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The state of Oregon is protesting a liquefied natural gas export license for the Jordan Cove Energy Project on grounds that shipping gas overseas from the Coos Bay project potentially conflicts with a regional need for the same gas, including supplies now going to California. The state quietly filed its protest last month, which Sen. Ron Wyden (D-OR) highlighted at a Nov. 8 Senate Energy & Natural Resources Committee hearing on the implications of the U.S. becoming a liquefied natural gas export nation in the face of bulging shale gas supplies. Wyden said exporting gas would raise the price considerably (see story page 8). For instance, while the price of gas in the U.S. now averages $3.60/Mcf, LNG exports from a terminal in Alaska fetch $11.50/Mcf, according to Department of Energy data. Wyden complained exporting gas as LNG would push the price in the U.S. toward world levels. In its protest to DOE--which is weighing the license--Oregon Department of Justice attorney Jas Adams complained the company failed to specify the source for the gas it would export. Jordan Cove simply stated in its license application it would get “North American” gas from the Malin hub along the Oregon-California border. The hub receives gas from four different pipelines and routes much of it to Pacific Gas & Electric for the utility’s California customers. Adams further challenged the federal agency to publish Jordan Cove’s application in the Federal Register so the public could participate in the export licensing process. Department of Energy deputy assistant secretary for oil and natural gas, Christopher Smith, explained that agency approval of licenses to export gas to nations that have free trade agreements with the U.S. is a matter of “rebuttable presumption.” That is, unless somebody can show it’s not in the public interest the Natural Gas Act requires the department to issue the export license without delay. In response to a flood of applications to export gas, the department determined earlier this year it did not need to publish notices of licensing proceedings in the Federal Register as long as it was the intention of the project developers to export only to nations with Free Trade Agreements. DOE found that “the requirement for granting the application without delay or modification overrides regulatory authority for public notice and other hearing type procedures.” In cases where applicants wish to send gas to nations without free trade agreements, then the department is giving notice and determining whether or not the export license is in the public interest. At this point, Jordan Cove only is seeking a license to export 1.2 Bcf/day of gas to nations with which the U.S. has free trade treaties. That equals about 20 percent of the 6 Bcf/day used in California, according to data from the California Energy Commission. But that may just be the start. In a filing with the Federal Energy Regulatory Commission, company attorney Janet Robins said Jordan Cove plans to seek a subsequent license from DOE to export additional liquefied natural gas to nations which lack free trade agreements with the U.S. She added the company plans to apply to federal regulators next summer for approval to convert its license to construct a liquefied natural gas export terminal into an authorization to build an export terminal. If all goes as planned, the company hopes to begin exports in 2017.

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