Trump ad­viser calls for re­viv­ing a nat­u­ral gas project on Ore­gon coast

The Washington Post - - THE WORLD - BY CHRIS MOONEY chris.mooney@wash­post.com Steven Mufson con­trib­uted to this re­port. More at wash­ing­ton­post.com/ news/ en­ergy-en­vi­ron­ment

A top ad­viser to Pres­i­dent Trump on Thurs­day ap­peared to throw the administra­tion’s sup­port be­hind a pro­posed liq­ue­fied nat­u­ral gas ter­mi­nal in Ore­gon that had been re­jected by reg­u­la­tors dur­ing the Obama administra­tion.

“The first thing we’re go­ing to do is we’re go­ing to per­mit an LNG ex­port fa­cil­ity in the North­west,” said Gary Cohn, di­rec­tor of the Na­tional Eco­nomic Coun­cil. “Just think of the trans­port time from the North­west to Ja­pan ver­sus any­where else. Then we’ve got to put fa­cil­i­ties on the East Coast to get from the East Coast to Ger­many.

“The one place we’re go­ing to per­mit in the North­west, it’s been turned down twice al­ready,” Cohn said in com­ments at the In­sti­tute of In­ter­na­tional Fi­nance, in which he called the op­por­tu­nity for ex­port­ing liq­ue­fied nat­u­ral gas “enor­mous.”

Although Cohn did not name a spe­cific project, the White House con­firmed Thurs­day that Cohn was re­fer­ring to the pro­posed Jor­dan Cove LNG ex­port ter­mi­nal, which would be lo­cated in Ore­gon’s Port of Coos Bay. That’s where Vere­sen, the Cal­gary, Canada-based com­pany whose sub­sidiary is propos­ing the project, wants to con­struct two 160,000cu­bic-me­ter stor­age tanks and other fa­cil­i­ties that would re­ceive nat­u­ral gas from a pipe­line, com­press it into a liq­uid for trans­port, and then pipe it to tanker ships for sale abroad.

It isn’t clear what Cohn meant by say­ing that “we’re go­ing to per­mit” the project, be­cause fi­nal ap­proval rests with the Fed­eral En­ergy Reg­u­la­tory Com­mis­sion, an in­de­pen­dent agency.

Yet Cohn’s re­marks fit with a broader push in the Trump administra­tion to per­mit more large en­ergy in­fra­struc­ture projects, such as the Key­stone XL Pipe­line.

The Fed­eral En­ergy Reg­u­la­tory Com­mis­sion turned down Jor­dan Cove, as well as the pro­posed 232mile Pa­cific Con­nec­tor Gas Pipe­line that would link to it, in a unan­i­mous de­ci­sion in March 2016. The agency found that the project would be “in­con­sis­tent with the pub­lic in­ter­est,” chiefly be­cause the pipe­line would have sig­nif­i­cant “ad­verse ef­fects on landown­ers,” many of whom did not ap­prove of it and could have their prop­er­ties dis­turbed or oth­er­wise af­fected through emi­nent do­main if it were to be built. Be­cause the ex­port ter­mi­nal would not serve a pur­pose with­out the pipe­line to connect to it, it was re­jected, as well.

FERC also re­jected a sub­se­quent re­quest that the pipe­line be re­con­sid­ered last De­cem­ber. How­ever, the com­pany an­nounced plans to re­file, and in Fe­bru­ary — un­der the Trump administra­tion — started that process.

Cohn met with Don Althoff, chief ex­ec­u­tive of Vere­sen, in March. In­ter­viewed af­ter that meet­ing, Althoff said the project would gen­er­ate 4,000 con­struc­tion jobs and 240 per­ma­nent jobs. He said they were reap­ply­ing for the per­mit be­cause “now we meet the re­quire­ments for pub­lic good.”

But this does not mean that any fu­ture ap­proval will nec­es­sar­ily go quickly. The com­mis­sion has only two of its five seats oc­cu­pied, and an­other of those is ex­pected to be­come va­cant this sum­mer, which means it can­not achieve a quo­rum to vote on projects. More­over, FERC ap­point­ments re­quire Se­nate con­fir­ma­tion.

Vere­sen did not re­spond to re­quests for com­ment.

Liq­ue­fied nat­u­ral gas is nat­u­ral gas that has been con­verted to a liq­uid form, ren­der­ing it more com­pact and al­low­ing it to be trans­ported more eas­ily. Be­cause the United States has re­cently be­come such a ma­jor nat­u­ral gas pro­ducer, thanks to the boom in frack­ing, or hydraulic frac­tur­ing, the op­por­tu­nity to ex­port that gas to mar­kets around the world has drawn grow­ing at­ten­tion. This may ex­plain Cohn’s con­tention that ex­port­ing LNG presents an “enor­mous” op­por­tu­nity for the United States.

But such projects have of­ten gar­nered en­vi­ron­men­tal re­sis­tance, es­pe­cially in the Pa­cific North­west. The Sierra Club, Friends of Liv­ing Ore­gon Wa­ters, Columbia River­keeper and many other groups had ob­jected to the Jor­dan Cove project on en­vi­ron­men­tal and other grounds.

De­spite Cohn’s en­thu­si­asm, it isn’t clear how big the mar­ket will ul­ti­mately be for ex­ported U.S. nat­u­ral gas. While the United States is late to the game, sev­eral other coun­tries, led by Qatar, ex­port large quan­ti­ties. And the Henry Hub price of nat­u­ral gas has risen over the past year from a low of $1.56 per mil­lion Bri­tish ther­mal units in March 2016 to $3.09 on Mon­day, in­creas­ing its price for sale abroad as well as do­mes­ti­cally.

JABIN BOTSFORD/THE WASH­ING­TON POST

Na­tional Eco­nomic Coun­cil Di­rec­tor Gary Cohn, with coun­selor to the pres­i­dent Kellyanne Con­way, said that the op­por­tu­nity for ex­port­ing liq­ue­fied nat­u­ral gas is “enor­mous.”

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