Pipeline backers 
renew application
 for Jordan Cove

The proponent of the Jordan Cove liquefied natural gas facility in Oregon and an associated pipeline has filed new applications with the Federal Energy Regulatory Commission, and is hoping for a decision by the agency by the end of next year.

If approved, the project — which has risen both in price and projected output — could go into service by 2024, following a possible final corporate investment decision in 2019, Veresen Inc. said in a news release.

The Canadian-based company sees the project as a way for natural gas produced in the Rockies and Canada to be shipped to markets in Asia. It has received substantial support in Colorado due to the potential for providing a stable, long-term market for gas produced in the region.

FERC previously rejected the proposal, in good part due to concerns about impacts to landowners and a failure to demonstrate enough overseas demand for the gas. Those are issues Veresen seeks to address in the applications for the facility and the 229-mile pipeline that would connect it to interstate lines.

The project also will be reviewed by a FERC commission that’s differently constituted from the one that rejected it during the Obama administration. President Trump has filled two vacancies on the five-member board and a Senate committee has approved two more of his nominations. Gary Cohn, his chief economic adviser, also has spoken in support of it.

Jordan Cove would be built in Coos Bay, Oregon, with a capacity to produce and ship 7.8 million metric tons of gas per year, and a current estimated construction cost of $9.8 billion.

Those numbers are up from previous estimates of 6 million tons per year, at least for initial production capacity, and $7 billion for construction.

Project spokesman Michael Hinrichs said the increased production capacity estimate is a result of updated weather data for the Coos Bay area that indicates temperatures are cooler there than Veresen previously had understood to be the case. Making liquefied natural gas involves cooling of the gas, so cooler temperatures increase the efficiency of the process, meaning Jordan Cove will be able to produce more LNG than previously thought, Hinrichs said.

He said the rising costs are largely related to the pipeline side of the project, stemming from factors like construction timelines and crew costs, and efforts to optimize the route.

The revised pipeline project includes more than 50 route adjustments aimed at reducing impacts. Its right of way now would directly impact 227 private landowners, other than timber companies that Veresen expects to agree to provide rights of way in most or all cases. That’s down from 254 non-timber private landowners previously, and about 40 percent of those landowners have signed right-of-way agreements, Hinrichs said. A big concern for FERC during its previous consideration of the project was the potential for landowners along the pipeline route facing right-of-way condemnation proceedings for a project with little demonstrated need.

Jordan Cove says it now has preliminary agreements with potential Asian buyers for nearly half of the project’s capacity, and is in active discussions with other possible customers.

Hinrichs said the highest estimated cost isn’t an issue for the project’s viability. He noted that Veresen is awaiting final regulatory approval in Canada for a merger with another Canadian firm, Pembina Pipeline Corp., which has more capital than Veresen and has expressed its commitment to the Jordan Cove project. Jordan Cove’s revised application also eliminates a standalone 420-megawatt associated power plant.

“Modern LNG facilities around the world can incorporate the power-generating infrastructure in the LNG facility itself, which is what we’re doing,” Hinrichs said.

The change will reduce the project’s environmental footprint and air pollution, Hinrichs said.

He called the FERC applications for the project “a big milestone” involving tens of thousands of pages of studies, designs and other documents, and said Veresen is confident of its chances with FERC. He said the project goes above and beyond regulated requirements, and its improvements and enhancements reflect its willingness to listen to concerns.

Hinrichs said public opinion will continue to matter for the project, including the bipartisan support it has received in Oregon and Colorado.

A vocal coalition continues to oppose the project in Oregon, concerned about its potential impacts to landowners, waterways and Coos Bay, local fisheries and the climate.

“This is a private corporation asking for the power of eminent domain to export Canadian fracked gas through our property, putting us at risk against our will. It is just plain wrong,” Deb Evans, a landowner who would be impacted by the pipeline, said in a news release put out by a coalition of more than 20 groups opposed to the project.

Jody McCaffree with Citizens Against LNG said in the release, “We are counting on our state agencies to stand up for Oregon by denying permits that don’t meet state requirements. This would shut the project down once and for all.”

Hinrichs said the project already had a state air permit approval when FERC denied the project. He thinks the revised project will meet all state regulatory requirements.

David Ludlam, executive director of the West Slope Colorado Oil and Gas Association, noted there have been several years of efforts within the Piceance Basin and Colorado to support Jordan Cove. He says that has culminated in the project applications “with a new FERC in place that supports infrastructure as their number one priority.”

“I think it’s a really exciting development,” he said of the new applications for the project.

He thinks a number of recent developments weaken opponents’ arguments against the project, from Veresen’s impending purchase by a well-capitalized company, to the elimination of the power plant and Veresen’s success in lining up potential customers.

He said between the gas resource that exists in the Rockies and energy scarcity in other parts of the world, local supporters have always believed the project “fundamentally can sell itself,” and have just been doing all they can to boost it.

He credits oil and gas companies, Club 20, the Grand Junction Area Chamber of Commerce, Associated Governments of Northwest Colorado, Colorado Mesa University, the Grand Junction Economic Partnership, local counties and communities, state and federal elected officials and others for their work on behalf of Jordan Cove.

“It’s just a monumental movement in the same direction, which you don’t always see these days,” he said.


COMMENTS

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This subject is fraught with so many issues ranging from the use of eminent domain to confiscate private property to the extended timeline of the project and whether LNG will be a fossil fuel of the future vs wind, tidal and solar in the regions that are suppose to be customers.
But the spokesman statement from the CANADIAN company Veresen, (this pipe company is in the middle of being purchased by another CANADIAN company due to poor performance) is extremely disturbing. Mr. Hinrichs, THE PROJECT DIRECTOR , did not know the ambient historical temperatures in the Coos Bay Oregon area?  Though these temps will not remain static, if this is the level of planning and the engineering expertise that Veresen is projecting then this project should definitely be an American project.  Building a highly volatile plant in the “Ring of Fire” is also a sanity issue.

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