MEDFORD, Ore. -- The Department of Energy Wednesday granted the Jordan Cove and Pacific Connector Pipeline project an license to export liquified natural gas.
The boom in hydraulic fracturing and shale gas production and low gas prices in the U.S. have led a half-dozen existing LNG import facilities to seek export licenses. But Jordan Cove is the first project in 40 years in which developers are proposing a new pipeline and terminal primarily to export natural gas.
Under the terms of the license, the proposed terminal in Coos Bay can export up to 9 million metric tons of liquified natural gas each year to free trade agreement countries.
Jordan Cove project manager Bob Braddock says the company will apply for a more complex license to export to non-free trade agreement countries, including Japan, next year. Japan is one of the world's top importers of LNG.
But the project still has to proceed through a FERC licensing process and faces legal challenges from the state of Oregon, and public opposition from land owners in Southern Oregon and environmental groups.
A 230 mile pipeline would stretch from the Klamath Basin to Coos Bay, crossing hundreds of streams and rivers, protected federal forestland, and private property.
The terminal and pipeline were originally proposed, and permitted, for import.
Environmental groups and opponents of the pipeline suggested import made little sense, given plans to build a natural gas pipeline delivering abundant domestic natural gas from Wyoming to the interconnect in Malin, Oregon. And Oregon Attorney General Kroger formally challenged the Federal Energy Regulatory Commission's decision to approve the project, on the grounds that it was not needed and that its environmental impact had not been properly considered.
In September, acknowledging little import market existed, the Jordan Cove project
license with the Department of Energy. Last week, Attorney General Kroger filed a new motion, asking FERC to set aside the license it gave Jordan Cove for an import facility and pipeline.
The attorney general's spokesman Tony Green says an import-export project has the potential to harm Oregon’s environment and economy.
“Exporting liquefied natural gas will actually lead to increased prices for natural gas for industrial as well as residential users,” he says.
But Jordan Cove's Braddock says that impact to natural gas prices is not a major factor FERC considers when permitting a project. Braddock says that even as export facility the project would strengthen the region's pipeline infrastructure.
The only existing natural gas export facility on the west coast is in Alaska, and it is in the process of shutting down.