By Greg Hibbard, Energy Law Fellow
At the end of August, the Oregon Department of Energy (ODOE) placed another hurdle in
the way of the Jordan Cove Liquefied Natural
Gas Project (Project). For those familiar with the issue, it may come as a
surprise that the Project still has legs. The process for the Project began in
2004 and seemingly reached a failed conclusion in 2016 when the Federal Energy
Regulatory Commission (FERC) refused to approve the requisite permits. However,
the Project was revived after the election of President Trump. Within two
months of the election, the primary corporate backer of the Project, Pembina
Pipeline Corporation, filed a new application with FERC. Despite the recent
resurgence, substantial obstacles still stand in the way before the project can
come to fruition. Due to Pembina’s persistence and Oregon’s desire to be a leader
in the green energy movement, this may become a hot issue in the upcoming race
for Oregon governor.
|Governor Kate Brown|
As a quick overview, the proposed Jordan Cove LNG project would construct a 229-mile pipeline from the city of Malin, Oregon to Jordan Cove in Coos Bay as a part of an overall scheme to establish an export terminal that would ship liquefied natural gas (LNG) overseas. The project would also include three 30-megawatt (MW) steam turbine generators. Overall, the pipeline and terminal would require a substantial investment of up to $10 billion. For more background information on the project, please see this article from Tarika Powell at the Sightline Institute.
Under Oregon law, an energy facility with the generating capacity of at least 25 MW must receive a site certificate from the Energy Facility Siting Council (EFSC). A project may proceed without a site certificate if EFSC grants an exemption pursuant to the applicable statutes and regulations. Most relevant to the Project, EFSC may grant an exemption for a “high efficiency cogeneration facility.” This exemption covers energy facilities, other than coal or nuclear plants, which sequentially produce “electrical and useful thermal energy from the same fuel source” and have specified electric generating capacities and heating values.
The Jordan Cove Project applied for a site certificate exemption in June 2018. By the end of August, ODOE staff recommended denying the application. While a staff recommendation is not controlling, it is a potential indicator of a final EFSC ruling. In response, the Project notified ODOE on September 12 that it would be submitting an amended application for a site certificate exemption. Subsequently, the meeting at which EFSC was intended to make a ruling was canceled.
Whether the Project will obtain an exemption from the site certificate requirement or go through the full certification process remains to be seen. However, the Project continues to follow the requisite state and federal processes. (An abbreviated timeline of state actions and information on relevant public comment periods is available on ODOE’s Jordan Cove Project webpage). In terms of the federal process, the Federal Energy Regulatory Commission (FERC) announced that it anticipates issuing a draft Environmental Impact Statement (EIS) in February 2019 and a final EIS by August 30, 2019.
As the fight over the Project continues, it should be an interesting issue to track in the upcoming November elections. Not surprisingly, the Project is highly polarizing, receiving support from trade unions and opposition from environmentalists. As Governor Kate Brown seeks election for her first full term as governor, she remains relatively quiet on the issue. Her office claims that due to the federalism issues at play, she would have no legitimate authority over approval of the project as governor. On the other hand, Governor Brown’s republican opponent, Knute Buehler, is strongly in support of the Project.
Regardless of the legal realities behind the Project, the Governor’s neutral position on Jordan Cove is inconsistent with Oregon’s recent efforts to be a leader in the fight against climate change. The first comprehensive analysis of the potential climate impact of the Project led one senior research analyst to conclude that the Project will “undermine the clean energy transition.” The same report also found that the Project “would make it impossible to achieve… Governor Kate Brown’s goal to have Oregon’s climate reductions line up with the targets of the Paris Accords.” Therefore, Governor Brown is potentially risking her climate reputation as she remains neutral on the Project.
Those interested in Governor Brown’s climate change objectives should keep an eye on the upcoming gubernatorial debates. At the time this post was published, the candidates had agreed to three debates within the span of eight days in October. The candidates will debate in Portland on October 2 and October 9. The final debate will take place on November 4 in Medford. This blog will continue to track the progress of the Project and may report on relevant actions or decisions in the future.