Obama Regulators Reject Fracked Gas Pipeline Across Oregon

[Update, December 15. The Jordan Cove Energy Project announced this morning that they will re-apply to FERC for Federal construction permits and eminent domain authority. This slow, complex process requires the company to start fresh, although they can recycle some pieces of the prior environmental impact statement. This will not reduce the grassroots opposition and determination in any way.]

The Federal Energy Regulatory Commission has conclusively rejected the only U.S. West Coast plan to ship liquefied natural gas from Canada and the Rockies to Asia. On December 9, FERC commissioners announced that they had again voted unanimously to refuse federal approval for the $7.6 billion Jordan Cove Energy Project export terminal and the Pacific Connector Gas Pipeline (PCGP).

FERC’s original ruling against this fracked-gas export project came March 11, 2016, and the December 9 decision denied requests to reopen the federal approval process. This is FERC’s first-ever liquefied natural gas (LNG) export rejection. The agency is funded through back-charging its costs as fees to the energy industry, so it is considered a zero-budget entity for the overstressed federal budget process. FERC is notorious for its easy approvals of dirty fossil fuel projects, making this two-part verdict all the more striking.

FERC’s unprecedented double denial needs to be seen through the frame of an 11-year coordinated grassroots campaign. Dozens of organizations, supporting hundreds of outraged landowners along the pipeline route, have brought together thousands of people all over Oregon to fight this LNG terminal and pipeline.

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An elder from the Yurok First Nation leads a No LNG coalition rally at the Oregon State Capitol on Nov. 14, 2016. (Photo credit: Ted Gleichman)

The pipeline would run 232 miles across four counties in southwest Oregon, slashing a clearcut the width of an interstate highway across two mountain ranges, five rivers, and 400-plus wetlands and waterways. It would terminate at the Pacific Ocean in Coos Bay, Oregon, in a fragile estuary inlet. There, the largest dredging project in Oregon coastal history would need to prepare a sand spit for a massive industrial plant, destroying oyster beds and fisheries. A new 430-megawatt gas-fired power plant—which would be the largest carbon emitter in Oregon—would be built to cool the fracked gas to minus-261 degrees Fahrenheit, to liquefy it for tanker shipping across the Pacific.

All this is planned for the most dangerous earthquake and tsunami zone in North America, the Cascadia subduction zone. The region is overdue for an earthquake that is guaranteed to be the largest in U.S. history. The Cascadia fault lines crack at a minimum of Magnitude 8, and can exceed Magnitude 9. The earthquake zone ruptures on an average of every 250 years; the last time was 317 years ago, in 1700. The tsunami wiped out every indigenous coastal village from Northern California to Vancouver Island.

Jordan Cove and PCGP are owned by Veresen, Inc., a mid-sized Canadian fossil fuel company trying to use LNG export to catapult itself into the ranks of the big-league energy players. Financially, though, Jordan Cove and PCGP are arguably the weakest of some four dozen multi-billion-dollar U.S. LNG export proposals.

FERC rejected Veresen’s plans because the company has no guaranteed contracts to sell the fracked gas overseas. Developers must show a so-called “public benefit” for the people of the United States, and FERC defines that to be determined by approval by the market: If a developer can sell a planned fossil fuel product, they’re good to go. FERC had warned the Calgary-based company for years that guaranteed contracts would be critical for permission to move ahead, with specific requests for progress reports, but got back only vague promises that Veresen was unable to fulfill. 

That bottom line requirement was compounded by Veresen’s dismal record in negotiating construction easements from hundreds of landowners along the pipeline route. By the denial on March 11, PCGP could show FERC easements from only 10% of ranchers, farmers, and other private-sector landowners.

FERC has the power to authorize eminent domain against landowners. This controversial and destructive tool in fracked-gas pipeline development has led to bitter struggles all over the country. Developers typically have to negotiate about 80 percent consent by affected landowners before FERC is comfortable authorizing eminent domain against hold-out landowners and local communities. Forced deprivation of property rights is no small matter.

Along the PCGP route, landowners and their environmentalist supporters have fought back hard, pledging resistance. According to FERC, the refusal of this enormous majority of landowners along a pipeline route to sign on was unprecedented. In the March 11 and December 9 announcements, FERC expressed deep concern about using unheard-of levels of eminent domain against 90 percent of private landowners for a project that could not demonstrate a “public benefit.”

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Members of the Yurok First Nation holds a sign at the No LNG coalition rally. (Photo credit: Ted Gleichman)

The most difficult public issue for project opponents has of course been jobs. The developer can claim accurately that billions of dollars of equipment manufacturing and project construction will generate thousands of temporary living-wage jobs. But jobs that ravage communities and public lands and contribute massively to climate change are not “good” jobs. So simultaneously, we consistently advocate for genuine good jobs, sustainable jobs, converting our state to clean energy and rebuilding our infrastructure for earthquake preparedness and other urgent needs.

The battle is not completely over. Veresen can still sue FERC, or reapply, but for now they have no clear path to construction. Oregon continues to process state permit requests, but our coalition is fighting those effectively too. One way or another, grassroots Oregonians are going to continue to defeat dirty, dangerous fossil fuels and build the just transition.


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