*****UPDATED 12/11/16 — 11:00 a.m.*****
NEWS FROM OREGON —
By Ted Sickinger
Federal regulators on Friday said they will not reconsider their decision this spring to deny a license for the proposed Jordan Cove liquefied natural gas terminal in Coos Bay.
The Federal Energy Regulatory commission issued a decision in March denying the $7 billion project’s permit because its backers had not demonstrated a sufficient public need for the project’s 230-mile feeder pipeline to overcome the negative impact on landowners along the route. Essentially, regulators said the backers hadn’t demonstrated any demand for the terminal or pipeline, while their environmental review showed a variety of impacts on landowners.
Veresen Inc., the Calgary based energy company backing the project, quickly requested that regulators reconsider their decision, and submitted preliminary agreements with Asian utilities and the terminal operator to prove that there was indeed demand for the the terminal and pipeline capacity.
The commission issued a new order Friday denying the request for rehearing. The order said the project backers had more than ample time – three and a half years – to demonstrate there was a need for the facility, but failed to do so. They also said the backers failed to demonstrate any extraordinary circumstances that merited reopening the record.
“We’re clearly disappointed with the denial and the Veresen board is considering all options for moving forward with the project,” said Michael Hinrichs, a spokesman for Jordan Cove Energy Project. “The board remains committed to the project and believes it would provide significant economic benefits to Southern Oregon” …
… Hinrichs said backers have already spent more than $400 million on the project. But they faced serious headwinds, including a worldwide glut of liquefied natural gas …
… “Hopefully this is the final nail in the coffin and we can move on with our lives,” said Jody McCaffree, a Coos Bay resident who has led local opposition to the project. “This project was never appropriately sited, but FERC never even got into that.”
Jordan Cove’s backers could submit an entirely new application, the commission said. Alternately, they could appeal the decision to the U.S. Circuit Court of Appeals.
“This should be the end of this LNG project but we will have to remain vigilant to ensure that is the case.” said Hannah Sohl, director of Rogue Climate, one of the organizations opposing the project.
Citizens Against LNG: Jordan Cove LNG project officially dead – now onward to renewables
Jody McCaffree, executive director for Citizens Against LNG, said in an email statement to FTS: “It was good to see that FERC fully considered the negative impacts of the project on our local businesses and landowners and the fact that the Pacific Connector had not demonstrated a need for their project that outweighed those impacts. I hope this kills the poorly conceived Jordan Cove LNG project once and for all.”
McCaffree cites these key excerpts from the FERC Order Denying Rehearing as evidence of the finality of the FERC’s decision [emphasis added]:
A. The Commission Will Not Reopen the Record to Allow the Applicants to Submit New Evidence
17. We will not reopen the administrative record. The Applicants have failed to demonstrate the existence of “extraordinary circumstances” that overcome the need for finality. Prior to issuing the March 11 Order, Commission staff sent four data requests to Pacific Connector asking it to show that the public benefits of its proposed Pacific Connector Pipeline outweighed the project’s adverse impacts, consistent with the Commission’s Certificate Policy Statement. In response to each data request, Pacific Connector stated that its negotiations were “active and ongoing” and provided no certainty as to when it would receive agreements for the pipeline’s capacity. We afforded Pacific Connector ample time – over 3.5 years – to demonstrate evidence of market demand or to contract for and submit the precedent agreements with its firm shippers prior to issuing the March 11 Order
18. “[L]itigation must come to an end at some point. Hence, the general rule is that the record once closed will not be reopened.” The Commission has “an obligation to preserve the integrity of our processes, and so due diligence must be used to obtain and present evidence in a timely manner… …However, Pacific Connector failed to show any evidence of market demand for its project that would satisfy the factors listed in the Certificate Policy Statement.
19. Further, reopening the record at this late date would impose additional burdens on the parties….
B. The March 11 Order Properly Denied Pacific Connector’s Certificate Application Under the Certificate Policy Statement
27. The March 11 Order followed the same rationale. As stated above, Pacific Connector failed to submit any evidence of need for natural gas transmission by their specific project. Further, at the time of the March 11 Order’s issuance, Pacific Connector had obtained easements for only 5 percent and 3 percent, respectively, of its necessary permanent and construction right of way, in the face of protests from landowners contending that the pipeline would have negative economic impacts to their interests, such as land devaluation, loss of tax revenue, and economic harm to business operations (e.g., oyster and timber harvesting and farming). The Certificate Policy Statement states that “a project built on speculation (whether or not it will be used by affiliated shippers) will usually require more justification than a project built for a specific new market when balanced against the impact on the affected interests.” Pacific Connector failed to justify its project.
29. … The purpose of the Certificate Policy Statement is to establish criteria for determining whether there is a need for a proposed project and whether the proposed project will serve the public interest. This is essentially an economic test. Only when the benefits outweigh the adverse effects on economic interests will the Commission proceed to consider other interests, including environmental impact …
31. … Therefore, we affirm our finding in the March 11 Order that we will not condition the certificate because Pacific Connector would be able to proceed with eminent domain proceedings in what we find to be the absence of a demonstrated need for the pipeline …
C. The March 11 Order Properly Denied Jordan Cove’s NGA Section 3 Application
The Commission orders:
(A) Jordan Cove Energy Project, L.P’s and Pacific Connector Gas Pipeline, LP’s request to reopen the record is denied.
(B) Jordan Cove Energy Project, L.P’s, Pacific Connector Gas Pipeline, LP’s, the State of Wyoming’s, and Wyoming Pipeline Authority’s requests for rehearing are denied.
(C) Jordan Cove Energy Project, L.P’s and Pacific Connector Gas Pipeline, LP’s request for stay of the March 11 Order is dismissed as moot.
By the Commission.
Coos Bay World: FERC denies Jordan Cove re-hearing
The letter, signed by FERC Secretary Kimberly D. Bose, stated that the April 8 request for re-consideration, filed by the Jordan Cove Energy Project and Pacific Connector Gas Pipeline, and joined by the Wyoming Pipeline Authority and the State of Wyoming, was denied because the petitioners “failed to demonstrate the existence of ‘extraordinary circumstances’ that overcome the need for finality” …
… The FERC decision came just days after Veresen Inc., the Calgary, Alberta-based company behind Jordan Cove, released a statement that it approved a $30 million 2017 project budget for the pipeline.
In a prepared statement, Veresen President Don Althoff wrote, “Veresen remains committed to this important energy infrastructure project. We are very disappointed by FERC’s decision, especially in light of the significant progress that has been made in demonstrating market support for the project and the strong showing of public support for the project. We continue to firmly believe this project will provide significant economic benefit to Oregon, while ensuring responsible environmental stewardship and stakeholder engagement.”
Jordan Cove spokesman Michael Hinrichs said Friday that, “We are disappointed with (FERC) upholding the denial.”
Hinrich said the Veresen board is looking “at every option available,” and would announce its response at a later date.
He said that could include taking the matter to the U.S. Secretary of Commerce, re-filing the project or other options “that come to mind right now.”
Though President-elect Donald Trump has staked out a staunchly pro-development policy, and has spoken favorably of other pipeline projects, FERC is an independent agency made up of up to five commissioners. However, there are two vacancies and all three sitting commissioners have five-year terms that will expire during Trump’s term of office, beginning in 2017.
“I don’t think that I would speculate to say FERC would be any different come Jan. 20, but we’ll just have to wait and see,” Hinrichs said.
Hannah Sohl, director of nonprofit group Rogue Climate, wrote in a statement that “this order puts the public interest over the special interests of large out-of-state corporations interested only in short-term profit at our expense. Our state should be focused on creating good-paying jobs in improving energy efficiency and the expanding clean energy industry, such as solar power, not on new fossil fuel projects that hurt us all. This should be the end of this LNG project but we will have to remain vigilant to ensure that is the case.”
The News Review/Roseburg, OR: FERC denies rehearing on Jordan Cove LNG pipeline
… Stacey McLaughlin, whose land in Round Prairie lies along the proposed pipeline route, was overjoyed by the news.
“When I received the news today, I was ecstatic to hear that this project is forever and finally denied,” she said. “This company has put us through this hell for more than a decade, and I feel like they have been less than forthcoming with their shareholders about the market conditions and trying to manufacture an economic reality that does not exist.”
NEWS FROM COLORADO —
In a statement to The Daily Sentinel, Senator Cory Gardner, who works for the federal government, deliberately misrepresented the role of the “federal government” in the FERC’s denial for a rehearing.
Federal regulators’ rejection of the Jordan Cove project defied understanding, U.S. Sen. Cory Gardner, R-Colo., said …
… “This is nothing more than a misguided attempt to stop exporting LNG completely, a commonsense energy resource, out of the Rockies to our allies in the West,” Gardner said in a statement.
“I wholeheartedly disagree with FERC’s decision, and I will continue to work tirelessly to make sure that the federal government plays no role in deciding what types of energy are suitable for the marketplace. There is no sensible explanation for denying opportunities for economic growth and job creation.”
Natural gas producers in northwest Colorado see the Jordan Cove project as a way of steadying the boom-bust nature of the energy economy by selling gas at steady prices. The project has garnered the support of Republicans and Democrats in Colorado, including Gardner and U.S. Rep. Scott Tipton on the GOP side and Gov. John Hickenlooper and U.S. Sen. Michael Bennet, both Democrats …
Peggy at From the Styx says:
The Senator and the rest of the fracking fanatics need to actually read the FERC’s order. It doesn’t say anything about the suitability of LNG in the marketplace. The order reaffirms the commissioners’ original denial last March. That order and this one are all about a natural gas pipeline.
In the original order, the FERC applied its “Certificate Policy Statement” in which “the Commission balances the public benefits against the potential adverse consequences.” In this case, the FERC focused primarily on the impacts of the Pacific Connector Pipeline over the impacts of the natural gas terminal. The Pacific Connector Pipeline would cross over 157 miles of privately owned lands. A majority of the approximately 630 affected landowners have lobbied against the project for more than a decade, citing various negative economic and environmental consequences.
The operative word is “need.” There is no need for a pipeline to service an LNG market that doesn’t exist.
The problem with Ludlam, Gardner, Bennet, Tipton, Hickenlooper and the fracking fanatics is that they were duped. Jordan Cove LNG has been conning them all along. Jordan Cove LNG owns fracking gathering lines and processing facilities up in Canada. Why would they export Colorado’s gas when they have their own to export? Jordan Cove LNG was using the fracking fanatics in Colorado and Wyoming to try and get their U.S. permits and certifications.
David Ludlam, executive director of the West Slope Colorado Oil and Gas Association, pitched a hissy fit in The Daily Sentinel:
… “This is last-minute retribution by a disgraceful and despicable administration whose shenanigans to stop infrastructure projects are once again happening on the back of rural Americans,” association Executive Director David Ludlam said.
Both of Colorado’s U.S. senators, Michael Bennet, a Democrat, and Cory Gardner, a Republican, have “said all along that they will stop at nothing in this worst-case scenario and we’re going to be turning to them,” Ludlam said.
President-elect Donald Trump also has committed to infrastructure projects, Ludlam said.
“We expect that President-elect Trump will get this fixed in short order,” Ludlam said …
Peggy Tibbetts at From the Styx says:
This is a HUGE victory!
And, as Jody McCaffree pointed out above, the ruling is ironclad. As it stands, it cannot be “fixed in short order.” Veresen will need to start all over and re-apply, a lengthy and costly process which will subject them to another series of environmental and economic assessments. While it’s possible that a Trump Administration could replace the current three commissioners that, too, will not happen “in short order.”
Then there’s the no small matter of the bloated, glutted worldwide LNG market. On Wednesday, LNG Industry reported: “A period of uncertainty faces the global LNG market.” And that was before the FERC decision.
What does the end of Jordan Cove mean for Colorado?
It means the export market for liquefied natural gas (LNG) from the Piceance just evaporated. It means the competition for oil & gas between Colorado’s Piceance and the DJ Basin just increased exponentially. Instead of Piceance gas production being slated for LNG conversion and export in Oregon, operators in both basins will be competing in the same stagnant market. Jordan Cove will not give the industry the shot in the arm they were banking on.
The FERC’s decision — and the emphatic finality of it — punctuates the weak demand for LNG and exposes the financial risks for pipeline companies at the same time the safety of pipelines is being called into question in the wake of increasing incidents of explosions and leaks across the U.S. The pressure from legal scrutiny and financial woes already straining operators across the state will continue to intensify. The aftershocks of this particular earthquake will endure and will ensure that the natural gas market will remain glutted and demand will remain low for the foreseeable future.
For Coloradans that means fewer drilling rigs. Some proposed drilling plans, even those already permitted, will be shelved next year. What remains to be seen is which ones and how many.
The people of Colorado owe a debt of gratitude to the good people of Oregon. Citizens from all walks of life and political persuasions came together and fought for more than 10 long years to protect their waters, their properties and their precious environment. There is one word to describe their reaction — relief. We share the feeling.
Jordan Cove has united people in Oregon and Colorado. We cherish this bond and look forward to strengthening it in our efforts to promote renewables and in our ongoing battle to slow climate change.
We honor the sacrifices endured by the good people in Oregon and we thank them for their service.
Congratulations Oregon — you are our heroes!
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