Less than six months after FERC issued the project its second defeat, a Trump administration official boldly announced, “The first thing we’re going to do is we’re going to permit an LNG export facility in the Northwest.”
It’s a project that refuses to die, despite efforts to keep it from moving forward.
In 2016, the US Federal Energy Regulatory Commission (FERC) voted unanimously to deny approval for the Jordan Cove Energy Project, an oversized fracked gas project proposed in a small town on the Oregon Coast. But less than six months after FERC issued the project its second defeat, a Trump administration official boldly announced, “The first thing we’re going to do is we’re going to permit an LNG export facility in the Northwest.”
The White House soon confirmed that the facility in question was one that the federal government had only just denied – the Jordan Cove liquefied natural gas export project. The Northwest continues to be a prized location for LNG export development. In British Columbia, for example, there are sixteen proposals to ship liquefied natural gas (LNG) overseas, plans that if carried out would have devastating effects on the province’s carbon reduction goals. In the northwest United States, several proposals for LNG export terminals have been defeated or denied, but Jordan Cove – and its hazards, pollution, and imposition on landowners – has suddenly come roaring back. Oregonians are meeting it with a resistance that has been growing for over 10 years.
In this piece, we take a look at what has and has not changed about the project, as well as concerns about the executive branch’s interference in the permitting process.
The Jordan Cove Energy Project
The Jordan Cove Energy Project would be a large fracked gas shipping hub situated on the shores of Coos Bay on the southern Oregon coast. Jordan Cove would receive fracked gas by pipeline, cool it to a liquid state using a cryogenic refrigeration process, and then export it using large oceangoing vessels. (See “What Goes on at an LNG facility?”) The facility would be capable of exporting 7.8 million tons of LNG per year, a 2 million metric ton increase over the project’s previous proposal. Traditionally, LNG plants in the US produced less than 2.5 million tons per year, but advances in technology have enabled project backers to build much larger facilities in recent years. Pembina, the company backing the project, anticipates a final investment decision in 2019, with an in-service date in 2024.
Jordan Cove was originally backed by Canadian energy company Veresen, a diversified energy infrastructure company that owns and operates LNG pipelines and processing plants. The financially shaky company failed to line up sufficient buyers, which laid the foundation for FERC to deny the project, citing negative impacts on landowners along the pipeline route—namely, the taking of their land—versus little evidence that there was any demand for the fuel. It was a surprising rejection given the Commission’s history of easily approving LNG facilities.
Even if the project had been approved, Veresen was not sufficiently capitalized to construct the pipeline and terminal. The company’s CEO acknowledged that the project was “a high risk game,” and Veresen struggled to secure buyers for its LNG. In October 2017, Veresen was bought out by Calgary-based oil and gas company Pembina in a $9.4 billion deal, a move that improved the funding prospects for the Jordan Cove project. The Veresen purchase made Pembina the third largest energy infrastructure company in Canada after Enbridge and TransCanada.
The current Pembina-backed Jordan Cove project proposal would have five liquefaction trains, each capable of producing about 1.5 million tons of LNG per year, two LNG storage tanks with a total storage capacity of 320,000 cubic meters of gas, as well as marine facilities for loading ships.
There’s nothing like it in the Northwest. Although the company’s website names four LNG storage facilities in the region as “similar to Jordan Cove,” these facilities are substantially smaller and they are not designed for export. They produce and store relatively small quantities of LNG for local utility customers during peak winter demand.
The planned 36-inch diameter Pacific Connector Gas Pipeline would deliver fracked gas to the project. It would run across 229 miles of public and private land from a pipeline hub in south-central Oregon to the coastal site of the facility. The proposed pipeline route would threaten traditional tribal territories and more than 2,000 acres of forest, and would cross 485 wetlands and waterways, including some of the Northwest’s most prized streams like the Rogue, Klamath, Umpqua, Coos, and Coquille Rivers.
The Pacific Connector itself could be fed with gas delivered either by Pembina’s Ruby Pipeline, a pipeline that runs from the Rocky Mountains to Malin, Oregon, or TransCanada’s Gas Transmission Northwest pipeline, which runs from British Columbia to Malin. Both are large pipeline systems that have spare capacity, so either would be able to deliver all of the gas needed for Jordan Cove.
Community and environmental impacts
Jordan Cove and the pipeline to feed it face opposition from landowners and indigenous communities along the pipeline route, including the Klamath, Yurok, and Karuk Tribes. The pipeline would disturb sacred sites, burial grounds, and cultural resources, and it could harm critical runs of salmon and steelhead. Over 500 landowners along the pipeline route would be impacted, many by eminent domain proceedings in which the government would seize a portion of their land for the private use of Pembina’s pipeline. In fact, more than 400 landowners, organizations, tribal members, and concerned citizens have filed motions with FERC to intervene. This would allow them to be included in the agency’s decision-making process on the grounds that they will be substantially affected by the agency’s determinations.
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The project would have an astounding carbon footprint. A 2018 analysis by Oil Change International found that Jordan Cove would produce 2.2 million metric tons of greenhouse gas annually, including emissions from the terminal, compressor stations, and leakage along the pipeline route in-state. That’s 16 percent of Oregon’s greenhouse gas emissions goals for 2050 and 3.5 percent of the state’s 2015 emission total.
Factoring in emissions produced by out-of-state elements of the project such as fracking, pipeline transmission, and tanker transport brings the project’s annual emissions to 36.8 million metric tons. That is equivalent to the annual emissions from 7.9 million vehicles, and is more than 15 times the annual carbon emissions produced by Oregon’s only remaining coal plant, which is set to close in 2020 due to pollution concerns. Methane leaks are one of the main downsides of natural gas usage, and can undercut the emissions reductions of a gas operation to such an extent that it may break even with coal or diesel fuel from a climate perspective.
Permitting process, and a bipartisan fight?
Pembina applied for FERC approval in September 2017. In April 2018, the company filed a request with the US Department of Energy to increase the amount of gas it can export from 6 million tons per year to 7.8 million tons per year. FERC has issued notice of intent to draft an environmental impact statement (EIS)—the document on which other project permits will be based— but has not yet announced when the new EIS will be ready for public comment. In addition to federal oversight, various state agencies would play a role in permitting the pipeline and the export facility. The Oregon Department of Environmental Quality and the Army Corps of Engineers, for example, are accepting public comments on the project’s application for clean water permits. Comments are due to the Corps of engineers by July 21, while the Department of Environmental Quality will accept comments until August 20.
Already, the project’s application is showing flaws. The Oregon Department of Geology and Mineral Industries submitted a letter to FERC noting that Pembina’s application materials use old data that don’t fully account for the earthquake and tsunami hazards that could disrupt the pipeline. Oregon’s Land Use Board of Appeals found error with the county’s land use approval and sent the issue back to the county for review.
Although Pembina has budgeted $135 million for Jordan Cove’s development costs in 2018, its CEO says the development of Jordan Cove is a “blue sky” goal for the company and the company seems worried about project development and construction costs. Pembina has deeper pockets than the project’s previous owners, but the market for LNG exports has not substantially changed, a potentially fatal flaw for the plan. In fact, the global LNG market is facing a supply glut, which makes buyers hesitant to sign the long-term financial agreements project backers need to get federal approval to build LNG export infrastructure.
Landowners filed a letter indicating that the market conditions that FERC originally used to reject the pipeline have not since changed. It is true that the market for LNG has not substantially changed since FERC rejected the project, but the rules may have. The Trump administration is throwing its weight behind the project, and has appointed several new members to FERC. Both of Oregon’s senators are sounding alarm bells that Trump’s public statements about the project are intended to influence FERC’s decision.
Tribes argue that the project would violate their treaty rights and landowners believe it would impinge on their property rights, so opposition to the project is growing on both sides of the aisle. Like his advocacy of the zombie-like coal industry, Trump wants to bring a fossil fuel fight to Oregon. But Oregon is ready to fight back.
Paelina DeStephano contributed research to this article.