Jordan Cove LNG Terminal

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Jordan Cove LNG Terminal is a proposed LNG export terminal project located near Coos Bay, Oregon. The developer of Jordan Cove LNG is Calgary-based Pembina Pipeline Corporation which bought out Veresen, the original project promoter, in May 2017.[1]

Maps

The terminal project will be located near Coos Bay, Oregon

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Project Details

  • Owner: Pembina Pipeline Corporation[2]
  • Location: Coos Bay, Oregon
  • Coordinates: 43.432825, -124.238399
  • Type: Export[2]
  • Trains: 5[2]
  • Capacity: 7.5 mtpa (1.5 mtpa per train)[2]
  • Status: Shelved[3]
  • Start Year: 2025[2]
  • Financing: Unknown; Texas law firm Baker Botts and Australian investment bank Macquarie are advisers on the project[4]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

The estimated cost to build Jordan Cove and all related infrastructure is US$10 billion. If constructed, it would be the largest construction project in Oregon's history.[5]

Jordan Cove LNG would include a shipping berth for tankers, a gas liquefaction operation, massive storage tanks, a new power plant, and a 230 mile long, 36 inch feeder pipeline, all powered by an included 420 megawatt generator.[6] If constructed, it could be the largest construction project in Oregon history.[6]

The facility was originally conceived as an import facility. Instead, the LNG export facility is planned to export fracked gas from Canada and the Rockies through southern Oregon and onto ships bound for Asia from Coos Bay.[7]

In March 2016, FERC rejected Jordan Cove, Pacific Connector Pipeline, and its feeder pipeline that would have stretched across the state, saying applicants had not demonstrated any demand for LNG, which means there is a lack of need for the facility. The demand for Jordan Cove LNG was based on customers in Asia, however, natural gas markets in Asia are in upheaval.[6]

This is the first time FERC has rejected a pipeline.[6] However, Jordan Cove is allowed to reapply by submitting an entirely new application.

The reason given for the rejection was that Veresen had not demonstrated the need for the project, and that the benefits from the project would not outweigh the harm done to individual landowners to justify the use of eminent domain. The pipeline's backers had not yet found buyers for the natural gas. On March 25, Veresen announced that they had found a buyer for the gas that would be exported, which was a consortium of Japanese utilities. They suggested they will appeal the decision by FERC.[8] In December 2016 federal regulators announced they will not reconsider their decision to deny permission of the LNG terminal proposal.[9] However, Jordan Cove has announced they plan to refile a new formal application with FERC in late 2017.[10]

Geologists say an earthquake on the Cascadia Subduction Zone could produce a tsunami that would move across the marsh and run up against the facility's storm surge barrier.[11]

The Oregonian reported that the proposed site of Jordan Cove LNG sits in a tsunami inundation zone. To address this issue would take about ten months of just moving earth. The plan is bring Jordan Cove 46 feet above sea level by excavating a shipping berth in the foreground, and use the resulting dredge to build an 80-acre mesa behind the shipping berth that would elevate Jordan Cove's storage tanks and gas liquefaction equipment. The builders claim the tsunami and storm surge barrier will make Jordan Cove safe.[11]

In December 2011, the Department of Energy granted the Jordan Cove and Pacific Connector Pipeline project a license to export liquified natural gas, making Jordan Cove the first project in 40 years in which developers proposed a new pipeline and terminal primarily to export natural gas. A 230 mile pipeline would stretch from the Klamath Basin to Coos Bay, crossing hundreds of streams and rivers, protected federal forestland, and private property. Developer Jordan Cove filed a preliminary application with FERC in February 2012 seeking pre-filing status to explore the feasibility of a liquefaction export project that would be built and operated at the same site. FERC granted that status.

On April 16, 2012, FERC vacated authorization of the proposed Jordan Cove LNG terminal, as well as the certificate to construct the pipeline, concluding that an export facility serves a different purpose than an import facility, and requires its own full analysis of environmental and economic impacts. Those federal approvals are now void. Jordan Cove said they are working on getting their export application ready by 2013.[12]

On March 23, 2014, the US Department of Energy conditionally approved the Jordan Cove LNG project, permitting it to export up to 0.8 billion standard cubic feet of natural gas per day for 20 years.[13]

In March of 2020, the Federal Energy Regulatory Commission (FERC) voted 2-1 to conditionally approve the terminal and the related Pacific Connector Gas Pipeline, which would send gas to the export terminal. FERC rejected the proposal in 2016, but cited that the pipeline project now has agreements for 95.8% of capacity, which the FERC chairman argues justifies the approval and the use of eminent domain. However, numerous market challenges remain for development, and the state of Oregon has declined to sign off on necessary regulatory approvals, including a quality certification and coastal zone management determination. However, FERC may find that national interest outweighs state interests, and would have the authority to waive the state regulations.[14] According to Natural Gas Intel, sources in Oregon have indicated that the chances the terminal will be built are low because of a lack of contracted supplies and failure to get key state approvals. Nine of 14 local permits granted to Jordan Cove have been appealed to the state land use appeals board, along with several federally delegated state actions that are unresolved. Jordan Cove lacks the Oregon Department of Environmental Quality approval for a water permit, as well as Department of State Lands (DSL) permit on dredging and a Coastal Zone Management Act (CZMA) permit. In some cases, these permits have already been denied at least once[15]

Despite the developers' March 2020 victory with FERC, they cited numerous objections to FERC's approval criteria. One demand FERC made, which approval is contingent upon, is to change the timing of pipeline shippers' contract to better reflect market realities. Developers also objected to FERC's consideration of a 26-mile area as eligible for listing in the National Register of Historic Places. Finally, developers demanded clarification regarding that before construction can begin, companies must file a copy of the determination of consistency with the Coastal Zone Management Plan issued by the state of Oregon. Each of these issues benefits those opposed to the terminal. The Natural Resources Defense Council also sought rehearing on multiple grounds saying, for instance, that public convenience and necessity were not demonstrated for a pipeline whose purpose was to export gas.[16]

In an order of rehearing issued on May 22, 2020, FERC granted the Jordan Cove and Pacific Connector pipeline's promoters' requests for changes to the March 2020 approval on two counts: 1) it agreed to Pacific Connector's argumentation that an 18 month period before the end of the shipper's service agreement was needed to notify pipeline shippers of the right of first refusal; 2) the US Secretary of Commerce would be able to make a determination overriding pre-construction barriers which could emerge under the edicts of Oregon state's Coastal Zone Management Plan. FERC refused to change direction on its consideration of a 26-mile area as eligible for listing in the National Register of Historic Places.[17]

FERC simultaneously rejected extensive requests on multiple grounds by environmental groups, landowners, tribes and state agencies for a rehearing of its March 2020 approval for Jordan Cove.[18] Two lawsuits were filed against FERC in the U.S. Court of Appeals for the D.C. Circuit by a range of environmental groups in the final week of May 2020. Lawsuits may also be filed by the state of Oregon, multiple Tribal governments, and fishers and crabbers.[19][20]

In July 2020, the US Department of Energy issued the project with a final license for LNG exports to all countries, including those without U.S. free trade agreements. In August 2020, the Oregon supervisor of the U.S. Fish and Wildlife Service wrote to FERC that additional information was required concerning Jordan Cove's pipeline connector, the 15.2-mile-long Blue Ridge Variation. The alternative pipeline route is for the project’s Pacific Connector Gas Pipeline and included in the final environmental impact statement (EIS). The final EIS issued was backed by FERC in December 2019. The U.S. Fish and Wildlife Service pointed out to FERC that the information it had provided “is not adequate to identify and analyze the effects of the Blue Ridge Alternative route to listed species.”[21]

In an August 2020 interview with Axios, Oregon Senator Jeff Merkley said of the project, "It's not going to be built." His opposition to the project, dating back to 2017, is matched by Oregon's other senator Ron Wyden who declared his opposition to the project in March 2020. According to Senator Merkley, "I’ve talked to a whole number of folks — several people who have been deeply involved in international finance of energy projects — and they don’t believe that the company can lock down the sales needed to justify the $6 billion investment." Merkley's opposition is also due to his concerns over natural gas's contribution to global warming.[22]

In February 2021, Pembina said it could no longer predict when it would able to build the terminal and that it was evaluating a path forward. The company has so far failed to secure any firm offtake agreements tied to its supply.[23]

In April 2021, Pembina notified a US appeals court it was pausing development of Jordan Cove and the Pacific Connector Gas Pipeline to assess the impact of recent regulatory decisions that could threaten the future of the project.[3] This was followed up in May 2021, following further state reversals of two of Jordan Cove's dredging permits, by confirmation from Pembina that development of Jordan Cove is officially on pause. Donald Sullivan, the project's manager, filed a letter with FERC citing a laundry list of state permit denials that prevent the project from moving forward despite a federal approval from the agency. Sullivan's letter noted: "Applicants have decided to pause the development of the Project while they assess the impact of these decisions".[24]

State Permit Rejections

In March of 2016, the project was denied by FERC. However, Veresan filed a new application with FERC for the proposed LNG terminal in January 2017, for 0.8 bcfd of capacity.[25]

On May 6th of 2019, the Oregon Department of Environmental Quality (DEQ) denied the Clean Water Act Section 401 permit because the massive LNG export terminal and pipeline could not demonstrate that they would meet Oregon’s clean water standards. Jordan Cove LNG and the Pacific Connector Pipeline cannot be built without the state permit. With their denial, DEQ released 200 pages of detailed findings about how the project does not meet Oregon’s water quality standards. DEQ notes that “DEQ does not have a reasonable assurance that the construction and authorization of the project will comply with applicable Oregon water quality standards.” This decision follows a record-breaking public comment period that closed last August in which 42,000 people submitted comments raising concerns about the impact the Jordan Cove LNG project would have on fishing, recreation, public drinking water, and the economy of southern Oregon. Other permitting periods like the Federal Energy Regulatory Commission’s Draft Environmental Impact Statement (DEIS) are still moving forward. The comment period on the DEIS is open until July 5th, and hearings are expected to take place across southern Oregon in late June. However, the project cannot be built without the Clean Water Act permit.[26]

In January 2020 the project's sponsors withdrew their application for a removal-fill permit that would allow them to remove organic material from Jordan Cove after the Oregon Department of State Lands refused to extend a deadline for obtaining it.[27]

In February of 2020, Oregon’s Department of Land Conservation and Development said that the proposed terminal would have significant adverse effects on the state’s coastal scenic and aesthetic resources, endangered species, critical habitat, fisheries and commercial shipping. The State has now denied all three of the primary permits required for construction, including a water quality permit by the Oregon Department of Environmental Quality and a dredging permit by the Department of State Lands. The Federal Energy Regulatory Commission (FERC) is expected to release their official environmental impact statement soon, and past statements from FERC suggest that they'll approve the project, citing that the environmental impacts would not be significant enough to warrant stopping the project, or could be reduced to less than significant levels with the implementation of proposed mitigation measures. However, with the State's recent decision, only U.S. Secretary of Commerce Wilbur Ross could decide to preempt the state authorities’ decision. However, even if Ross were to do so, the project still faces an uphill battle at the Department of Environmental Quality and the Department of State Lands.[28]

In March 2020, in a 2-1 vote, FERC conditionally approved the Jordan Cove LNG export project, and the related Pacific Connector Gas Pipeline. The decision was taken amidst widespread concerns that acute LNG market conditions make the feasibility of such a major investment unfeasible. Democratic Commissioner Richard Glick voted against approval and said in a statement that "By issuing a certificate for the pipeline needed to serve the LNG facility, the commission is giving the developer the ability to immediately begin the process to take land via eminent domain when the future of the Jordan Cove LNG project — and perhaps other proposed LNG projects — remain very much in doubt".[3] Glick also explained that the decision violated the Natural Gas Act and the National Environmental Policy Act because it did not adequately consider the project’s greenhouse emissions or its impact on endangered species. Oregon State Governor Kate Brown and State Senator Ron Wyden also criticised the FERC, with Brown vowing that the project wouldn’t move forward without following state permitting processes.[29]

According to Natural Gas Intel, sources in Oregon have indicated that the chances the terminal will be built remain low because of a lack of contracted supplies and failure to secure key state approvals. Nine of 14 local permits granted to Jordan Cove have been appealed to the state land use appeals board, along with several federally delegated state actions that are unresolved. Jordan Cove lacks the Oregon Department of Environmental Quality approval for a water permit, as well as Department of State Lands (DSL) permit on dredging and a Coastal Zone Management Act (CZMA) permit. In some cases, these permits have already been denied at least once[15]

A further financial barrier to the project moving forward is that in March 2020 Pembina was compelled to cut its 2020 capital expenditure plans for 2020 by US$900 million to US$1 billion, because of concerns over the coronavirus outbreak. Additionally, it has not been able to announce buyers for its LNG.[3]

In July 2020, the Oregon Land Use Board of Appeals (LUBA) reversed an approval by the city of North Bend for the project's terminal facility. The appeal concerned dredging that would need to be completed in order to widen the channel in Coos Bay for traffic to the proposed terminal. In its announcement, LUBA said, "Without the ability to approve two key components of the project ... the application will need to be significantly modified, if not a new application filed".[30]

In January 2021, FERC dealt a further blow to the project by unanimously upholding Oregon state's denial of a water permit for the LNG terminal. The project promoters had petitioned FERC to override Oregon’s decision, saying the state had waived its authority under the federal Clean Water Act. Commenting on the FERC decision, Oregon Governor Kate Brown said "At every stage of the regulatory process, I have insisted that the Jordan Cove LNG project must meet Oregon’s rigorous standards for protecting the environment, or it cannot move forward."[31]

Two weeks after the FERC ruling, on February 8, 2021, the U.S. Secretary of Commerce rejected a request by Pembina to override the State of Oregon's February 2020 denial of the Coastal Zone Management Act (CZMA) federal consistency review.[32] The project cannot begin construction without approval of the CZMA federal consistency review. The National Oceanic and Atmospheric Administration (NOAA) Administrator found that the company failed to meet its burden of showing that the project is consistent with the objectives of the CZMA. NOAA particularly noted the insufficiency of the record regarding impacts to endangered and threatened species, cultural and historic resources, and cumulative effects. Reacting to the latest setback for the project, Courtney Johnson, of Crag Law Center, said, "This company has tried to gloss over the devastating impacts of this project for years. NOAA’s decision represents a level of scrutiny deserving of such a massive and irreversible project, and finds the evidence lacking. Now that the state and the federal agency have spoken, it’s time for this project to be gone, once and for all."[33]

Greenhouse Gas Emissions

A 2018 study by Oil Change International found that Jordan Cove LNG, and its Pacific Connector feeder pipeline, could release between 36.8 and 52 million metric tons of greenhouse gas emissions annually. This is equivalent to 15.4 times the emissions of Oregon’s last remaining coal-fired power plant, the Boardman plant, or 7.9 million passenger vehicles.[34]

Citizen Opposition

Environmental Protesters Rally Against Jordan Cove Energy Project.jpg

There has been vocal opposition to the Jordan Cove LNG proposal from the beginning. Locals opposed to the project formed the organization Citizens Against LNG.[35]

For example, on December 7, 2015, dozens of activists protested outside a State Land Board meeting in Salem, Oregon along with local oyster growers who argued that the proposed Jordan Cove LNG and connecting pipeline would damage oyster beds in Coos Bay, along the Oregon coast. Protesters claimed that 157 miles of the pipeline would cross private property, and as a result around 700 individual private properties could be seized through eminent domain. The Oregon Department of State Lands is one of several state agencies that can deny permits for both the proposed pipeline and the LNG terminal in Coos Bay.[36]

In March 2016, FERC rejected Jordan Cove, Pacific Connector Pipeline, and its feeder pipeline that would have stretch across the state, saying applicants had not demonstrated any demand for LNG, which means lack of need for the facility. Jordan Cove demand was based on customers in Asia. Those natural gas markets are in upheaval.[37]

After the project's resurrection upon the announcement that a new filing would be submitted to FERC, protests and organizing against the project continued. In March of 2017, close to 200 protestors voiced their opposition to the project at what was supposed to be an informational meeting hosted by the project's sponsors.[38]

Citizen groups

Industry groups

Articles and resources

References

  1. "Pembina buys Veresen for $7.1 billion as pipeline sector consolidates" Reuters, May 1, 2017.
  2. 2.0 2.1 2.2 2.3 2.4 U.S. FERC delivers blow to Oregon LNG terminal, upholds state's permit denial Reuters, Jan. 19, 2021
  3. 3.0 3.1 3.2 3.3 Harry Weber, 'Advantage Canada' adds more uncertainty for paused Jordan Cove LNG in US S&P Global, May 7, 2021
  4. "Pembina gets FERC approval for Jordan Cove LNG," IJGlobal, March 23, 2020.
  5. "Federal regulators approve Jordan Cove LNG project in Coos Bay and 230 mile feeder pipeline," The Oregonian, March 19, 2020.
  6. 6.0 6.1 6.2 6.3 Ted Sickinger, "Feds reject Jordan Cove LNG terminal," The Oregonian, March 11, 2016.
  7. "Stop Jordan Cove," Sierra Club Oregon Chapter, Nov. 2018.
  8. Sickenger, Ted (March 25, 2016). "Jordan Cove LNG finds potential gas buyer, says there is need for the project". The Oregonian. Retrieved 25 March 2016.
  9. Ted Sicklinger, "Feds will not reconsider their denial of Jordan Cove LNG terminal in Coos Bay" The Oregonian, December 9, 2016.
  10. "Regulatory Process," Jordan Cove LNG, Accessed 21 August 2017.
  11. 11.0 11.1 "Jordan Cove LNG" Company website, accessed October 6, 2015.
  12. Rob Manning, "Backers Of Proposed Natural Gas Terminal Undeterred By FERC Decision," NPR, April 17, 2012.
  13. David Unger, "US approves more LNG exports as Europe looks to curb Russian gas," CSM, March 24, 2014.
  14. FERC approves Jordan Cove LNG project, despite market, state obstacles S&P Global, March 19, 2020.
  15. 15.0 15.1 Richard Nemec, Jordan Cove LNG Export Project Said Still Facing Uphill Battle Natural Gas Intel, April 6, 2020.
  16. Jordan Cove LNG developers seek several fixes to FERC authorizations S&P Global, April 20, 2020.
  17. US FERC tweaks Jordan Cove order to align timing of pipeline, LNG contracts S&P Global, May 26, 2020.
  18. FERC says it will deny all requests for rehearing of Jordan Cove LNG KCBY, May 22, 2020.
  19. Southern Oregon Advocates Challenge Federal Approval of Jordan Cove LNG Sierra Club press release, May 27, 2020.
  20. NRDC Sues FERC over Unlawful Jordan Cove LNG Project, Natural Resources Defense Council, May 28, 2020.
  21. Christopher Lenton, "Jordan Cove LNG Facing More Delays as Pipeline Route Scrutinized", Natural Gas Intelligence, Aug. 20, 2020.
  22. Amy Harder, "How climate and business woes are sinking a natural-gas project", Axios, Aug. 3, 2020.
  23. Harry Weber, Annova LNG discontinuing US export project: operator, S&P Global, Mar. 22, 2021
  24. Alex schwarts, Jordan Cove pipeline project on pause Herald and News, May 12, 2021
  25. "US LNG export developers make their bets on ways to outlast market glut," SNL, Sep 11, 2017
  26. "FOR IMMEDIATE RELEASE: OREGON AGENCY SAYS NO TO JORDAN COVE LNG PROJECT" Klamath Tribes News and Events, May 7, 2019.
  27. Facing denial, Jordan Cove LNG project withdraws application for key state permit, Oregon Live, Jan. 24, 2020
  28. Ted Sickinger, Oregon denies key permit for Jordan Cove LNG project on eve of federal decision, Oregon Live, Feb. 20, 2020
  29. Federal regulators approve Jordan Cove LNG project in Coos Bay and 230 mile feeder pipeline, The Oregonian, Mar. 19, 2020
  30. Jamie Parfitt, Oregon Agency Delivers Setback to Jordan Cove LNG Project, KDRV.com, Jul. 21, 2020.
  31. U.S. FERC delivers blow to Oregon LNG terminal, upholds state's permit denial, Reuters, Jan. 19, 2021.
  32. "Decision and findings by the Deputy Under Secretary for Operations performing the duties of U.S. Under Secretary of Commerce for oceans and atmosphere in the consistency appeal of Jordan Cove Energy Project, L.P., and Pacific Connector Gas Pipeline, LP, from an objection by the Oregon Department of Land Conservation and Development", Oregon State Government, Feb. 8, 2021.
  33. Oregon’s Coastal Zone Management Act Denial of Jordan Cove LNG Project Upheld by Federal Government, Power Past Fracked Gas press release, Feb. 8, 2021.
  34. Jordan Cove LNG and Pacific Connector Pipeline: Greenhouse Gas Emissions Briefing, Oil Change International, January 2018
  35. "Home" Citizens Against LNG, Accessed 22 August 2017.
  36. "Oyster growers protest proposed LNG pipeline" Tracy Loew, Statesman Journal, December 8, 2015.
  37. Ted Sickinger, "Feds reject Jordan Cove LNG terminal," The Oregonian, March 11, 2016.
  38. "Jordan Cove draws protest in renewed LNG pipeline push," Medford Mail Tribune, The Oregonian, 24 March 2017.

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