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FERC not concerned with Oregon LNG challenge to Army Corps easement

The commission does not require an energy company to own the proposed project site when the application is filed.
By Erick Bengel

The Daily Astorian

Published on October 30, 2015 8:39AM

Last changed on October 30, 2015 11:03AM

Suzanne Bonamici

Suzanne Bonamici

Ron Wyden

Ron Wyden

Jeff Merkley

Jeff Merkley

The Federal Energy Regulatory Commission is well aware that the land on Warrenton’s Skipanon Peninsula where Oregon LNG wants to build a liquefied natural gas facility is the subject of a property dispute between the company and the U.S. Army Corps of Engineers.

Does the dispute affect the commission’s decision on whether to authorize Oregon LNG to move forward with the proposed $6 billion terminal and pipeline project?


The commission said as much to U.S. Rep. Suzanne Bonamici in response to a letter the congresswoman and U.S. Sens. Ron Wyden and Jeff Merkley sent FERC last month stressing that Oregon LNG’s design plans collide with a nearly 60-year-old Army Corps easement.

Property disputes lie outside the commission’s expertise and jurisdiction, the letter states. And, in any case, the commission does not require that an applicant, like Oregon LNG, own the project site when the application is filed.

Eventually, of course, the applicant “must obtain the necessary rights for the site on which they intend to build,” the commission wrote. “However, this is not a process that the commission administers.”

Such disputes, then, do not influence whether the commission allows energy companies to proceed with development, the letter states.

“Often the agreements needed to secure the land are complex and involve lengthy negotiations between the parties. Many times, these agreements cannot be completed until after the commission has authorized a project,” reads the letter, signed by Chairman Norman C. Bay.

The commission’s policy is to continue processing the applications “as long as there is the possibility of future resolution to any site access issue.”

Bonamici could not immediately be reached for comment.

Terminated project

The Democratic lawmakers — without taking sides on the Oregon LNG project — had asked whether the commission has confronted similar cases where an energy company doesn’t hold title to the land it wishes to build on.

The commission answered that it has — and noted that, because the property dispute could not be resolved, the company backed down.

In January 2004, Sound Energy Solutions filed an application for an LNG import terminal in Long Beach, California, but the site owners declined to enter into a lease with the company.

“In light of the fact that there was no ability for the applicant to gain access to or control of the proposed LNG import terminal site, the applicant requested that the commission terminate the proceeding, and the commission did so in March 2008,” the commission wrote.

Opponents of Oregon LNG hope that the company’s conflict with the Army Corps spells the end of the Oregon LNG project as well.

However, Mike Connors, a Portland attorney representing Oregon LNG, said during a public hearing on the company’s land use permit applications that he believes the Army Corps wants something in exchange for the easement and that the two parties will ultimately reach an agreement.

Last summer, the U.S. District Court in Portland ruled against Oregon LNG in a lawsuit filed against the Army Corps. The company had claimed that the Army Corps, which has held an easement to deposit dredging spoils since 1957, has no right to the land beneath the water that would become the site of the LNG facility.

But the court found that the statute of limitations to bring the claim had long expired and dismissed Oregon LNG’s lawsuit.

Now the company argues that the Army Corps, which hasn’t deposited dredge spoils on the site in more than 20 years, has effectively abandoned the property. The litigation is ongoing, Connors said.

Environmental statements

In August, FERC’s environmental staff released a draft environmental impact statement on the Oregon LNG project. The statement concluded that the project will cause adverse environmental impacts on water quality and fish and wildlife habitat, but that the company could reduce these impacts to less-than-significant levels through mitigation measures proposed by FERC staff and the company.

When the environmental staff held two public comment meetings at the Clatsop County Fair & Expo Center last month, 77 concerned people spoke out against the project and three spoke in support.

Their comments, the environmental staff said, will be addressed in the commission’s final environmental impact statement, to be released in February. The commission will consider the findings before deciding whether to grant Oregon LNG permission to break ground in Warrenton.


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