Economy doesn’t worry LNG developers

By Alexander Rich, Staff Writer
Saturday, March 07, 2009 | 17 comment(s)

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No one has paid to use Jordan Cove Energy Project’s proposed liquefied natural gas terminal on Coos Bay’s North Spit. It hasn’t gotten the go-ahead from federal officials. And the federal government thinks Americans will need less foreign gas as domestic suppliers ramp up production.

But the LNG terminal’s developers remain confident their project is needed, even as the economy sours.

There are six shippers, including utility and industrial companies, that have signed binding contracts to use the pipeline connecting the terminal to a junction near Malin. And Jordan Cove officials are confident energy companies will come calling once they get their permits lined up.

“We are getting no signals from the parties that would effectively say ‘We need them,’ that are contrary to what they said a year ago,” said Bob Braddock, the company’s project manager. “They still need them.”

Officials in the Oregon Department of Energy agree there will be a need for more natural gas in the coming years. They contend, however, that supplies can come from domestic sources in the Rocky Mountains.

Lou Torres, a spokesman for the department, said Gov. Ted Kulongoski ordered a study about the state’s natural gas needs last year. The results don’t necessarily say LNG is a bad thing, but that it isn’t the best solution for Oregon.

“We felt the better option, and the less costly option, is to build a pipeline from the Rockies,” he said.

That thinking is in keeping with federal energy forecasts.

Last year, the U.S. Energy Information Administration predicted foreign natural gas would account for 14 percent of domestic consumption. This year, the agency’s experts have revised the estimate to only 3 percent.

This is due in part because companies are pumping out more natural gas in this country, said EIA energy specialist John Cogan. LNG imports are expected to increase by about a trillion cubic feet through 2018 to compensate for a decrease in Canadian exports of natural gas. But after that, the EIA projects LNG imports to decrease to a little more than 800 billion cubic feet a year.

That may seem like a lot, but there are seven LNG terminals under construction in North America. In addition, 14 projects have won Federal Energy Regulatory Commission approval but haven’t started construction, including one on the Columbia River.

Braddock doesn’t disagree with the government’s estimates, but he still thinks there will be a need for the LNG terminal on Coos Bay’s North Spit.

“We think it will be well utilized because of its location,” he said.

There aren’t any LNG terminals on the West Coast and the only one with FERC approval, on the Columbia River at Bradwood Landing, is having problems getting land-use permits.

Coos Bay makes sense, Braddock said, because the terminal would be close to storage facilities in the Sacramento River Valley in California. Access to those facilities would allow energy companies to purchase and ship LNG during the non-peak season when it’s cheaper.

The demand for natural gas in other parts of the country may decline, but Braddock said there are energy companies that still want access to a terminal on the West Coast, even in light of declining demands in the near term.

Part of the reason the current economic crisis hasn’t concerned energy officials is because of the project’s timeline. Terminal construction wouldn’t begin until next spring at the earliest, and won’t start operating for at least five years. The EIA expects natural gas consumption — as opposed to LNG imports — to decrease over the coming year by about 600 billion cubic feet. States on the West Coast would account for nearly half of that total.

Afterward, demand would slowly increase and it is that movement that keeps suppliers interested in Jordan Cove’s project.

“What they are concerned about is five years from now. ... Then what does it look 25 years from now,” said Braddock.

The pipeline operator, Williams, said shippers have committed to transporting 1.4 billion cubic feet of natural gas per day. Williams spokeswoman Michele Swaner said the agreements, signed in February 2007, aren’t the same as a contract, but it demonstrates there is interest in the line.



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Dave from NB wrote on Mar 24, 2009 10:32 AM:

Avoided Jane's facts as usual everyman, along with your MANY posting ID's in here. Same ole everyman, either avoid the obvious facts on this Lng SCAM or charge the subject! Keep up the good work Jody, Jane and the other informed people on this Lng SCAM that Oregon doesn't need or want!

everyman wrote on Mar 20, 2009 12:57 PM:

There has never been an explosion/accident related to an LNG tanker...ever.

Comparing the risk of explosion from a newly built LNG pipeline to that of a pipeline built 50 years ago is like comparing surgery from the 50's to surgery now...there has been so much technological advancement and legal regulation that the risks are incredibly reduced...maybe a thousandfold.

Stop cutting and pasting the same old argument (under a whole bunch of different names, BTW) and face the facts...There are risks, and they are manageable.

Jane wrote on Mar 16, 2009 8:25 AM:

Everyman,

Better take a business course on supply & demand economics, because that "Iran signs 3.2 billion dollar gas deal with China" is BAD news because that means LNG prices are going to INCREASE again for the rest of the WORLD including the USA! LNG is already OVER 2 times more expensive then Oregon citizens are paying right now! Thanks for proving my point that this LNG SCAM is not needed or wanted in the USA or Oregon due to it being to expensive & increasing our dependence on foreign Hostile countries like Russia, Iran, Algeria for our future energy needs that most likely lead to some kind of embargo like OPEC did to the USA in the 1970's!

everyman wrote on Mar 15, 2009 2:24 PM:

BREAKING NEWS: Iran signs 3.2 billion dollar gas deal with China...

yes, Jane, lets just sit by twiddling our thumbs while our enemies synergize their resources to obliterate us...

BTW, we have sanctions against Iran right now...did you know that? That means we won't be buying anything from them anytime soon...

everyman wrote on Mar 14, 2009 10:33 AM:

Speaking of simple...you need a simple electronic breath mint, Jane...your e-breath smells like communism.

Jane, I only post as everyman...always have, always will.

IF it is 2x more expensive when the terminal opens (and really, who cares how much it costs? It is a BUSINESS...let them suffer the slings and arrows of outrageous fortune) then no one in their right mind would buy it, would they. And then the terminal would shut down...your dream come true. So why the fuss?

Also, you have no idea what develops international relations, do you? The blackmail (it is one word, you know. What you described is a black envelope you get in your mailbox) would end all the US support we supply those countries in aid. Except Iran...but I doubt we would buy anything from them anyways. You really have no idea what you are talking about, do you.

Keep screaming, Jane...keep screaming.

Jane wrote on Mar 13, 2009 6:20 PM:

I'll try to make it simple for you to understand Everyman:

When you are D E P E N D E N T
on foreign countries especially H O S T I L E countries like Russia, Iran, Algeria, etc., then they can at anytime black mail/embrago & hold back/refuse to sell to you or raise prices! For example, OPEC did an embrago/refused to sell the USA some oil in the 1970's & prices drastically I N C R E A S E D to all USA citizens placing a extreme H A R D S H I P on them! Besides that obvious issue, just the F A C T that LNG is O V E R 2 T I M E S more expensive then the natural gas used today by Oregon citizens, thus anyone would be a F O O L to want to pay M O R E money per month for natural gas! I know everyone gets it besides you & your other IQ's posting in here, because it's pretty basic that this California LNG SCAM is N O T good for the majority of Oregon & USA citizens!

everyman wrote on Mar 13, 2009 3:04 PM:

At least I can type...

Dear Jane, exactly which "HUGH prices increases" are you talking about? It really is hard to take your points seriously when they are typed as incorrectly as they are.

Also...you talk about the open market as if you cared. Why? Coffe at Starbucks is expensive, but I don't hear you screaming that S-bux is a BURN ZONE (You are more likely to get burned there than within the hazard area of an LNG tanker)or 2X MORE EXPENSIVE (more than 2x, if we are honest) than other forms of coffee.

Excuse me, Jane. Do you mind if I squeeze by? You need to get out of the road...you are blocking the path.

Ron wrote on Mar 10, 2009 9:04 AM:

The World's coverage of the LNG issue nearly completely discounts public sentiment - and its paid readership will begin to take retribution if The World doesn't even out its coverage. That is a fact.

Has anyone at The World ever actually seen an LNG ship up close? From, say, less than 2 miles or so? Imagining one of those carriers coming into Coos Bay, past Charleston, then Empire - Across from the Airport - or seen from the Safeway parking lot..... Really, just imagine it. Then research it and write about it as if you were an even handed member of this community - rather than a lacky of the LNG gang.

This issue has nothing at all to do with employment or growth, nothing at all.

Jane wrote on Mar 9, 2009 11:27 AM:

How pathetic,

These LNG SCAM con men are funny really since:
A) LNG is 2 TIMES more expensive then natural gas used today by Oregon citizens.
B) LNG increases the USA dependence on foreign countries for the outdated air polluting fossel fuel.
C) LNG comes from unfriendly countries like Russia, Iran, etc. that will black mail the USA in the future that will cause HUGH prices increases that will put a hardship on all USA citizens, just as OPEC did in the 1970's.

Add it up, how anyone can say today's economics won't play a BIG part in tomorrow's market is a con man or just plain ignorant! Open market prices decides profitability & they continue to go UP & demand inside the USA continues to decline, thus you have to be a fool to say that is a good profitable situation! Give it up con man Bob Braddock, Oregon doesn't need or want you PERIOD!

Just Me wrote on Mar 9, 2009 8:40 AM:

To Everyman: I was wondering where you have been, I have really missed reading your muses! ROFLMAO!!

Thomas wrote on Mar 9, 2009 7:23 AM:

Frankly EVERYMAN and all your other tags, it is in fact you whose posts are tediously predicable.

LNG is a dead horse at Coos Bay now anyway, so I'll abstain further from beating it ......... carry on Dude.

Common Sense wrote on Mar 8, 2009 10:29 AM:

Nothin like another story to add to the list of stories told by con man Bob Braddock of his California LNG SCAM!

Just a "few" of the MANY stories told by him:

1) His structure at Jordon Cove will withstand a 9.3 Earthquake.

2) His 55ft sand barrier at Jordon Cove will withstand a 100ft Tsunami wave.

3) His Lng is needed, yet it is OVER 2X more expensive then the gas used today by Oregon citizens & it comes from hostile countries like Russia, Iran, Algeria, etc.

4) Claimed a couple of years ago Lng is clean, but now admits it is a air polluter.

5) Claimed a couple of years ago this will produce HUNDREDS of local jobs, then announced ALL construction work will be proformed by people outside of Oregon. No local will qualify for any of the ONLY 30-50 full time jobs created due to experience & education requirements also.

Bottomline: Wish I received a $100 for every story Bob has told to this area, because I would be a millionaire already!

Nan wrote on Mar 8, 2009 9:30 AM:

It's incredible that a small town is defenseless when a large and well lawyered company decides to muscle in. They just wear the system down.

Small towns need more power over their own destinies as communities. Else they all stand to be overrun by companies who aren't allowed to locate in California itself.

This thing shouldn't be over by a long shot. Local politicians who line up behind these conglomerates need to be pushed out of office as a routine matter of course. Future candidates need to know the risk of turning over our communities to entities who do not have our local interests in mind at all.

Interesting wrote on Mar 7, 2009 9:16 PM:

Russia has just completed a new LNG plant and sold the gas to China. The two countries have long term agreements regarding future LNG development, recognizing the tremendous potential for this energy. One can only speculate as to the true motives of those who oppose LNG here in Oregon.

everyman wrote on Mar 7, 2009 8:46 PM:

Let me guess...here comes Jane, Common sense, and the other screamers with the "What don't you understands" and the yelling (SCAM, FORIEGNERS, BURN ZONE, LAND-STEALING, ETC.).

Like clockwork they will roll out the same, tired cut-and-paste arguments.

They won't give facts. They will give fear. Reader beware.

RB wrote on Mar 7, 2009 4:59 PM:

Did all you readers catch that? Quote: "Coos Bay makes sense, Braddock said, because the terminal would be close to storage facilities in the Sacramento River Valley in California"

Yep, yessir, closer than say Oakland, or wherever in San Francisco Bay Area where most of this gas is destined to go. The Californians simply want those awful ships full of LNG to dock in Oregon, that's all. It just not so much to ask, is it?

Yea, yea, oh yea. We get to take the risk for products whose vast majority will be consumed in clean and safe Northern California. We ought to quit complaining. Let's just sit here and take it on the chin when California Lawyers threaten us too much.

Ain't this just great!!

Kathe wrote on Mar 7, 2009 9:23 AM:

A better heading for this article would have been Bob Braddock's Bull Bamboozles Brilliantly. Why won't the World, a supporter of LNG through their statements as part of SCDC, report all of the facts and question the statements they know to be misleading?


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