Pub.1 2019-2020 Issue 3

O n March 19, 2020, the Federal Energy Regulatory Commission (FERC) voted 2-1 to approve a Jordan Cove natural gas export terminal on the north spit of Coos Bay and a 230-mile Pacific Connector Gas Pipeline that would go from the bay to a gas hub near the California border. Both parts of the project would currently be built by a Canadian company called Pembina Pipeline Corpora- tion. The pipeline would carry natural gas from basins in the Rocky Mountains to Oregon for export. While the FERC approval is an important victory, it's one of many more that will be needed for the project to come to fruition. Pembina will have to overcome the following barriers: • The Department of Environmental Quality needs to issue a clean water permit to Pembina. The department has already denied a water quality certificate in 2019 for procedural reasons. It said Pembina could reapply, but the department wants to see more information about compliance with water quality standards and more certainty that some specific standards would not be violated. • A dredging permit application will need to be submitted to the Depart- ment of State Lands. One such permit application has already been submitted and subsequently withdrawn due to the department's request for more information but rejection of Permbina's extension request. • The Department of Land Conservation and Development, which has objected to the project on the grounds that it is inconsistent with the Coastal Zone Management Act, has been clear about its strong opposition, but its decision could be overturned on federal appeal by U.S. Secretary of Commerce Wilbur Ross. Pembina Pipeline Corp. has already told the department that it plans to file that federal appeal. A statement released by Governor Kate Brown the same day as the approval makes it plain that she isn’t happy about the decision (which she called “stunning” because of the ongoing COVID-19 pandemic). Governor Brown’s statement was an overreaction. This project has already been decades in the making, and the FERC approval is conditional until the company works out its differences with the applicable state departments. Pembina acquired the proj- ect from Veresen Inc. in 2017 when the two companies merged. It should be noted that Pembina recently cut capital spending in response to the decreases in oil price, and if and when the license is granted, it could theoretically be sold, should Pembina wish to do so. Although the COVID-19 virus may continue to threaten the U.S. for months to come, that’s a stalling tactic. To say that all forward movement should stop on this project until the current health crisis is over ignores the crucial role that natural gas plays in our critical infrastructure and supply chain and its fundamental role in our ability to respond to this crisis. Governor Brown says clearly in her statement that she will do everything she can to hinder anything from happening until state and local agencies have given this work the permits it needs. She has pledged herself to protect her state and her people, and she has also consulted with the state’s legal counsel. Aside from Governor Brown's concerns, the project has a number of other hurdles to overcome. If and when Pembina is able to get all necessary permits and licenses, the project needs to be economically viable. With the LNG price drops in Asia, export market fundamentals will also have to improve for the project to proceed. The project, despite strong opposition, also has strong support. Western States and Tribal Nations (WSTN) supports it, as well as many political supporters throughout the western states. How would the project benefit Oregon? • The $10 billion price tag makes it the state’s largest single construction project. There would be thousands of construction jobs. Once built, the pipeline would also need maintenance. • Jordan Cove would be the first west-coast LNG terminal. The terminal would create approximately 200 permanent jobs. • The state would get tens of millions of dollars from project fees and property taxes. • It would allow Oregon to participate in the global export market for oil and gas during the next few decades. How would the project benefit Asia? Using natural gas instead of higher-emis- sion fuels is a proven way to decrease global emissions. Regulatory Update: Jordan Cove LNG Project 26 UP DATE