MAY 2007: FOCUS ON ENERGY
At the brink
Liquid natural gas terminals may be inevitable in Oregon,
despite the safety risks. What does the state stand to gain, or
lose, if the controversial terminals are built here?
By Abraham Hyatt
Liquid natural gas is a story, like so many in an
energy-fixated world, that begins and ends with demand. Not
just a demand for cleaner, cheaper or more sustainable, but a
demand for more. More for Europe. More for Asia. A whole lot
more for North America.
In the global energy market, Oregon has always been little
more than a blip on a fuel gauge. But liquefied natural gas, or
LNG, may soon be arriving on the state’s shores —
and with it, a controversy that pits economic benefits against
risks to the region’s safety and businesses.
The hazards are significant. A federal report released in
February said that under certain conditions, a fire from a
ruptured LNG tanker ship could burn people up to 1¼
miles away. Security zones around ships could also have an
impact on shipping and business on the Columbia River.
On the other hand, there has never been an LNG tanker-related
accident in the 50 years the liquid has been shipped. Each
terminal is estimated to create about 50 jobs. And lower
port-to-consumer costs, along with a steady supply, means
cheaper natural gas for the state’s residents, industries
and power plants.
Across the country, there are about 40 proposed terminals
— where LNG is turned back into a gas before it enters
the web of natural gas pipelines that spread across the county
— in some stage of the federal permitting process. Five
are in Oregon: four along the lower Columbia River, one in Coos
Bay.
Of those projects, Coos Bay and Bradwood Landing — about
20 miles east of Astoria — are the furthest along in the
years-long permitting process.
Bradwood Landing could get approval from the Federal Energy
Regulatory Commission later this year; Coos Bay will probably
complete the agency’s review process next year. Both
still face what are expected to be vociferous public comment
periods.
Much of the outcry against those terminals will come from
business, environmental and citizen groups. At the core of
their arguments is a single question: Since each proposed
terminal would produce far more than the state’s annual
needs, is Oregon being forced to bear a significant burden for
other states’ benefit?
CONTROVERSY OVER LNG has killed terminal pro-jects in Alabama,
Maine and California. At the core of the debate is the question
of safety. By itself, LNG is relatively benign: Cool natural
gas to minus 260 F, which reduces its volume by a factor of
600, and it turns into a non-flammable liquid — ideal for
cheaply shipping large quantities from Africa, the Middle East
and Indonesia without having to pressurize it.
But when released, LNG rapidly evaporates into a cloud of
natural gas. If that’s ignited in an accident, it can
have devastating effects. In 1944, 128 people were killed and
225 injured after a storage tank in Cleveland, Ohio, broke
open. In 1979, a leak at a plant in Maryland killed a worker
and severely burned another. In 2004, an explosion at an export
terminal in Algeria killed 27 and wounded 72. Other lethal
accidents at LNG plants, involving natural gas instead of the
liquid variant, have also occurred over the years, along with
several dozen minor leaks and spills.
Those in the natural gas industry say looking only at those
incidences skews LNG’s overall safety record —
especially the safety record that applies to the types of
plants that would be built here. Joe Desmond, the senior vice
president for external affairs at NorthernStar Natural Gas, the
company behind the Bradwood project, uses an almost scripted
line many in the industry use when talking about safety: In the
decades that LNG receiving terminals (as opposed to storage or
export facilities like the one in Algeria) have been operating
around the world — many in dense urban areas —
there have been no accidents that have affected the public.
“There’s a perception of danger, that it’s
going to explode any minute,” says Dan Kirschner,
executive director of the Northwest Gas Association.
“That’s because the first most people heard about
it was one or two years ago. People once felt the same about
gasoline.”
In the end, what critics and proponents of LNG are really
arguing about is likelihood. No one doubts that an accident at
a terminal could have devastating effects on a nearby
community, but is that likely to happen? Both sides cite
studies backing their arguments, but it’s the job of the
U.S. Coast Guard to lower the overall risk by keeping people
away from the facilities and tankers.
As part of the federal permitting process, earlier this year
the Coast Guard announced that the estimated 125 tankers that
would visit Bradwood Landing each year must have a 500-yard
security zone around them while traveling on the river —
creating a moving bottleneck on a river that transports more
than $16 billion worth of goods annually.
It’s here that LNG and Oregon business interests begin
to intersect.
IN ITS SAFETY REPORT, THE COAST GUARD tried to address some
business concerns by dictating that tankers must coordinate
their travel with other ships to avoid conflict. Because of
that, Sebastian Degens, manager of marine planning and
development at the Port of Portland, is cautiously optimistic
that LNG will not severely affect commercial river traffic.
NorthernStar maintains it will try to schedule deliveries so as
to cause as few delays as possible.
But Columbia Riverkeeper executive dir-ector Brent Foster,
who’s been working with fishermen and crabbers, argues
that tankers may be able to coordinate schedules with the
largest ships, but that those in the fishing industry could be
stuck for hours with a slowly spoiling cargo of seafood,
waiting for a tanker to cross the often treacherous mouth of
the river.
“It’s going to be king of the Columbia. And no
matter what they say, if we go to Code Red,” he says,
referring to the national security threat level, “all
bets are off. They can keep the river shut down.”
Other major ports on the river, and the two pilot associations
that guide large ships through the mouth and up the river,
decline to take a position until after an as-of-yet-unscheduled
group meeting.
The Columbia River Business Alliance, a loose affiliation of
Astoria-area businesses, has taken an anti-LNG stance because
of its fears that a terminal in Warrenton, across Young’s
Bay from Astoria, or even the up-river facilities, will affect
local business, par-ticularly the tourism industry. Alliance
president Robert Stang says the plants are not what people
visit the area to see or move to the area to live around, and
could have a drastic impact on the area’s image.
Even the promise of jobs is a sore subject for some on the
coast, where the memory of lost timber jobs is still raw. Jody
McCaffree is a vocal critic of the proposed terminal in Coos
Bay. Her husband drives more than 100 miles to work for Georgia
Pacific up the coast near Newport. “I wish he could work
closer to home, but there’s a line you have to draw in
the sand,” she says. “We need to develop, but not
just let another industry come in and plunder us
again.”
In Washington state, U.S. Rep. Brian Baird (D-Vancouver)
announced his opposition to the Bradwood project in
March. He acknowledged that while there may be some economic
benefits to the region, the stringent security measures would
have a negative impact on shipping, the environment and private
property owners. Three other Washington state legislators soon
followed suit. Oregon representatives have yet to take a public
stand on
Bradwood. And Clatsop County is hiring a consultant
for an independent safety review of the project this
summer.
CRITICS OF THE COOS BAY PROJECT are also angry about the
accompanying 230-mile pipeline that would connect the terminal
to a major interstate pipeline that runs the length of the
Willamette Valley. Each of the proposed terminals will have to
be connected to that line. And each of the projects will
produce, every year, about 60% more natural gas than the entire
state used in 2005.
It’s a touchy subject where all that gas is going to go.
Some in the industry, such as Desmond from Bradwood Landing,
think it’s too early in the process to say where. But Bob
Braddock, project manager in Coos Bay, comes straight out and
says what critics have started using as a dirty word:
California. It’s pure business, he says. Oregon uses less
gas in the summer, and California power plants need a lot of
juice to run all those Central Valley air conditioners; in the
opposite season, the demand is reversed.
Dan
Serres, program coordinator for Friends of Living Oregon
Waters, doesn’t think the risks balance out. He asks why
the state — and specifically rural, poorer regions
— would take on the public safety and economic risks for
something it doesn’t need. “The implication is that
it’s not suitable for Northern California, but it is
suitable for Oregon,” he says.
Whether or not they’re suitable, will multiple terminals
be economically viable? Spiro Vassilopoulos, CEO of the Port
Westward project, a few miles north of Clatskanie, thinks the
Columbia River alone can support two or three terminals.
Braddock thinks the state will support one at the most. Groups
opposed to the terminals think that intense public pressure
will stymie any construction.
That pressure may have the desired results. Mike Buettner with
Eureka LNG Watch, a group that opposed a proposed terminal near
Eureka, Calif., says public outcry played a major role in
killing the project. “It’s always the same: A small
port in a struggling economy is eager to jump on the next big
thing and make all this money,” he says. “But
it’s the community that ends up doing the
scrutinizing.”
And while the controversy around LNG swirls, demand for
natural gas will grow. And grow. And grow.
In the coming decade, natural gas usage in the Pacific
Northwest is expected to increase more than 8%, while
production in the Rocky Mountains and Canada will begin to
level off. In the next three years alone, an estimated $73
billion will be invested in LNG infrastructure, much of that in
North America. Whether consumers like the risks the industry
represents, there seem to be few alternatives; it’s
unlikely that wind, wave, or solar power will be able to make
up the difference.
Which means LNG terminals in Oregon may be inevitable. The
state and the nation are hungry for energy. And demand is a
juggernaut that, one way or another, must be fed.
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