Federal regulators uphold approval of Jordan Cove project
Federal regulators on Thursday denied requests from the state of Oregon, affected landowners, tribal, environmental and fisheries groups to reconsider its March approval of the proposed Jordan Cove liquefied natural gas export terminal in Coos Bay and its 230-mile feeder pipeline.
The state had objected to the Federal Energy Regulatory Commission’s original decision to conditionally approve the project before it received required state permits. Those include its water quality certification, dredging permit and a determination that the project is in line with state land use laws — none of which appear to be forthcoming.
In a news conference after FERC’s meeting Thursday, Chair Neil Chatterjee reiterated a statement he made after the March approval.
“I want to be clear that a project cannot begin construction until all required permits have been received,” he said.
Chatterjee also said the project’s backer, Pembina Pipeline Corp., had eminent domain authority today to condemn private property for its pipeline, called the Pacific Connector. But he said no construction on the pipeline or LNG facility, including land clearing, can take place until the company has received all necessary permits.
That leaves Pembina in a standoff with Oregon, but with a longshot strategy to end-run state regulators.
After the March decision, Gov. Kate Brown issued her first challenge to the project in her five years in office. She said she was stunned that the commission was issuing a decision during the ongoing COVID-19 crisis, and she was ready to challenge it legally.
“I want to reiterate that I will not stand for any attempt to ignore Oregon’s authority to protect public safety, health, and the environment,” she said at the time. “I have asked the state’s lawyers to consider all appropriate legal action to assure that Oregon permitting processes will be followed.”
She also said that until the project received every required permit from state and local agencies, she would prevent the company from taking early action on condemning private property or clearing land.
Oregon’s Department of Environmental Quality has already denied the project’s water quality certification. The Department of Land Conservation and Development, meanwhile, has decided the project would have significant adverse impacts on the state’s scenic and aesthetic resources, endangered species, critical habitat, fisheries and commercial shipping. It ruled in February that the project wasn’t consistent with the state’s coastal zone land use laws.
Meanwhile Pembina withdrew its application for a dredging permit when the Department of State Lands indicated that it was about to reject that application, too. Pembina also needs the department to grant easements to use state land and waterways to build the gas liquefaction terminal, shipping berth and pipeline. Those are unlikely to be granted given the agency’s stance on the dredging permit. And Pembina can’t use the eminent domain authority that comes with its FERC approval against the state, only private property owners.
Debate over the controversial project has been intense in Oregon since it was first proposed as a gas import facility in 2005. Boosters tout the $10 billion project’s potential employment and property tax impacts in an area of the state that has lagged economically since the early 1980s. Opponents call it a potential environmental, public safety and property rights disaster.
Pembina hasn’t packed up its tent altogether. But it did recently close its office in Coos Bay, and for the time being, is pursuing a strategy that seems sure to prompt a legal response from Oregon. It has asked the U.S. Department of Commerce to overrule Oregon’s decision that the project isn’t consistent with state land use laws. And it has asked FERC to waive a requirement under the Natural Gas Act that it obtain a water quality certification from the state, arguing that the state failed to make a timely decision on that permit.
Brown’s threat to sue is not an empty one. In 2009, the state appealed FERC’s approval of the proposed Bradwood Landing gas import terminal on the Columbia River to the U.S. Court of Appeals. And in 2010, it appealed FERC’s decision to approve Jordan Cove as a gas import terminal. Both suits were based on the fact that FERC issued its permit before the state had approved necessary permits, and in the face of significant adverse environmental impacts identified by state agencies.
Bradwood Landing’s backers eventually abandoned the project in the face of stiff state opposition. And Jordan Cove, which Pembina acquired in a 2017 merger, withdrew its application to build a gas import terminal due to the fracking boom in the United States, and subsequently resubmitted an application to build a gas export facility.
Aside from its permitting problems, Pembina announced a major layoff in late April amid a severe downturn in oil and gas markets. Moreover, current prices for liquefied natural gas landing in Asia are too low to make the project economically viable, and the company has been unable to demonstrate any demand for the project with binding commitments from potential customers.
The public need and demand for the project is supposed to be a primary consideration in FERC’s licensing decision. But the commission decided that the deal Pembina’s Pacific Connector Pipeline company struck with the Jordan Cove Energy Project, also owned by Pembina, to buy all the LNG terminal’s capacity — essentially a round trip deal with itself — was sufficient to demonstrate need for the project.
FERC’s decision denying a rehearing wasn’t unanimous. Commissioner Richard Glick, the sole Democrat on the ostensibly non-partisan commission, raised climate and private property concerns, and questioned whether the project would ever be built.
Glick sent out a tweet to that effect Thursday morning.
“On #JordanCove #LNG: @FERC’s shoot 1st & ask questions later attitude is problematic,” he wrote. “Losing your land to Govt condemnation is never easy — but imagine if you were told you must leave to clear the way for a project that most likely will never be built.”