WARRENTON — Oregon LNG informed city and state officials on Friday that the company will withdraw a proposed $6 billion terminal and pipeline project on the Skipanon Peninsula.
The company’s move ends a decade of acrimony over a liquefied natural gas project that galvanized residents to protect the Columbia River and caused political upheaval in Clatsop County.
Mayor Mark Kujala said he was told by a company representative that Leucadia National Corp., the New York-based holding company behind the project, was no longer willing to bankroll the effort.
“That is exactly what I heard from Oregon LNG, is that they would be withdrawing the project,” Kujala said.
The mayor said he was told “the holding company — Leucadia — was no longer going to fund the project. So it sounds as though it was a funding or a financing decision that was made.”
Skip Urling, the city’s community development director, said he was told Oregon LNG would not proceed with an appeal of a city hearings officer’s decision to deny the terminal. The hearings officer had approved the pipeline portion of the project.
A hearing on Oregon LNG’s appeal was scheduled before the City Commission for early May.
Urling said he was informed “that they’re done. They’re not going to fight the hearings officer’s position.”
Oregon LNG could not immediately be reached for comment. Richard Glick, a Portland attorney representing the company, advised the state Department of Environmental Quality in an email Friday afternoon that the company is “ceasing development of its terminal and pipeline projects.”
U.S. Sen. Ron Wyden, D-Oregon, said he was relieved that opponents of the project, who had raised environmental and safety concerns about industrial development at the mouth of the Columbia River, had prevailed.
“Local officials and members of the Clatsop County community raised valid concerns about this project from the very beginning,” Wyden said in a statement. “I shared the concerns that the Oregon LNG project would have had negative environmental and economic impacts, and I am relieved that local voices prevailed.”
Oregon LNG had proposed a terminal on the Skipanon Peninsula and an 87-mile pipeline to link with a natural gas connector in Washington state. The company wanted to export natural gas from western Canada and the Rocky Mountains to markets in Asia.
The company had argued that the project would be an economic boon for Warrenton and Clatsop County, providing jobs as well as tax revenue to local governments.
But a coalition of residents, environmentalists and fishermen attacked the project as misguided and potentially dangerous. Activists had previously fought an LNG project at Bradwood Landing east of Astoria, which collapsed in 2010 after hitting financial and political roadblocks.
“After 10 years of fighting, we protected the Columbia River from dirty gas export. This is yet another huge victory for clean water and our climate,” Brett VandenHeuvel, the executive director of Columbia Riverkeeper, a Hood River-based environmental group that led the opposition, said in a statement. “Tens of thousands of people stood up to protect clean water, public safety, and our climate. What an amazing effort and result!”
A draft environmental review of the Oregon LNG project by the Federal Energy Regulatory Commission released in August found that environmental impacts could be reduced if the company took measures to minimize harm to fish and wildlife habitat and water quality. A final review was expected in June.
Yet the project was facing a host of obstacles.
Last year, the state Land Use Board of Appeals upheld Clatsop County’s 2013 decision to deny a permit for a portion of the pipeline. The county’s Board of Commissioners had initially approved the pipeline in 2010, but the vote was reversed when new commissioners were elected after a political backlash.
Oregon LNG was embroiled in a lawsuit with the U.S. Army Corps of Engineers over an easement the Army Corps holds on the Skipanon Peninsula, where the company was leasing land from the Port of Astoria for the terminal.
And the split decision from the city’s hearings officer in March raised significant doubts about whether the terminal could move forward. The hearings officer found that the terminal would adversely impact fish habitat and fishing activity in the Lower Columbia River Estuary.
Oregon LNG’s withdrawal spares the Warrenton City Commission from having to weigh in publicly on an issue that has drawn bitter opposition on the North Coast. The Astoria City Council voted in September to oppose the project. Public opinion was likely more balanced in Warrenton, where the project could have had a more direct economic benefit, but commissioners were facing difficult votes on the company’s appeal.
Oregon LNG publicly downplayed the importance of local approvals for the project, while at the same time seeking local permits to help satisfy multiple layers of regulatory requirements.
“Why would you apply to a city and contest that the city even had jurisdiction in the first place?” City Commissioner Henry Balensifer said.
Warrenton has welcomed big box stores and other business development, in contrast to Astoria, but Balensifer said the experience with Oregon LNG might prompt city commissioners to look more closely at land-use laws.
“There are things that we need to ensure so that we can actually plan and strategize what it is exactly that our community wants and what exactly is appropriate for our community to have in terms of industrial development on our waterfront,” he said.
Energy investors had been pursuing two separate liquefied natural gas projects on the Oregon Coast, a race to seize on a potentially lucrative export market.
The Federal Energy Regulatory Commission in March denied applications for the Jordan Cove terminal and pipeline project at Coos Bay, finding that investors had not identified markets and that the public benefits of the pipeline did not outweigh the adverse effects on landowners.
Veresen Inc., based in Canada, and The Williams Companies in Oklahoma, are appealing the decision, citing new commitments from buyers in Asia. Colorado Gov. John Hickenlooper, a Democrat, has also urged the federal agency to reconsider.
Jordan Cove was further along in the regulatory process than Oregon LNG and did not have the same intense degree of local opposition.
“The proposed LNG terminal in Warrenton was not right for this community, and I join the many Clatsop County residents who are relieved to learn that it will not move forward,” U.S. Rep. Suzanne Bonamici, D-Oregon, said in a statement. “I welcome productive conversations with Clatsop County leaders and residents about sustainable and safe ways to grow the region’s economy that capitalize on the region’s many strengths and create family wage jobs.”