Ten months ago, few on the North Coast knew what LNG was. But in early November, the initials entered the region's vocabulary as Calpine Corp.'s proposal for a liquefied natural gas plant sparked controversy among many residents shocked by the suddenness of its arrival and concerned about safety and security risks.
Since then, energy companies have held informational meetings, opposition groups have held protests and invited guest speakers, Oregon's energy department has convened public meetings, and local governments have considered how land-use laws might apply to this emerging industry.
Four private companies have proposed building LNG receiving terminals at sites along the lower Columbia River:
at Tansy Point in Warrenton;
on the Skipanon Peninsula in Warrenton;
across from Washington's Puget Island in Bradwood;
at Port Westward in Columbia County.
There is an extensive permitting process to site a terminal, and while the Bradwood Landing project has started down that official path, the other three companies are continuing to conduct studies and sort out land-use issues.
Today The Daily Astorian takes a look at where each project stands.
How it all beganInterest in LNG has peaked nationwide over the last few years as a way to meet the growing demand for natural gas. LNG is a superchilled form of natural gas that is one-six-hundredth of the volume of the gas. Because LNG is so condensed, it's feasible to transport it overseas in large tanker ships; in its gaseous form the fuel can only be brought to the United States via pipelines.
There are four LNG import terminals operating in the United States, and almost 60 North American projects that have either entered the federal permitting process or have been identified as potential sites, according to the Federal Energy Regulatory Council, or FERC.
Estimates for how many terminals will actually be built vary.
Northern Star Natural Gas Chief Executive Officer Si Garrett said he thinks that locally, a market could develop to support one LNG facility from this round, and perhaps an additional terminal a decade or so after that.
"I believe that it's not so much a contest as to who gets their permit first, it's a contest as to who has both the best environmental and the best economic solution for the area," he said. "That will ultimately determine which project will get built."
State vs. FedsOf the four projects, Northern Star's Bradwood Landing is furthest along in the permitting process. In mid-March, officials with Bradwood started the pre-filing process with FERC. In this federal pathway, after FERC accepts the pre-filing outline and description of the project, the agency will start an environmental review and take public comment. FERC has yet to hold a public meeting on the Bradwood project.
In a similar process with the state Department of Energy, developers submit a notice of intent, the state gathers information and holds public meetings, then issues a project order telling the company what issues it needs to address to present its case to the state Energy Facility Siting Council.
However, the role of the state in the siting process is now in question.
In the energy bill signed by President Bush Monday, FERC was given "exclusive authority to approve or deny an application" for siting an LNG terminal.
"The major issue is, what role does it leave to the states?" said Cathy Van Horn, project manager with the energy department. The department had been considering language for a new rule to address the economic impact of LNG facilities, but has put that process on hold while the agency and others interpret the law.
Bryan Lee, a FERC spokesman, said that the legislation only "affirms the Commission's long-standing authority under the Natural Gas Act," and does not upset the status quo with the states. He added that the states have authority to regulate LNG terminals under federal law by way of the Coastal Zone Management Act, the Clean Water Act, and the Clean Air Act.
Bradwood's developers are still undergoing the state energy department process, and filed a notice of intent April 15. The state agency held a public hearing in Knappa in late May.
State issues project orderMonday, Department of Energy staff issued a project order to Northern Star, telling the company what issues to cover in its application. The document can be downloaded at (http://egov.oregon.gov/ENERGY/SITING/review.shtml#Northern_Star_Natural_Gas)
"As we get all these comments, we have the responsibility to answer to FERC and the state that we have addressed valid comments to stakeholders to the extent that it's possible to address them, or required to address them," Northern Star's Garrett said.
For instance, the company talked to landowners along potential pipeline routes; some industrial businesses expressed a desire to have a new natural gas pipe nearby, he said, while other landowners feared it would be disruptive. So the company tried to design routes accordingly, Garrett said.
Many residents of Puget Island oppose the nearby project, and Garrett said that the company has tried to address their concerns. Engineers have designed a sand berm to block all but the tanks from view, for example, and Garrett said he would work with nearby homeowners to make sure that if property values go down the company would compensate them for the difference.
"We do believe that in large respect, public opinion is going to be positive on the project when the facts are in," Garrett said.
He said Northern Star was expecting to submit draft applications to FERC in September, and begin submitting drafts to the state around that time. He predicted that the company would submit a final completed application to the federal agency in January.
Northern Star is also working on a water safety analysis study with the U.S. Coast Guard and organizations and agencies along the river to examine issues related the movements of LNG ships past Astoria to Bradwood. The study will outline when ships will come in, what safety zones they will require, what kind of escorts they might need, what impact the ships will have on river commerce, and other issues.
"For the next four to six months, we're just going to be doing very detailed work," Garrett said.
"We have not found any issues that we believe are insurmountable," he said. "We believe that there's just a lot of work to be done."
First on the radar screenFurther upstream is Port Westward, which was the first proposal made public last August. Port Westward LNG LLC, had asked FERC to start the pre-filing process this spring, but FERC denied the request.
According to a letter from FERC to the company's president, Robert Ramage, the process couldn't go forward because Port Westward hadn't signed contracts with the proper consultants and the project was not "sufficiently defined." FERC officials also noted that the company did not have control of the necessary land.
The company will need land currently owned by Roger Thompson's family, but the family has been unwilling to sell or lease the property. Spiro Vassilopoulos, Port Westward's chief executive officer, referred all questions relating to that property to the Port of St. Helens.
"We're just having discussions with the Thompson family to see what the alternatives are, what the issues are," said Peter Williamson, executive director of the port. The port is interested in seeing the LNG development go forward, and is looking at what options are available for the property, Williamson said, although he added that he didn't think it was appropriate to discuss the specifics publicly at this point.
"With the Thompson property, we are basically in a holding pattern, and until the port approaches us with the availability of land on port property, we cannot do anything," said Vassilopoulos, who emphasized that the port is not doing anything at Port Westward's behest.
Port Westward also had been trying to either buy or lease land owned by George Poysky, but has arranged the layout of the facility so that it is no longer necessary, Vassilopoulos said. Although one pipeline route option would go through the property, the company recently bought additional land and is examining other routes that would bypass Poysky's property.
While the project is on hold until land issues are straightened out, the company is doing preliminary engineering and environmental studies in anticipation of moving forward with prefiling, Vassilopoulos said.
"We hope to have our pre-filing done in the very near future, and we look forward to getting under way with all the permitting that is involved," he said.
He added that Port Westward is an optimal site for an LNG facility because there is a smaller environmental impact, there aren't people living next door and, of the four projects, it is closest to the main natural gas distribution pipeline that any LNG facility needs to connect to.
Warrenton map helps CalpineCloser to the mouth of the Columbia, Calpine's subsidiary Skipanon Natural Gas LLC is conducting studies related to its proposed Warrenton facility. Calpine has leased 94 acres at the tip of the Skipanon Peninsula from the Port of Astoria, and has been working to determine the appropriate zoning laws.
"You have to have your land-use issues out of the way first, before you pre-file," said Calpine Vice President for Business Development Peter Hansen. "We think that's the best way to go about it."
This spring, Skipanon Natural Gas approached the Warrenton Planning Department for a code interpretation to determine if an LNG facility could be considered a marine cargo transfer facility, and therefore be a permitted use in an I-2 zone.
The property isn't currently zoned I-2, but company officials wanted to know what zone they should request when they eventually apply for a zone change, Hansen said.
The planning staff said that an LNG facility would fall in an I-2 zone, however four parties appealed that decision. The Warrenton Planning Commission heard the appeals in June, and denied the appeals in July. The appellants can still appeal the planning commission's decision to the City Commission, however, and at least one, People for Responsible Prosperity, has. The appeal will be heard at a special meeting Aug. 30.
If the decision holds, Skipanon Natural Gas will start the rezoning process for the Warrenton site.
"The land use is sort of the primary issue right now," Hansen said. He added that the company wants to be most of the way through rezoning before it starts the permitting process with the state or federal regulators.
Calpine also requested that the city annex some land under the Columbia River and Youngs Bay thought to be outside the city limits, so that when officials apply for a lease to build an off-loading facility for the ships, the property will be under one agency's control. Shortly before a City Commission hearing on the issue Tuesday evening, a 1899 map was found showing the land was within the city limits. The city still plans to vote on the annexation ordinance, which it says will clarify borders.
The company has also conducted initial studies of the site, and found that the navigational issues of getting ships in and out should be workable, that the subsoils are suitable for a facility, and that the terminal would be the necessary distances from other buildings, Hansen said. Skipanon Natural Gas is still working on pipeline issues, he said, as well as many other questions.
"There's always lots of little issues that come up in the permitting of a project, that's to be expected," he said, adding that there haven't been any major surprises.
Hansen said that although when Calpine started the project, he didn't think the market would support more than one LNG facility along the lower Columbia, he has heard talk that there could be a need for more than one.
"At this point in time, we're focused on our own project," he said.
Five-year windowThe fourth project is also proposed for Warrenton, at Tansy Point, on property owned by the city but leased to Warrenton Fiber Co.
After holding public meetings in late March, at its following meeting in April the Warrenton City Commission decided to give the company, owned by Martin Nygaard, five years to negotiate for a lease amendment that would be necessary to build a LNG plant.
The consulting firm PFC Energy is working to see if an LNG facility on the site would be feasible. If the studies suggest it is a possibility, Warrenton Fiber can ask for lease amendment, but the company must convince the commissioners that the facility will meet certain criteria before a lease change will be OK'd.
The consultants are looking at a variety of issues, from environmental questions like what types of species live in the area to engineering questions like plant design, said Robert Wyatt of WRC International, an environmental consultant with the project.
"The town specified some of the things they would like to see some information on," Wyatt said. "Those are the things that we're focusing in on."
He said some of the benefits of the site include the fact that it is already near deep water so dredging wouldn't be required, and also that Tansy Point is close to the mouth of the river, so the ships won't have to go under the Astoria Bridge or pass the city.
He said that although no major problems have popped up yet, there are always issues to work out.
"There's no such thing as a perfect site, at least I haven't found one in 30 years," Wyatt said.
TANSY POINT Company: Warrenton Fiber Co.
Location: Tansy Point, Warrenton
Permitting progress: No federal or state paperwork yet filed; feasibility studies under way
Land issues: Leases site from city of Warrenton, which gave the company five years to negotiate lease changes that would allow an LNG facilitySKIPANON Company: Skipanon Natural Gas LLC/Calpine Corp.
Location: Northeast tip of Skipanon Peninsula, Warrenton
Permitting progress: No federal or state paperwork yet filed; studies under way
Land issues: Leased land from Port of Astoria; determining zoning requirement for site; requested that Warrenton City Commission annex part of the river to clarify ownershipBRADWOOD Company: Northern Star Natural Gas LLC
Location: Bradwood, across from Puget Island
Permitting progress: Submitted prefiling paperwork to the Federal Energy Regulatory Commission and a notice of intent with the Oregon Department of Energy; the state issued the company a project order Monday; the company expects to start submitting draft applications in September and a formal application at the beginning of 2006
Land issues: Project order contains applicable regulations for sitePORT WESTWARD Company: Port Westward LNG LLC
Location: Port Westward, in Columbia County north of Clatskanie
Permitting progress: FERC denied submitted prefiling paperwork, the company withdrew its submitted notice of intent from the state; studies under way
Land issues: Port Westward needs control of privately owned land parcel, which the owners are currently unwilling to sell