A good deal for a few, maybe

The prospect of a 230-mile pipeline carrying natural gas between Malin and Coos Bay has surfaced again now that Pacific Connector Gas Pipeline LP has applied for a new federal permit for the project. The safety and environmental concerns raised the first time the project was approved in 2009 remain, and now are compounded by the fact that domestically produced gas would be piped to Coos Bay and exported, rather than imported to Coos Bay from Asia and piped to California for use in the U.S. market.

The pipeline project was launched in 2009 in response to climbing gas prices in the U.S. and concern about domestic supplies. Since then, however, new extraction technologies have produced a glut of domestic gas and prices have fallen. So backers of the pipeline decided to reverse direction and pipe U.S. gas from the Rocky Mountain Region to Coos Bay, where it would be supercooled and compressed, loaded onto ships and taken to Asia, where gas prices have soared.

That sounds like a good deal for the private companies involved, but not for the private property owners who would have to agree to a 3-foot diameter pipeline crossing their land. And maybe not for the country's natural gas customers, who could see prices rise as a result of exporting domestic supplies.

A January 2012 study by the Energy Information Administration, an arm of the U.S. Department of Energy, projected that gas prices would rise as much as 9 percent as a result of exporting gas. In addition, as gas prices rise, electric generating facilities tend to switch from gas to coal to save money, the report notes.

Backers of the project point to the jobs it would create but the 1,000 or so jobs expected to install the pipeline would be temporary. The export terminal in Coos Bay also would mean construction jobs, but maybe only about 60 permanent jobs.

The environmental concerns are significant, as well. The pipeline would require boring under the Rogue River and would cross 30 miles of national forest and 40 miles of U.S. Bureau of Land Management land in addition to 150 miles of private property.

None of this will be happening anytime soon. The Federal Energy Regulatory Commission is not expected to rule on the permit application until 2014, and construction would not begin until 2015.

An import terminal and pipeline were approved in 2009. Two years later the market had flip-flopped and the project had become an export venture instead. There is no guarantee the project will still make economic sense to its investors two years from now.

Even if it does, it won't be of much benefit to anyone else.

Share This Story