan Jane, a staff attorney with the Western Environmental Law Center (WELC), gives us a comprehensive introduction to the complexity surrounding the fight to stop liquefied natural gas (LNG) export terminals in the Northwest. A must read for those interested in private property rights, hydrofracking, Northwest export terminals, endangered species, and jurisdictional conflicts over environmental issues. See Part 2 here.

 

The liquefied natural gas (LNG) industry is trying to exploit the growing interest in new “alternative” energy development. In this rush, Oregon has been targeted for the development of LNG export terminals along its coast, and nearly a thousand miles of gas pipelines that would crisscross the state. Thankfully, due to the diligence of numerous landowners, conservation and fishing organizations, lawyers, and others who have successfully fought back LNG proposals, only one project remains a real threat to the values that Oregonians hold dear: the Jordan Cove LNG terminal and its associated pipeline, Pacific Connector. The terminal would be located at the mouth of Coos Bay, Oregon, while the 234-mile-long, 36-inch-diameter underground natural gas pipeline would extend from the Jordan Cove terminal southeast across Oregon’s Coos, Douglas, Jackson, and Klamath Counties, to its terminus near Malin, Oregon.

The shipping terminal, requiring significant dredging to accommodate the huge deepwater LNG tankers, would decimate estuaries and fisheries. The pipeline would clear cut a straight corridor at least 50 feet wide across rivers and through national forests, decimating riparian areas, old growth forest groves, and recreational trails (including a crossing of the Pacific Crest Trail). Endangered and threatened fish species such as Chinook salmon, Coho salmon, Chum salmon, steelhead, coastal cutthroat trout, pacific lamprey, river lamprey, and green sturgeon would all be adversely affected. These ecological impacts have led the U.S. Fish and Wildlife Service, National Marine Fisheries Service, Environmental Protection Agency, and the State of Oregon to raise serious concerns over the project.

Originally, the Jordan Cove and Pacific Connector (JC/PC) project was conceived as an “import” project to bring gas to Malin, where it would join the north-south pipeline and head south to California. This would mean that highly flammable LNG would be shipped to the United States from countries abroad, heated up and regassified at Jordan Cove, and then piped to markets in California via the Pacific Connector pipeline (little if any of the gas would have been utilized in-state). Interestingly, the Natural Gas Act of 1938—the law that governs natural gas pipeline and terminal siting and construction—allows a private company like Jordan Cove/Pacific Connector to use eminent domain to take ownership of private property within a pipeline’s right-of-way. Given that the majority of the pipeline will cross private lands, this is a significant attack to private property rights.

Obviously, once the pipelines are built, natural gas could flow through them in either direction; one of the chief concerns with the JC/PC project was that the “import” terminal would be converted to export natural gas from reserves in Canada and the Rocky Mountain states to markets overseas. It turns out those concerns were well-founded.

In 2009, the Federal Energy Regulatory Commission (FERC) – the federal agency in charge of permitting LNG terminals and pipelines – issued a “Certificate of Public Convenience and Necessity” for the JC/PC project, explaining that there was “demonstrated need” for natural gas imports to the United States for domestic use. As part of this determination, FERC concluded that it was in the public interest to take private property from landowners within the pipeline right-of-way, and give it to JC/PC for use for construction of the pipeline.

The Western Environmental Law Center (WELC) and a coalition of 18 conservation and citizen organizations and individuals filed a Petition for Rehearing before FERC in January 2010, arguing that the project violated numerous federal environmental laws. In addition, WELC argued that in fact, there was no need for natural gas imports and that domestic energy sources should be explored before committing to foreign imports. FERC has sat on our Petition for more than two years.

And what a difference those two years have made.

Veresen Inc. – a Canadian firm that holds the controlling interest in the JC/PC project –steadfastly denied rumors for years that building a terminal and pipeline to import foreign natural gas was just a ruse for a more lucrative “flip” to export natural gas. Veresen Inc. filed a $50 application in late 2011 with the United States Department of Energy (DOE) announcing their intention to do just that: export domestic natural gas from the Interior West to international destinations. DOE rubberstamped the permit application. Jordan Cove/Pacific Connector’s proponents have yet to file paperwork with FERC announcing the alteration of the project, and it is hard to predict how FERC will respond, but we would expect FERC to take another look at the project before granting final approval. It is likely that additional environmental review would be required before that final approval could be given.

As part of FERC’s re-analysis of a JC/PC project built for export rather than import, FERC will need to assess not only the environmental consequences of this flip, but also whether exporting domestic natural gas is in the public interest.  If the project is not in the public interest, then JC/PC could not make the showing necessary to obtain a Certificate of Public Convenience and Necessity, and the project would die on the vine.

When the Jordan Cove/Pacific Connector project was first proposed, known and technologically feasible sources of domestic natural gas were relatively small.  Consequently, it made market sense to import foreign natural gas for domestic use, and FERC could reasonably conclude that import was necessary for domestic energy use and therefore in the public interest.  Now, with the rise in hydrofracking and other extraction techniques, formally unreachable domestic sources of gas have become available.  Suddenly, it makes more financial sense to extract natural gas domestically and export it to foreign markets.  This market shift compelled JC/PC to change the basic nature of its project from an import exercise to an export boondoggle.  But there is very little to suggest that exporting domestic natural gas will be in the best interest of American citizens.

Regardless of how FERC responds, WELC and our clients are well-positioned to challenge the Jordan Cove/Pacific Connector project in court.

Not only is FERC in our sights, but also several other opportunities exist to influence the fate of the JC/PC project. For example, the expert federal agencies – the National Marine Fisheries Service (NMFS) and Fish and Wildlife Service (FWS) – have begun preparations of the biological opinions to analyze the project’s effects on sensitive wildlife species. While these two agencies have been very critical of the JC/PC project, they have also indicated that there is a lack of information on the actual effects of the project on wildlife.  While it is JC/PC’s obligation to provide the missing information, the company has repeatedly told NMFS and FWS that the expert agencies have all the information they need to complete consultation, regardless of the agencies’ protestations to the contrary.  It is possible that NMFS and FWS will conclude that due to the lack of information, the terminal and pipeline project will “jeopardize” (i.e., likely lead to the extinction of) listed species. On the other hand, if the biological opinions do not reflect the real environmental consequences of the terminal and pipeline, we will challenge the opinions in court.

Similarly, the Forest Service and Bureau of Land Management (BLM) must undertake an environmental analysis of the effects of constructing and operating the pipeline on federal lands (about 31% of the pipeline crosses National Forest or BLM land). Given the shift from import to export, the federal land managers have delayed commencement of the environmental analysis process, but we expect to be heavily engaged throughout the process, which could take several years. Because the project runs afoul of numerous Forest Service and BLM forest plan standards, we anticipate significant litigation challenging the federal land managers’ environmental review.  If successful, this litigation will effectively kill the project, because without authorization to cross public lands, the Jordan Cove terminal will be unreachable and the Pacific Connector pipeline will have nowhere to go.

Of course, the majority of the pipeline crosses private lands, and JC/PC must comply with state law that protects those lands. In 2009, Pacific Connector filed suit in federal district court challenging the State of Oregon’s permitting requirements for the pipeline, alleging that the State’s requirement that the company secure the permission of affected landowners before dredging and filling wetlands on the landowners’ private property is unconstitutional under the Commerce Clause. Because WELC believes that Oregon’s “signature requirement” protects the interests of private landowners and should be upheld, we have intervened in Pacific Connector’s litigation on behalf of the State. In this case, we represent a group of private landowners who own property within the pipeline right-of-way, and who have refused to give their permission to Pacific Connector to destroy sensitive aquatic features on their properties. Our clients include farmers, timberland owners, ranchers, and homesteaders who have courageously stood up for their rights by fighting Pacific Connector’s attempts to circumvent an important State law that protects the private property rights of all Oregonians.

The bottom line? LNG in Oregon has an uphill battle, and it is a target-rich environment for WELC and our clients and partners.

 

P.S. from the Editor:

In Part 2, Susan will tell us more about private property owners’ struggle to protect their land from the pipeline’s path. Pacific Connector claims that because the pipeline impacts interstate commerce the Commerce Clause protects them from having to comply with state regulations, like the “signature requirement”, and thus the state has to stay out of the way. The property owners believe that these state regulations protect their 5th amendment property rights. Stay tuned.


6 Responses to “Liquefied Natural Gas Exports? (Part 1)”

  • Thank you for this valuable information and the work you do!!
    by: abe Cohenon: Saturday 14th of April 2012
  • Good news!!! FERC withdraws approval to JC/PC project.
    by: abe Cohenon: Tuesday 17th of April 2012
  • Thank you for this information on WELC and what they have been doing for us directly affected by the JC/PC Project. What I'd like to know know now regarding PCGP - since certificate is vacated and they moved the compressor station from Butte Falls to Malin for the export process, etc., will PCGP have to start from square one when they reapply? Pls. see letters for my background. February 1, 2012 Dear Honorable Governor Kitzhaber, I was very moved by an article written by you for the Upper Rogue Independent (dated Dec. 20, 11) outlining steps to improve and grow Oregon's economy. In the article contained goals for the Oregon Business Plan. Item 1. Create and retain economic activity and family wage jobs while reducing carbon footprint. 2. Expand our manufacturing sector to reduce our need to import goods and service. 3. Minimize the export of our raw materials.., 4. Minimize the need for imported energy. However, I do take exception to the Oregon Business Plan's idea to 'Simplify and streamline regulation and permitting'. This is premature. The issues of Oregon State Environment Report 2000 needs addressing and then brought forward. I am a retiree of the San Diego Air Pollution Control District and have worked closely with inspectors, engineers and industry customers and know only too well the snowball effect, extremely costly effect of loopholes and ill thought out regulatory processes directly attributing to a range of environmental disasters that keep on giving, or rather, taking for decades to come. Well thought out plans as you know require analysis, factual reporting. A vision is not rushed, but nurtured. One small case in point (on the scale so to speak) is my own home. As a homeowner in the Upper Rogue area of Shady Cove and Trail, my family would be directly affected by the Pacific Connector Pipeline Project. We have been fighting this pipeline from the start when we found our newly built, passive solar dream home within this projects footprint. This past summer we found it necessary to put in place a large curtain drain along the entire east side of our property to protect against flooding to our basement as the eastern slope angles up 45 degrees and last years, and current, rains are substantial. This project's proposed 100 foot wide easement and several 'temporary work areas' directly north, east and south of our home would devastate us in terms of vital forest trees and shrubs removed thus eliminating the very erosion control methods now protecting our home. Eminent Domain would quite literally be the rape of our land, home and lifeblood. My family is but one of many on the Old Ferry Road with similar situations. The aquifer feeding our collective wells would be blasted and so compromised in ways we cannot imagine. Please hold fast your commitment to the homeowner, farmer, eco-friendly growing tourism industry, homegrown renewable s industry and keep Oregon independent of outside interests. I saw a foreword written by you in The Rogue, Portrait of a River when you were practicing medicine. My family, as well as every Oregonian will have to believe that you retain the values you held dear with regard to the environment, air and stream quality, and the quality of life found uniquely here. Yours sincerely, Marcella and Alan Laudani 3024 Old Ferry Road Shady Cove, OR Federal Energy Regulatory Commission 888 First ST NE Rm 1A Washington, DC 20426 Attention: Mr. Paul Friedman; DG2E/G3 To Whom It May Concern: Our home and 2.9 acre parcel property sits east of the Upper Rogue River near Trail, OR and the parcel is bisected by the Old Ferry RD. The home is designed to sit into a 25 degree angled slope with a retaining wall on the north and eastern portions of the foundation. This slope then continues to rise gradually 30 feet to the east, and then sharply, at a 45 degree angle east and above our home. The soils in the immediate vicinity surrounding my home are Medco cobbly clay and McNull clay loam which are cement like in summer and pudding like in winter. Last winter while we were placing our electrical cable under ground the area received over 16 inches of rainfall between December 15 and February 28, 2006. There were mud and landslides. The soil profile does not support major erosion or deforestation to the mountains ridges facing properties on its slopes. Our home is now within 100 feet of the Pacific Connector LNG Pipeline Route to the east as of September 27th when it was moved from a less impacting ridge route. Thus far this year we have received over 11 inches of rainfall (we have a home weather monitoring station) with over .5 inches received in a 1 hour period recently. Rainwater typically sheets off the top layers of soil when accumulations of .5 and higher occur within short periods of time. This is a common occurrence here. The A Horizon soils then quickly become pudding like and slough off and run down the mountainside with extended periods of rain. What protects our home and property from major erosion is the forested area of numerous mature trees and chaparral approximately 30 feet to the north; east and south. On February 6th of this year, I invited Dave Randall and Rex Owings of Pacific Connector Pipeline to visit my property. Walking the hillside behind the home to the east revealed that although we had experienced a ‘dry spell’ for over five weeks there were puddles and standing water throughout our trek. The ground was still fully saturated from the previous rains. Given to me was a GPS map showing this altered route, let’s call exhibit “A”. Not only is their an easement 100 ft. wide, but they tell me they want to place a truck standing area where this only cover of forested area protecting our property exists. We would be left with nothing to protect our home and property from the elements! Not only would the existing route, a route wrapping around from the north and to the east, place us in harms way but would be reckless, absolute negligence and place us in a direct line of impending disaster. So it is with indisputable firsthand knowledge that they, and now you, can witness the circumstances necessitating a modification to Pacific Connector’s application pertaining to this segment of pipeline, easements and equipment standing area. Dave Randall who is the field lands lead for Williams at Pacific Connector, said to say to you, “We think we can and should move some things around”, in terms of redirecting the route so as not to encroach so close to our forested property. He also noted an existing well within the easement and next to the proposed pipeline route on the Barbers’ property. This is located on the peninsula on the east side of the river. Additionally, we are dependant upon a well for all our water needs. The gentlemen were given a tour of our maintenance room which houses the well pump, interior sprinkler systems’ control panel, high pressure water pump and 300 gallon tank, but also pointed out was the hydronic water heating systems boiler and piping system which heats water then pushes condensed steam up to heat the home. Also shown were the duo water filtration/softener systems. Originally, our well water was extremely high in Calcium, moderate Sodium, but also was listed .010 of Arsenic, or higher than the new EPA limit of 0.0005. The reverse osmosis filtration system, coupled with the softener/filtration system, has brought these levels down considerably so as to not prove a health hazard, fire hazard nor cake these sensitive water systems with calcium deposits, dense concentrations of clay residues, silts or other harmful residues. Bringing a 36 inch pipeline and easements in such close proximity will disrupt or destroy this systems ability to filtrate by breaking down the A and B Horizons in the top layers of soil on a hillside. Likely too, boulders and bedrock that are cracked and shifted will damage the aquifer that supports our only water supply and filtration systems. I would note that our septic system pumping station and leach beds are located within a close proximity to the proposed truck and equipment standing area as well. Lastly, there is at least one underground stream running through our modest parcel discovered by our contractor as he dug the foundation to our home in the fall of 2005. The stream is small unless there is substantial rainfall like last winter. Boulders were necessary to fill a sinkhole in the area of construction. Any further erosion to this property will be catastrophic. . Most sincerely, Marcella and Alan Laudani Parcel 34 1w 03a Lot 1701 Enclosures: Jackson CNTY, OR 97539 (1) GPS map –black & white GPS map –colorized (10) color photo prints
    by: Marcella Laudanion: Wednesday 18th of April 2012
  • We recently received a follow up email from Susan Jane, it stated: "[FERC] pulled the authorization for the project. The order explains that FERC did not believe the change in the purpose and need of the project (import to export) could support the existing authorization for the terminal and pipeline, and therefore granted our motion for reconsideration and vacated the certificates of public convenience and necessity for the terminal and pipeline. As you may recall, this was one of the routes we expected FERC to take. I would now expect FERC to analyze the project anew, as an export facility. NEPA is likely to take at least a year, by my estimation. Interestingly enough, Jordan Cove is on FERC’s agenda for its meeting Thursday, so I’m not sure what they will be discussing."
    by: Editoron: Thursday 19th of April 2012
  • Natural Gas and fracturing is not safe for the ennnorvmeit. There is a reason they want to keep it away from people and cities because they get sick, the water that comes out of their faucets ignites with flames, and they can't even bath in their own water. The animals in the area also show signs of extreme sickness.Puerto Rico will not last long if this is allowed. How can we really sacrifice an Island for short term profit?Everyone should watch the documentary Gasland
    by: Jomaron: Friday 15th of June 2012
  • Very good article. This process is extremely dangerous for the environment. The effluents that come out are very poisonous and pose serious health hazards and cause damage to the flora and fauna. This must be stationed far away from human and animal habitation. Puerto Rico is a beautiful island and this must not be allowed here.
    by: Design Katherineon: Friday 27th of July 2012

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