The South Coast Development Council has released the study it commissioned, “Forecast of the Net Economic Benefits of a Proposed LNG Terminal in Coos County, Oregon.”

The study contains heady and intoxicating stuff. It speaks of thousands of jobs, millions of dollars, even the possibility of Coos Bay becoming a keystone in the move toward a “hydrogen economy” (The World, Oct. 20).

This is strong medicine, not to be consumed lightly.

If you plan to read the report, I suggest you need to do some advance preparation so as to enable yourself to properly integrate and assimilate the information presented in the report into your personal knowledge base.

Think back about what has happened in our area over the past few years.

Recall how it was pointed out to us that we had a supply of prime industrial land available on the North Spit, the advantages of a deep-sea port and a willing and available work force. The only thing holding us back from prosperity was the lack of natural gas as an energy source for prospective industrial developers. We were told that several companies, including US Gypsum, Pohang Steel, BHP Steel, Hokishen Wood Products and Project Vision Glass did not locate here because natural gas was not available.

Collectively, we reacted. We passed a bond issue to finance the construction of the Coos County pipeline that now is in place and functioning. NW Natural Gas has received the franchise to provide gas service in our area and has established a presence and installed the infrastructure needed to do so.

Thus, and it is very important to remember this fact, today NW Natural is ready, willing and able to provide natural gas service to any industry that wishes to locate in our area. This present capability is in no way dependent on LNG development and will remain in place even if the LNG proposal disappears.

If you keep this fact in mind, you will be properly amused when you read, on page 20 of the SCDC report, that the following “firms are indicative of the types of manufacturers that LNG would attract - US Gypsum, Pohang Steel, BHP Steel, Hokishen Wood Products, Project Vision Glass.” Do those names sound familiar? It appears proponents are trying to credit LNG with the capability of solving a problem that we already solved ourselves years ago with the Coos County pipeline.

LNG proponents often express concern about future gas supplies. Along this line, we should not forget what is currently going on in our back yard. Methane Energy Corporation is actively seeking to develop the capability to capture methane gas associated with the coal beds that underlie much of Coos County. If they can solve the technical and environmental problems involved, the commercial product they capture would move to market through the Coos County pipeline. As a result, Coos County would capture the additional benefits of being an energy producer, rather than only an energy transmitter, as would be the case with LNG.

Thus, the important mindset to take with you as you review the SCDC report is the realization that our potential for economic development in the foreseeable future is not dependent on the presence of a LNG facility.

This is not to say that a LNG terminal, were it to be constructed, might not have some additional positive effects on our local and regional economy. What can be said with a high degree of certainty, however, is that these additional economic benefits would not be of the magnitude portrayed in the SCDC report.

The SCDC report claims to be a forecast of the “net” economic benefits of the LNG proposal. If the positive effects of a proposal are integrated with and properly adjusted downward to account for the impact of any negative effects, then the remainder can properly be called a net benefit.

The SCDC report can most properly be called a best case scenario. It makes no attempt whatsoever to quantify or even identify the potential negative effects of the proposal, even though several readily come to mind.

For example, the security-related restrictions on bay use and access during transit of LNG tankers would most certainly have a negative impact on recreational uses with a resulting decrease in economic activity generated.

Another example would be the drastic change in the character of the area that would occur if a LNG terminal were to be constructed. Currently, about 25 percent of our local economy is supported by transfer payments, which are primarily attributable to retirees moving into our area. This 25 percent level is significantly greater than the statewide average of about 14 percent. If the presence of a LNG terminal were to diminish the inflow of new retirees into the area, and/or cause retirees already established here to move away, the impact could be surprisingly significant. It has been estimated that a single retiree household moving into an area has the same impact on the local economy as the addition of 3.4 new industrial jobs. Thus, the economic benefit of 60 new jobs brought about by the operation of a LNG terminal on the North Spit could essentially be negated if it meant the out-migration of just 18 retiree households.

Yet another example of the failure to recognize negative impacts might be the effect on property values. The SCDC report tries to put this issue to rest by comparing the effects of the planned LNG terminal with the documented effects of two existing LNG storage facilities in Oregon, one in Newport and one in Portland. It states that a review of assessors' data shows no diminution of property values in the immediate vicinity of the two storage facilities, thereby inferring that the same would hold true for the proposed LNG terminal.

Be aware that the two storage facilities currently in Oregon are “peak shaving” facilities, which take gas from existing pipelines during periods of low demand, liquefy it within the system to minimize storage space, and then regasify it within the system to use during periods of high demand. Note that these facilities handle relatively small amounts of gas in comparison to an LNG terminal, do not involve the loading, unloading or transportation of LNG by land or sea, and are an integral part of the existing pipeline distribution system. To equate the possible impacts on property values of the two types of facilities is like saying there is no difference between living next door to a full-fledged oil refinery and living across the street from a neighborhood filling station.

Not mentioned at all, and conspicuous by its absence, is any mention at all of the impacts on property values affecting all the land owners along the 230 miles of new pipeline construction associated with the LNG terminal proposal.

As you review the SCDC report, it is important to remember that it is not beyond the realm of possibility that the LNG proposal, if implemented, could have a negative overall impact on the local economy over time.

Still unclear at this time is exactly what role the SCDC report is expected to play in the decision process.

As mentioned, the SCDC report has validity as a best case scenario. If it is followed up by a comparable worst case scenario, and if the two form the boundaries of a spectrum that contains two or three reasonably probable scenarios and if the decision rationale by which a final course of action is selected is made explicit, then we could feel confident that a decision affecting the long-term well-being of our area was arrived at by a legitimate and sound planning process.

If, on the other hand, the SCDC report is viewed as the end-all analysis fully supporting moving forward with the LNG proposal, we have got major problems.

(Ron Sadler lives in North Bend.)