Published:Saturday, February 16, 2008 8:00 AM PST
Serving the South Coast of Oregon

Kulongoski to FERC: No permits until alternatives to LNG studied
Saturday, February 16, 2008 8:00 AM PST

PORTLAND (AP) — Gov. Ted Kulongoski told federal regulators they must study all alternatives to supplying natural gas to the region before moving forward with any proposals for a liquefied natural gas terminal in Oregon.

In a letter sent Thursday to the Federal Energy Regulatory Commission, Kulongoski said he has asked the state attorney general to examine Oregon’s legal authority to refuse state permits for the projects until FERC complies with his request.

Kulongoski also told FERC Chairman Joseph Kelliher that he had asked Oregon’s congressional delegation to push for legislation that would wrest back state control for licensing LNG facilities. State authority was pre-empted by the federal government as part of the Energy Policy Act of 2005.

Rep. Peter DeFazio, D-Ore., who opposed taking away state control in energy matters, is co-sponsor of HB 2042, that would repeal that section of the energy act.

“I think (Kulongoski’s letter) is a very thoughtful letter,” he said Friday. “I plan to write a letter to other members of the Oregon delegation to support this legislation.”

The governor’s posture, outlined Thursday in an interview with The Oregonian, marks a change in tone. He recently told a panel of editors that Oregon could benefit from the addition of liquefied natural gas to its energy portfolio, saying it would reduce the state’s dependence on other sources of energy, especially coal and hydropower. But he has called for a more detailed analysis of potential environmental impacts, including the effect on fish and wildlife habitat, and water quality.

LNG proposals have stirred controversy in Oregon, with some welcoming the jobs and taxes they would generate and other residents scorning the potential environmental impact and likely use of eminent domain to seize farmland, vineyards and forest for hundreds of miles of pipeline.

Energy companies have proposed building three LNG terminals in the state: one in Coos Bay and two on the Columbia River.

The terminal application in Coos Bay, proposed by Jordan Cove Energy Project, is currently being reviewed by FERC staff. A draft environmental impact statement is expected this winter. Meanwhile, a land use application was approved by Coos County’s Board of Commissioners in December. The application has been appealed to the Land Use Board of Appeals.

In his letter to the FERC, Kulongoski noted that the Oregon Department of Energy has determined there is only demand for, at most, one LNG terminal in Oregon.

“The proposals are requiring local governments ... to devote scarce resources from other pressing problems to evaluate projects that in all likelihood may never be built,” he said.

The terminal proposed at Bradwood Landing is the furthest along in the FERC process, having already had a draft EIS produced in August 2007. The third terminal, Oregon LNG, is scheduled to file its application with the FERC in April.

The terminals would accept imports of supercooled natural gas from abroad, reheat the liquid into a gas, and then ship it to West Coast markets through one of four proposed pipelines.

Two other companies have proposed building pipelines to ship domestic natural gas from the Wyoming Rockies to southern Oregon.

Kulongoski said in his letter that he wasn’t “unalterably opposed” to LNG being part of Oregon’s energy mix. But he said FERC’s “approach to the licensing of plants and pipelines has created a crisis of confidence with Oregonians.”

Opponents of the projects cheered Kulongoski’s moves.

— Staff Writer Alexander Rich contributed to this story.


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