For onlookers watching the ongoing development of a proposed natural gas terminal in Coos Bay, Ore., it seemed a puzzling business strategy. Why would energy companies want to spend billions of dollars building a natural gas terminal and pipeline to import foreign gas, when the domestic market was about to blow up?
This September, the head-scratching plan suddenly made sense. After getting the go-ahead from the Federal Energy Regulatory Commission for a liquefied natural gas import facility in 2009, the Jordan Cove Energy Project switched tack and applied for approval to export gas from the recently opened Ruby Pipeline to Asian markets, where prices are three times higher.
Recently, Jordan Cove won approval from the Department of Energy for a 30-year export license, even as the Oregon Department of Justice filed a motion with FERC the week before requesting that its 2009 approval be rescinded, considering the terminal's new purpose. Under the Natural Gas Act, FERC must assure that the public interest benefits of a project outweigh its impacts. The Oregon DOJ wrote that FERC should require a new application for export and "make its public interest determination based on the stated benefits of export versus the adverse impacts to landowners, health and safety, the environment, the expected increase in the price of domestic natural gas, impacts on the economy, impacts on the country's energy independence, national security, and any other adverse impacts."
Staunch local opponents think an export terminal was always part of the plan. "It's difficult to believe the world's largest gas companies didn't know what was going on with the gas market, that they've made a catastrophic decision to import massive amounts of gas while the market demanded the opposite," Brett VandenHeuvel, executive director of Columbia Riverkeeper, told the Oregonian. As recently as March, Bob Braddock, project manager of Jordan Cove called export "a stupid idea," before changing his mind.
Both of Oregon's US senators are against the project. Opponents' concerns go beyond the substantial environmental impacts of the connecting pipeline (logging hundreds of acres of old growth forest, crossing numerous watersheds and drinking water sources) and the terminal (dredging Coos Bay), as well as the public health threats of explosive natural gas leaks at the terminal. The environmental impacts of increased production for the global market could also further exacerbate mounting concerns about gas drilling's impact on groundwater.
But local businesses are keen on the multi-billion dollar project and its promise to spur the local economy. As the Oregonian reports, the public interest in the pipeline and export facility includes jobs, tax revenue, and improved gas supply to southern Oregon. Substantial hoops remain before the project can move ahead, including approval from multiple federal agencies.
In November, Oregon Sen. Ron Wyden, D, testified at the Senate Energy and Natural Resources Committee against the project. As he told The Oregonian, "I am already on record opposing the export of natural gas from Alaska. I have the same concerns today that exporting natural gas will benefit gas companies at the expense of the American consumer."
This story originally appeared in the Dec. 12, 2011 issue of High Country News (hcn.org).