Energy | Ecotrope

Why put a nail in the Bradwood LNG coffin?

Ecotrope | Nov. 4, 2010 9:55 a.m. | Updated: Feb. 19, 2013 1:45 p.m.

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Even though Bradwood LNG backer NorthernStar Natural Gas Inc. has gone bankrupt, this week's land-use decision against the project will make the company's still-valid federal license less valuable.

Even though Bradwood LNG backer NorthernStar Natural Gas Inc. has gone bankrupt, this week's land-use decision against the project will make the company's still-valid federal license less valuable.

The Oregon Land Use Board of Appeals sided with liquefied natural gas opponents in the ongoing dispute over the Bradwood Landing liquefied natural gas terminal yesterday. The board ruled Clatsop County wrongly granted land-use approval to the project without considering the full size of the development and without requiring enough protection for salmon.

LNG opponents are saying the ruling has broader implications for the rival LNG project in Warrenton – Oregon LNG. We’ll see about that.

Both projects were proposed for sites on the Columbia River, but Bradwood project backers have taken more heat for proposing a terminal in valuable feeding grounds for juvenile salmon.

The Bradwood project was already on hold after backer NorthernStar Natural Gas declared bankruptcy earlier this year. The company had been the front-runner among three LNG projects proposed in Oregon, but land-use challenges were holding up multiple permits needed to build the facility.

Courtney Johnson of the Crag Law Center, one of the challengers in Bradwood’s LUBA case, explains why the recent land-use ruling is still a significant victory for the anti-LNG forces – despite the company’s bankruptcy:

“Opponents of liquefied natural gas (LNG) celebrated earlier this year when the company announced it was filing for Chapter 7 bankruptcy, putting its project on hold.  However, the project still has its federal license, making it possible that a purchaser of that license would seek to resume the project.  Despite on-going bankruptcy proceedings, Bradwood Landing and Northernstar Energy filed an appeal of the Land Use Board of Appeal’s (LUBA) decision to remand land use approval for the project.  This was the second time that LUBA had remanded Clatsop County’s land use approvals for the LNG facility as a result of challenges brought by Columbia Riverkeeper and other LNG opponents.”

County land-use approval is a key component of two permits the project needs from Oregon Department of Environmental Quality, as well as a state Coastal Zone Management Act approval. In other words, the project could never be built without it – even if the federal license changed hands. That may be why NorthernStar continued defending the project in court even after declaring bankruptcy. Many reports described yesterday’s LUBA ruling as a “nail in the coffin” for the project. Why put a nail in the coffin?

Anyone familiar with the history of the Oregon LNG project can tell you why. The original backer of the Warrenton LNG facility, Calpine Corp., filed for bankruptcy in 2005. But the project didn’t die just because the company ran out of cash. The rights to the project were sold to Leucadia National Corp., a holding company with investments in all kinds of industries. The company bought the land lease for project for $4.2 million, and project chief Peter Hansen moved to a new team. In the end, the project itself emerged from the bankruptcy relatively unscathed. The biggest change, from an outsider’s perspective, was that project fell behind Bradwood Landing and the Jordan Cove LNG projects in the federal permitting process.

Given a chance to catch up, opponents are now asking, will Oregon LNG struggle to meet the same land-use law requirement to “protect” salmon as did the Bradwood Landing project? You have to wonder why it wouldn’t.

Here’s how Johnson explains LUBA’s take on how an LNG project needs to “protect” salmon under state land-use law:

When the County approved the land use application, it also determined that mitigation efforts included in the project would protect natural resources including endangered species and traditional fishing grounds.  Rather than requiring the proposal to avoid or prevent harm to those resources, the County found that efforts to minimize adverse impacts were sufficient to protect the resource.  On review, LUBA determined that the meaning of the word “protect” requires that those resources be saved or shielded from anything more than de minimus damaging impacts.  LUBA  held that the County’s reliance on mitigation measures was insufficient.  Again, the Court of Appeals agreed.  After reviewing the definition of “protect” and the context of the phrase, the Court concluded that “‘Protect,’ in this context, means more than minimizing the adverse impacts of conflicting development through mitigation.  It means inhibiting development that causes significant adverse impacts on the protected resource.”

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