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FERC called to deny approval of pipeline project

Published by
World Pipelines,

Southern Oregon property owners whose rights and land have been held hostage by the proposed Pacific Connector Gas Pipeline project for almost a decade have filed legal papers with the Federal Energy Regulatory Commission (FERC). Landowners are calling on FERC to deny approval of the Pacific Connector pipeline project in the wake of the recent crash of the LNG export market and admissions that neither the Pacific Connector Pipeline nor the Jordan Cove LNG terminal have secured any customers.

The pipeline route

In response to questions by FERC, Pacific Connector admitted in a 4 November 2015 letter that it had not secured even a single pipeline customer and had only negotiated right-of- way easements on just 4.7% of the pipeline route. FERC is required to weigh both market demand and the extent of negotiated landowner easements prior to issuing a certificate of convenience and necessity that would give Pacific Connector the power of eminent domain over 600 private landowners along the pipeline route.

Market prices

Prices in the Pacific Rim LNG market the Jordan Cove and Pacific Connector projects were intended to serve have dropped more than 60% in just the last year amid a glut of global LNG supply and decreasing Asian demand. Many energy industry analysts now say new US LNG export projects are no longer viable.

Comments on FERC

“FERC should not be putting hundreds of landowners at risk of eminent domain for a project without any proven market demand,” says the landowners’ attorney Thane Tienson who has helped fight other Oregon pipelines intended for LNG export. “It is not surprising Pacific Connector does not have any actual customers and has made little effort to obtain landowner right-of-way easements for their project. The high-price LNG market the project was originally intended to serve has evaporated.”

“Enough is enough, we have been captives in this LNG export shell game far too long. This foreign corporation is asking FERC to wager our life’s work, our homes and our livelihoods on an LNG market where the bottom has literally fallen out,” says Klamath County landowner Deb Evans. “There is not one single LNG customer in place to warrant any further shareholder investment. FERC is required to examine whether Pacific Connector has any commitments for firm service in place and they do not.”

Stacey McLaughlin whose property would be crossed by a mile of the proposed pipeline agrees. “Forcing landowners to live under another decade of uncertainty when Pacific Connector has been unwilling to invest its own funds in securing the necessary easements is irrational and unjust punishment for the people who have already put their lives on hold for more than 10 years. FERC does not have a legal basis for giving the power of eminent domain to a project that would have a major impact on landowners and where there is no evidence it’s even viable.”

Evidence of LNG market crash

In their legal filing to FERC, landowners submitted evidence of the LNG market crash with recent energy industry news headlines such as: ‘Asian LNG price faces steep fall’, ‘Asian LNG Prices Expected to Sink as Low as US$4 in Ugly Market’, ‘LNG Bust Could Last For Years’, and ‘Most US LNG projects won’t cross the finish line, new study says’.

FERC’s own data shows recent LNG prices in Japan and South Korea were just US$6.78 per million Btu. This is 30% below US$11 million Btu, publicly named by Jordan Cove’s main investor many months ago as a price that would make LNG export from the Coos Bay site to Japan viable.

Edited from source by Stephanie Roker

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