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Overview of Pacific Connector Open House Events
Citizens Rally in Coos Bay before Pacific Connector Open House – June 26, 2012
A Big Thank You to all the Landowners and Citizens who participated!
Excellent job on the protest signs…
Excellent questions at the Open Houses…
Excellent photos and statements of some of you in the press!!
(See links to news stories further below)
Overview of Open House Events
By Jody McCaffree
Approximately 60 – 70 people attended Pacific Connector Open House events held in Roseburg, Coos Bay and Medford. Around 30 or so people attended the Klamath Falls event. Most of the meeting attendees were opposed to the project and many landowners impacted by the proposed project did not attend. There were Anti LNG and Pipeline rallies held before the Open House events in both Coos Bay and Medford. Pacific Connector representatives presented basically the same power point presentation at all four meetings. You can link to the presentation by going to their website (pacificconnectorgp.com). Attendees at all four events asked very good questions which were met with general and sometimes vague answers from Pacific Connector officials.
What We Learned
The Pacific Connector gas pipeline (PCGP) route is pretty much the same as it was before except where it starts at the power plant on the North Spit of Coos Bay and Camas Valley may have some alternative pipeline routes planned.
Landowners in Douglas County were told not to expect any royalties because the company doesn’t own the gas being exported via the pipeline. In Coos County when the question was put to them again but in a different way, Rodney Gregory of PCGP assured me that they do not take people’s land, they purchase easements from people and those easements are done in one lump sum, they do not do annuities. In other words, the landowners will not benefit from the billions of dollars in transportation fees for the gas. Not only will landowners not benefit from the revenue generated but they must maintain and pay taxes on the easement.
According to Gregory, the company generally prefers to mow rather than use chemicals to keep brush clear along the route but would hire a professional if they needed to do any spraying. So when PCGP says ‘they’ won’t be doing something it doesn’t mean someone else won’t be. Landowners can also keep the easement clear on their own if they wish.
When asked about market conditions and if market conditions happen to change making the project obsolete what would happen to the pipeline, PCGP representatives stated that they would have a 25 year commitment to operate the pipeline.
An aerial fixed wing plane will fly over the pipeline easement weekly looking for evidence of leaks like dead or dying plants. In addition, there will be foot patrols once a year and in line inspection of the pipeline every seven years.
With regard to the materials to build the pipeline and where those materials would come from and if they would create local jobs, PCGP representatives stated that they would “not” limit material purchase options to within the United States. If they can get materials cheaper elsewhere they will.
Between the LNG terminal and Pipeline they stated an average of 1,800 construction jobs would be created and they also stated that 50% of their workforce on the pipe would be local or they would aim for that. [In case anyone doesn’t know, the only pipe-fitter local in Oregon is in Tualatin up by Portland, so local to them is a relative term and could mean just within the United States.] PCGP officials stated at the Coos Bay Open House that the project may be done with union labor or it may not be depending on who provides them with the best contract. They generally do not start working with the trades until after the Environmental Impact Statement (EIS) is done and they actually have a FERC Certificate. In the end the pipeline would create only 5 permanent jobs.
The pipeline will be placed at a depth of 3 – 5 feet underground.
When asked about the effects of an earthquake and tsunami, they made it sound like that was just a terminal problem and not a pipeline problem. They appeared to have no real concept whatsoever of what could happen even inland if we had a Cascadia subduction event off the Oregon coast. The statement was made by pipeline representatives that in areas where there are earthquake faults, they build specifically for fault crossings so any impacts (movement) to the pipe would be spread out over a larger area of the pipe to make less impact on the pipe from the fault movement.
According to PCGP representatives that did the Open House presentations, the Grants Pass Lateral natural gas pipeline that runs along Interstate I-5 is approximately 16 – 20 inches wide up North and only about 10 inches wide down by Grants Pass and where the Pacific Connector will connect into it.
It was my understanding at the Coos Bay Open House that PCGP representatives stated the pipeline section that will be going up Haynes Inlet will be encased in cement and floated and then lowered all at once into the bay. Not sure if I heard that entirely correct, however.
FERC Scoping and EIS Review
FERC is looking at possibly the last two weeks in August or possibly September when scoping will occur. FERC is working with the BLM and the Forest Service to get the Notice of Intent (NOI) language approved and scoping dates set. As soon as this is done the NOI will be published and distributed. FERC has not set a date yet for when the Draft EIS may be finished.
Tetra Tech, the third party contractor who will be doing the EIS for FERC, told me that once scoping starts they will not be allowed to communicate directly with the applicant so that they remain unbiased in preparing the EIS.
FERC will be including the South Dunes Power Plant in with its EIS review but the Oregon Energy Siting council will be who has the determination on if the power plant gets a permit or not. The South Dunes Power Plant could essentially operate without the Jordan Cove LNG facility but the Jordan Cove LNG facility could not operate without the power plant. If the Oregon Energy Siting Council were to deny the power plant that could essentially kill the Jordan Cove project.
Pipeline Ownership and Taxes
When asked about what percentage of the pipe was owned by Veresen and if Americans could invest in Veresen, they told me they anticipate approximately 50% of the pipe will be owned by Veresen. Actually it is a subsidiary of Veresen (Veresen U.S. Power Inc) and since Veresen is publicly traded, Americans can invest in the company according to PCGP spokesmen.
At the Coos Bay meeting they stated during the question and answer time that the Pacific Connector would be paying $15 million in taxes spread out over the 4 impacted counties and Jordan Cove would be paying Coos County 30 million in taxes. Bob Braddock of the Jordan Cove Energy Project stated that even though they are in an Enterprise Zone they would be paying the tax anyway as a contribution. When I made the statement that they would also be in an Urban Renewal District and none of the tax money would go to the county but would go to the Port of Coos Bay, Braddock said they would be paying the money to the tax assessor and had no control with what actually happened to funds after that.
At the Medford Open House PCGP clarified that they would be paying only $11 million in taxes not $15 million spread out over the 4 impacted counties.
If FERC issues Pacific Connector a Certificate of Public Convenience and Necessity that would give them the right to use Eminent Domain against landowners regardless of the direction and flow of the gas in the pipeline. Regulators will be the ones deciding if the benefits of the project outweigh the impacts and if the project is in the public interest.
Gas Markets and Pricing
The Pacific Connector Gas Pipeline admitted they will be in competition with other pipeline companies and utilities for the same market share of gas coming from Canada and the Rockies. PG&E who was once a partner in the Pacific Connector project will now be in competition with them.
Obviously gas producers will be looking for the best price for their gas and as with any globally traded commodity, the marginal price sets the price for everyone. If Japan is willing to pay $15 to $20 per million BTUs (MMBtu) for LNG, prices globally will float up towards this price, and that’s about what we should expect to pay here in the Northwest if an LNG terminal is built. We’ll essentially be linking our mostly regional market to an intensely competitive global market for LNG, where the highest bidder sets the price. Byputting ourselves in a competitive bidding war with Japan, Korea, India, China, Spain, and others, we can fully expect natural gas prices in America to go up.
U.S. natural gas, priced at less than $4 per million BTU (MMBtu), currently costs much less than natural gas in other nations. The Energy Information Administration (EIA) expects that Henry Hub spot prices will average $3.23 per MMBtu in 2013. (http://188.8.131.52/forecasts/steo/) Currently in Asia, prices for major LNG importers closely correlate to oil prices, and LNG is currently priced over $17.00 per MMBtu. In Europe, prices are lower at $12.00 to $14.00 per MMBtu. (Source – Forbes, June 2012)
IN THE NEWS
Great video clips, photos and statements of some of you in the press!
“…Think about the currently proposed Pacific Connector natural gas pipeline, even just for a moment.
1. All the certain environmental damage to streams and aquatic life the pipeline would cause.
2. The lack of national interest in exporting natural gas because exporting it would increase domestic natural gas prices.
3. The use of eminent domain to construct the pipeline through private property.
4. The fact that it would only serve to benefit private pipeline profits…
The currently proposed 3-foot diameter, 230-mile-long pipeline, having unodorized (undetectable) highly pressurized (1,440 pounds per square inch) and highly explosive gas about 3 feet under the ground is absolutely crazy! The proposal is as bizarre as things contained in George Orwell’s “1984.”
Just think of the explosive wildfire risks such a pipeline would pose to our homes and watersheds!…”