Pembina: Jordan Cove prospects 'sadly' uncertain
The Canadian company proposing a natural gas pipeline and export facility in Southern Oregon has downgraded the financial value of the project after announcing it can’t predict when it might be built.
Pembina reported a $1.6 billion downgrade for the Southern Oregon project, known as Jordan Cove, plus two other energy projects.
“We believe the time for these projects may come; however, we can sadly no longer predict with certainty when that time will be and hence were compelled to reflect their impairments in our 2020 financial statements through a non-cash charge,” Pembina said recently in a press release about its fourth quarter and 2020 financial results.
The company reported a $1.2 billion loss for the quarter and a $316 million loss for 2020.
Pembina said it made the accounting change about Jordan Cove’s value in light of “current regulatory and political uncertainty.”
The company wants to build a 229-mile underground pipeline through Klamath, Jackson, Douglas and Coos counties to a proposed export terminal near Coos Bay. Canadian and American natural gas would ship overseas to Asian markets.
Pembina has faced a series of regulatory setbacks, including the Oregon Department of Environmental Quality’s denial of a Clean Water Act permit for the project.
Allie Rosenbluth of Rogue Climate said there is no viable path forward for the project and Pembina should throw in the towel on a proposal that has faced years of opposition.
She said opponents were excited to see Pembina’s announcement that the project’s future is uncertain.
“It’s the result of so many wins we’ve seen in the last year,” Rosenbluth said of regulatory setbacks for the project. “The community will continue to challenge it until it is truly canceled.”
Opponents say the project would damage rivers and streams, cause pollution, contribute to climate change by promoting the burning of fossil fuels, and intrude on the rights of landowners along the proposed pipeline route.
Pembina has argued the $10 billion project would pump money into Oregon’s economy, and claims that shipping more natural gas to Asia would reduce reliance on coal, which produces more greenhouse gas emissions than natural gas. The company says it has secured agreements to use land from most property owners along the majority of the route.
In the information Pembina posted about its financial condition in late February, the company said it entered 2020 with a great deal of momentum, was successfully executing its strategy to access global markets and had billions of dollars of projects underway.
When the COVID-19 pandemic hit, demand and prices for energy fell. Pembina said it responded by permanently reducing its operating and administrative costs by $100 million and reducing its capital investments by $1 billion.
“In 2020, Pembina proved once again that we are resilient, agile and capable of safely and reliably delivering services which are vital to the world,” the company said in the statement.
With the economy recovering in 2021, Pembina said commodity prices are rising and more gas is moving through its existing pipelines.
“We anticipate 2021 to be a turnaround year with a return to a more traditional growth trajectory in 2022,” the company said.
Reach Mail Tribune reporter Vickie Aldous at 541-776-4486 or firstname.lastname@example.org. Follow her on Twitter @VickieAldous.