Denied: Proposed LNG Export and Gas Pipeline in Oregon Rejected by FERC

"In a decision that stunned supporters and critics alike, federal regulators Friday [March 11] rejected plans for a massive liquefied natural gas [LNG] export terminal in Coos Bay, saying applicants had not demonstrated any need for the facility," writes Ted Sickinger, a business investigative reporter for The Oregonian whose coverage includes energy.

Last September, the Federal Energy Regulatory Commission (FERC), "an independent agency that regulates the interstate transmission of electricity, natural gas, and oil," approved the final environmental impact statement for the Jordan Cove LNG and Pacific Connector [Gas Pipeline Project].

Reason for denial of application

Similar to a major judicial setback encountered by Calgary-based TransCanada Corp. in its application to build its Keystone XL pipeline through Nebraska, it was not environmentalists but landowners that frustrated energy developer Veresen, Inc., also based in Calgary, Alberta.

"Specifically, the FERC stated that the public benefits of Pacific Connector do not outweigh the potential for adverse impacts on landowners and communities," notes Veresen's press release. "Jordan Cove LNG and Pacific Connector will file a request for a rehearing of the decision."

Sickinger clarified the reason for FERC's rejection:

Regulators said they were required to balance the need for any project against any adverse impacts it would have on landowners or the environment. The need for Jordan Cove was based entirely on demand for natural gas from customers in Asia, and with those markets in upheaval, Jordan Cove's backers have yet to demonstrate that the demand exists.

Sickinger videos his interview with a rancher, with magnificent views of his property, who had objected to the pipeline, the use of eminent domain to build on his land, and the fact that the natural gas would be exported rather than used domestically.

The [Federal Energy Regulatory] commissioners noted the landowners' concerns with land devaluation, loss of revenue and harm to business operations, including timber, agriculture and oyster harvesting.

"Because the record does not support a finding that the public benefits of the Pacific Connector Pipeline outweigh the adverse effects on landowners, we deny Pacific Connector's request...to construct and operate the pipeline," the commission's order said. 

Without a pipeline, it was impossible to demonstrate any public benefit to the LNG terminal, so the commission denied that application. too.  

Opponents of the pipeline and export facility, including the local Citizens Against LNG were delighted with the outcome, but were warned that Veresen, Inc and its pipeline collaborator, the Williams Partners "are free to reapply in the future, and the commission would consider their plans if they can demonstrate 'a market need' for their product," writes Sickinger.