Predicting the future

Opponents of a proposed liquefied natural gas export terminal in Coos Bay and the pipeline across Southern Oregon that would carry gas there have reason for concern after the U.S. Energy Department gave conditional approval to the project this week. But the facility is still years away from exporting any gas, and global market conditions that make it attractive now could change by then.

That's a reasonable possibility because the project literally has reversed direction once since it was first proposed.

Originally, the Jordan Cove project was planned as an import facility, receiving liquefied gas shipments from Asia and other places where gas was cheaper, warming it back to a gaseous state and piping it into California, where it would be stored for use in the domestic energy market.

Jordan Cove received a license to import LNG just as new hydraulic fracturing technology known as "fracking" made possible the recovery of huge quantities of gas from shale formations in this country, driving down the price of gas here relative to the rest of the world. The Jordan Cove project was shelved, but the company behind it, Veresen Inc., then applied to build the facility as an export terminal instead.

Monday's Energy Department decision is only one step in the approval process. Other federal and state agencies must sign off, including the Federal Energy Regulatory Commission and the Oregon Department of Environmental Quality.

Oregon Sen. Ron Wyden, who was lukewarm toward the project as chairman of the Energy and Natural Resources Committee, now touts the facility as a needed provider of jobs. Backers say the project would create 2,000 high-wage construction jobs for four years, and 150 permanent jobs in Coos Bay, long an economic backwater.

Recent events in Ukraine, where Russia has annexed the Crimea region, have increased calls for the Obama administration to accelerate approvals of gas exports as a way to put pressure on Russia, a major supplier of gas to world markets. The Jordan Cove project wouldn't directly affect Russian gas deliveries to Europe because exports from Coos Bay would be headed for Asia, but they would have some effect on the overall world supply.

Still, gas exports would not begin until 2019 at the earliest. By then, any number of circumstances could change again, from the global price of gas to Russia's role in the world market.

U.S. gas production could change, too. The environmental consequences of fracking are causing increasing concern, and restrictions on the practice could push prices higher in the future, making exports less attractive.

Environmental concerns over the pipeline route through parts of Jackson County also will play a role in the approval process, as could challenges from property owners. And opponents question the wisdom of putting a liquefied natural gas facility in a known earthquake and tsunami zone — not idle concerns.

In the end, state and congressional leaders must ensure that any benefits to Oregon's economy are worth the risk to the environment inherent in building a gas pipeline and an LNG export plant.

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