Home Back Issues May 2007 LNG terminals ignite a statewide controversy

LNG terminals ignite a statewide controversy

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Archives - May 2007
Tuesday, May 01, 2007

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?
LNG1.gif 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.

LNG2.gifDan 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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Comments   

 
Brad Vollmer
0 #1 Overcomming resistanceBrad Vollmer 2011-01-02 00:24:45
I would like to speak with someone in your firm regarding mitigating and or eliminating resistance to the practical energy and economic realities we face today. We need to utilize LGN to help power our industries to ensure that we are able to meet the challenges of the future or ever survival itself. The Energy Conservation Corporation of Oregon is a new non-profit organization whose mission is to educate the public on energy conservation, the research and development of non-polluting renewable energy resources. In the mean time LNG can provide a reliable source of needed energy. There are those in our world that would impede the free flow of trade, their actions can and should be minimized if not eliminated. Market Trend Strategies is a pilot project developed to help mitigate and or eliminate elements in the market that tend to resist economic growth. My name is Brad, contact me via this e-address and we'll go have coffee.
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Joyce
0 #2 Joyce 2011-01-02 08:11:58
LNG terminals need to be built in areas that are zoned for heavy industry. They are massive very heavy industry and they will help draw other heavy industry because they are a good power source. If the area economics center around tourism, fishing, high quality water, air and rivers with wildlife, this is a destructive solution to building jobs, because it sets in stone the future direction of local development. The future that could have developed around clean jobs and a clean environment is taken away by LNG.
LNG is a high stakes gamble with a huge amount of money at stake. But their profit is outsourced from your air, water, wildlife, and quality of life. We need to promote new energy solutions and LNG is just another fossil fuel.
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