LNG Opponents Sue Energy Commission Over Mailing List

By Rob Manning

Portland, OR August 8, 2008 2:10 p.m.

Opponents of a liquefied natural gas terminal proposed on the Columbia River are suing federal energy regulators – over a mailing list.

The Federal Energy Regulatory Commission rejected a Freedom of Information Act request sent in January.

It asked for the names and addresses of people FERC is communicating with about a proposed natural gas pipeline between a possible LNG terminal and existing pipelines in central Oregon.

Dan Serres is with Columbia Riverkeeper, one of the groups behind the lawsuit.

Dan Serres: “Their direct response to the FOIA request was ‘we don’t have a list’ despite transcripts from public meetings indicating that they do have a list and that they’re developing this list all the time.”

Serres says his group would use the mailing list as a starting point, to ensure that people in the vicinity of the proposed pipe know about the project.

Supporters of the LNG terminal say that the pipeline route is no secret -- and they point to a map room set up in Portland, where people can see it.

The suit was filed in federal district court in Oregon.

U.S. regulators give environmental nod to Bradwood Landing LNG terminal

By The Associated Press

June 6, 2008

PORTLAND — Federal regulators have given the environmental go-ahead for a proposed liquefied natural gas terminal near Astoria.

The Federal Energy Regulatory Commission released its environmental impact statement on the controversial Bradwood Landing Project on Friday, saying it had “limited adverse environmental impacts” but set out 110 recommendations it should meet to mitigate its effects.

The LNG terminal would import, store and process supercooled liquefied natural gas for movement through pipelines to points across the country. The backers of the project, Houston-based NorthernStar Natural Gas, need the federal approval to move forward on the $700 million project.

It’s one of three proposed LNG terminals in Oregon that has many critics concerned about the need and environmental impact on the state.

Study: U.S. has up to 50% more natural gas than once thought

By Paul Davidson, USA TODAY

U.S. natural gas reserves are far more plentiful than previously estimated, says an industry study being released today — a discovery that heralds a potential remedy to the energy crisis.

The report says the U.S. has up to 50% more natural gas reserves than earlier projections because of higher-than-expected yields from 22 shale formations in 20 states.

The industry says the findings should prod policymakers to provide incentives to wean the nation from $4 gasoline and move to compressed natural gas as a standard fuel in many cars and trucks.

"Everyone knows natural gas is clean and made in America," says Aubrey McLendon, chairman and CEO of Chesapeake Energy, the largest natural gas producer. "The only question was is there enough to go around to run cars and trucks. This proves that there's plenty of natural gas."

The U.S. has enough natural gas resources to last up to 118 years, or 2,247 trillion cubic feet (Tcf), says the study by Navigant Consulting for the American Clean Skies Foundation. That group is largely funded by natural gas companies.

The Potential Gas Committee, an independent research group, estimated in 2006 the U.S. has 1,530 Tcf of gas, an 82-year supply.

The increase stems from greater production in the Marcellus Shale in the Appalachians and the Haynesville Shale in Louisiana and Texas, says Kenneth Medlock, an economics professor at Rice University who worked on the Navigant study.

In recent years new drilling techniques have allowed companies to extract gas deeply embedded in formations of shale rock. The new study is based on estimates by Navigant, state records and a survey of more than 60 large natural-gas producers.

John Curtis, the committee's executive director, would not comment on the new estimates. But he questioned the new report's reliance on his group's study, which did not estimate shale reserves, to reach its higher projections.

Medlock says actual resources are likely less than the 118-year supply estimated by industry but much more than the current 82-year projection.

Oil tycoon T. Boone Pickens recently unveiled a plan to replace 20% of natural gas-fired power plants with wind energy and divert that gas to cars. But McClendon says gas is so abundant there's no need to channel it from power plants. Yet to jump-start the industry, he says, Washington must provide incentives to automakers, service stations and consumers.

http://www.usatoday.com/money/industries/energy/2008-07-29-natural-gas_N.htm

Wyden asks feds to slow LNG decision

Gas terminal - State officials fear regulators will bypass a public review of the plan

Wednesday, August 06, 2008

TED SICKINGER The Oregonian

Sen. Ron Wyden, D-Ore., this week asked federal energy regulators to delay any "rash" decision on a proposed liquefied natural gas terminal on the Columbia River.

State officials and other observers think the Federal Energy Regulatory Commission is about to approve the controversial Bradwood Landing LNG terminal, based on receipt of other state and federal permits.

Commissioners were slated to discuss the project at their July 17 public meeting, but it was removed from the agenda at the last minute.

FERC has issued its final environmental review of the project, and state officials fear the agency has already written its decision and is about to issue a decision without additional public notice or input.

"Before FERC takes such a rash action, I again ask the commission to withhold action on this project until the outstanding environmental and economic issues are fully addressed in public meeting," Wyden wrote in a letter Monday.

Wyden's letter echoes one two weeks ago from Congressman David Wu.

Gov. Ted Kulongoski also has asked FERC to redo what he believes is a flawed environmental analysis of the project. FERC has refused, saying it would unnecessarily delay the project.

Wyden has sponsored legislation to return licensing authority for LNG terminals to state authorities, which was pre-empted by federal authorities with the passage of the Energy Policy Act of 2005.

He says he wants to blow the whistle this fall on FERC's "outrageous behavior."

How much support his legislation has is unclear, particularly in an environment of rising energy prices.

Kulongoski dubs environmental analysis of LNG plan 'fatally flawed,' urges FERC to reconsider

Posted by Ted Sickinger, The Oregonian July 11, 2008 13:35PM

Gov. Ted Kulongoski told federal energy regulators today that their final environmental review of a proposed liquefied natural gas terminal on the Columbia River was "fatally flawed and legally deficient," and ought to be withdrawn.

The Federal Energy Regulatory Commission issued its final environmental impact statement on the Bradwood Landing LNG terminal in June, and may vote as early as next week to conditionally approve the project's license application.

In a letter sent today to FERC, Kulongoski urged the commissioners not to issue their decision on the project, to withdraw the final environmental review, and to issue a revised review to be reopened to public comment.

Kulongoski said the overall level of detail in the final review was inadequate, and that much of it contained only general information about environmental and resource effects. Furthermore, he said, FERC staff had not proposed enforceable conditions to address concerns raised by state natural resource agencies.

Kulongoski cited a litany of flaws with FERC's analysis, but it's unclear whether the agency will pay any heed. FERC ignored a similar request for a new environmental review that Kulongoski made in May.

The state does have the power to block the facility if its concerns aren't met, including required state-issued permits under the Clean Air, Clean Water and Coastal Zone Management Acts.

Kulongoski told FERC today that the agency shouldn't issue a license until those reviews are completed.

FERC bumps Bradwood LNG project from agenda

By Tony Lystra

The Daily News

July 15, 2008

The Federal Energy Regulatory Commission announced Tuesday morning it has removed from its Thursday’s agenda NorthernStar Natural Gas Inc.’s proposal to build a liquefied natural gas terminal on the Columbia River at Bradwood, Ore.

The commission had been expected to discuss plans for the terminal, and there was speculation the agency would decide on a permit for the project.

But a FERC spokeswoman said Tuesday that the commission has decided to hold off while it reviews letters and comments that citizens, government agencies and lawmakers have filed in the past month.

“They’re just taking time to review everything before they make a decision,” FERC spokeswoman Tamara Young-Allen said.

Late last week, Oregon Gov. Ted Kulongoski sent a letter to FERC saying the agency’s final environmental impact statement for the project, issued last month, is “fatally flawed and legally deficient.” Kulongoski asked the agency to withdraw the document and issue a more thorough version.

Behind the fight for an Oregon LNG site

Two Texas businessmen put money and muscle

Sunday, May 04, 2008

TED SICKINGER

The Oregonian Staff

HOUSTON -- In this city of energy dreams, where speculative hustle is a time-honored enterprise, Si Garrett prides himself on delivering concrete results.

Big, complex energy projects. Environmentally and politically sensitive projects. Profitable projects.

Garrett, a rangy 61-year-old with slicked-back gray hair, an Alabama drawl and a bottomless trove of war stories, spent 11 years on active duty in the Navy, helped commission two nuclear submarines and served as chief engineer on a third. As a corporate warrior over the next two decades, he traveled the globe for a succession of energy companies, building power plants from the Amazon to Manhattan.

Now in the twilight of his career, Garrett wants to build a terminal along the Columbia River to import liquefied natural gas. The project is a potential jackpot, one that could secure a regional monopoly to import gas from Asia, Russia or Australia -- and influence how much Northwest consumers pay for gas.

Yet Bradwood Landing also is a huge gamble. Just to secure permits, Garrett has tapped an investment fund for $100 million, recruited a hand-picked team of specialists and hired a legion of consultants. Moreover, Bradwood and its little-known backers have become lightning rods in Oregon, raising their stakes still higher.

After four years and $33 million, the project lacks basic approvals. Opposition has mounted -- from landowners, municipalities, industry groups, environmental and property-rights activists, and state politicians who could halt the terminal.

Some industry analysts question its prospects, too. Global demand for LNG far surpasses supply. As natural gas prices skyrocket -- in some cases to double U.S. prices -- cargoes are diverting from the U.S. and Europe to higher bidders in Asia. "The banks aren't going to provide construction financing without security, and that security is supply," industry consultant Andrew Flower says.

Garrett is unfazed. By the time Bradwood would open in 2012, he contends, supply will be ample. Financing, he says, is already in place. Though he admits Bradwood is the biggest challenge of his career, he doesn't foresee a dry well.

"I never had the luxury of having enough money to fail at a project," Garrett says.

LNG fever

The way Garrett tells it, he and his partner at NorthernStar Natural Gas Inc., 40-year-old Australian Paul Soanes, bootstrapped their startup in the classic fashion: two guys in a room above the garage betting their life savings on a vision.

Garrett's is a fine garage, mind you -- attached to the 7,000-square-foot, five-bedroom, seven-bath brick house that he shares with his wife and pet parrot in west Houston's leafy Tanglewood neighborhood.

Garrett and Soanes, moreover, are no industry fledglings. They've drilled for gas, built power plants and laid pipeline in Indonesia, Australia, China, South Korea, Hungary, Mexico, Brazil and the United Kingdom.

For all that, the two have never built an LNG terminal on their own -- but not for lack of trying.

LNG is natural gas that overseas producers supercool into a condensed liquid for long-haul shipment on tankers. Terminals here then offload and reheat the gas for distribution via pipeline.

With rising competition for domestic and Canadian supplies, many experts say, imported gas will become an ever-more-important piece of the U.S. supply. And since the West Coast has no existing LNG terminals, the horse race to build the first has become a high-stakes sprint during the past decade.

Garrett and Soanes have backed a series of projects as the LNG push has swept up the West Coast. They ran CMS Energy's joint venture to build an LNG terminal in Baja, Mexico. The terminal, now wholly owned by Sempra Energy, accepted its first cargo last month.

A financial meltdown at CMS forced the company out of the venture before it was built, but Garrett and Soanes remained bent on LNG.

In their first two years on their own, the partners say, they spent $1 million each to study dozens of West Coast sites. Even now, NorthernStar is pursuing an LNG terminal at an old oil platform off the California coast.

But Bradwood, they admit, is their big bet. Among West Coast proposals, it is also leading the regulatory race -- for now.

"The first day I saw Bradwood, I fell in love with it," Soanes says.

Confederation of veterans

NorthernStar's headquarters in Houston -- the 17th story of a downtown high-rise lined with dark wood paneling and Oriental rugs -- projects substance and success.

Yet beyond the oil paintings, the Asian antiques, and the conference room fit for a Fortune 500 behemoth, the space is mostly vacant, and NorthernStar is little more than a handful of project specialists.

Garrett and Soanes say they drew most of NorthernStar's expertise from connections they've made over the past 20 years.

Gerald Lindner, NorthernStar's chairman, was Garrett's boss 20 years ago. He runs an energy company of his own and introduced NorthernStar to private equity fund Matlin Patterson. Established by veterans of Credit Suisse, the firm specializes in high-risk distressed investments. Matlin funded initial work on Bradwood, then raised $100 million for NorthernStar in 2006.

David Glessner, the company's chief engineer, helped develop LNG projects for Enron.

Soanes, recently naturalized, has worked on and off with Garrett for 11 years. He recruited Joe Desmond, former energy czar for California Gov. Arnold Schwarzenegger and veteran of the Golden State's LNG wars. Environmentalists had no love for Desmond's industry leanings, and Democrats blocked his confirmation as director of the state energy commission. NorthernStar hired him for public and government relations.

The face of NorthernStar in Oregon is Gary Coppedge, an agricultural economist from Las Cruces, N.M. Coppedge helped land permits for the Baja project. Though NorthernStar's Web site lists him as senior vice president for development, company securities filings describe him as a consultant making $34,000 a month to ride herd on Bradwood's permitting drive. If he succeeds, the filings say, he scores a bonus of up to $2 million. (NorthernStar says Coppedge's pay package has been adjusted downward substantially.)

In the meantime, Coppedge is running his own consulting firm, International Business Connections, and moonlighting as president of Cutuco Energy, a company backing an LNG terminal proposal in El Salvador.

Garrett and Soanes, each of whom takes a $600,000 salary at NorthernStar, have their own side projects. Both are partners in Renewable Biofuels Inc., a Texas company that shares office space with NorthernStar and is building the nation's second-largest biodiesel plant.

The multiproject range makes some Oregon critics wonder whether NorthernStar is in Bradwood only to flip the project to a better-financed supplier or experienced terminal operator, should regulators clear it.

The partners insist not.

"We're going to be a participant in the community and a good citizen for the next 40 years," Garrett says.

Visitors from Texas NorthernStar is hardly the first Texas outfit to swoop into Oregon's energy market making promises to consumers.

Houston-based Enron took a disastrous turn as owner of Portland General Electric, promising rate economies, then fueling the West Coast energy crisis.

Next came private equity giant Texas Pacific Group, which tried to buy PGE out of Enron's bankruptcy. The buyout failed, partly because locals perceived the company as a carpetbagger looking to make a quick buck.

NorthernStar has worked hard to avoid that image, spending heavily to promote "clean energy," "good jobs" and "good for the Columbia" messages.

The company first hired The Gallatin Group (now Gallatin Public Affairs), an influential Oregon lobbying firm, to mount a public relations campaign. In 2006, it replaced that firm with PR powerhouse Edelman.

Early on, NorthernStar opened an Astoria storefront, began pumping $400,000 in donations into community groups and commissioned a study suggesting Bradwood would cut regional gas prices.

Meanwhile, NorthernStar's technical staff and consultants buried federal, state and local regulators in data about the project.

So far, results have been promising. In mid-April, the Clatsop County Board of Commissioners approved zoning variances, overriding its consultant and staff.

"That was a huge victory for NorthernStar," Coppedge says. "Technically, we don't have to have local approval. But I'm a firm believer that if you don't have local support, you don't have a project."

Outside the county commission, however, local support is still questionable. Opponents have appealed the variances to a state appeals board and proposed a September ballot referendum to limit NorthernStar's ability to run pipeline on county land. NorthernStar has challenged the ballot measure.

Regardless, the firm still needs federal and state approvals.

Though federal regulators have denied a license for just one LNG site nationwide, NorthernStar wants to make sure Bradwood is not the second. In Washington, D.C., the company employs energy law firm Van Ness Feldman to make its case with the Federal Energy Regulatory Commission. It also has spent $600,000 with D.C. lobbying firms -- mostly, NorthernStar's Desmond says, to support the company's proposed terminal off California.

NorthernStar has become a top-10 lobbyist among private companies in Salem, where it spent $215,500 during the past two years. State reports don't specify how the money was spent. Desmond says it was for "basic legislative outreach."

NorthernStar also has hired Portland law firm Stoel Rives to make the case for Bradwood.

At NorthernStar's first meeting with Oregon's Division of Land Conservation and Development, executives showed up flanked by attorneys.

"We were like, 'Wow, that's an interesting approach,' " says Bob Bailey, manager of the agency's ocean and coastal division. "They were prepared for a legal battle from the start. We were hoping they would put as much effort into the environmental consultants as their legal team."

Garrett and Soanes say their approach to any project is the same: conduct detailed analysis upfront to identify "highest-risk issues" -- whether technical, commercial, environmental, political or legal -- and knock them out before spending big money.

So far, the company says, it has spent $33 million on Bradwood alone, not counting corporate expenses or the development of its California terminal. Garrett says NorthernStar has enough of its borrowed $100 million left to get Bradwood through permitting. But the project is already two years behind the original schedule, and he says the company may need more capital next year.

Stiffening resistance

For all NorthernStar's spending, it's not clear how many of Bradwood's potentially fatal risks have been eliminated.

Initially slow to galvanize, opposition recently has spread across the political spectrum to include environmental and property-rights advocates, vineyard and farm interests, Native tribes and fishermen.

For political leaders, Bradwood -- and pipelines proposed to serve it -- are hot issues. More and more municipalities oppose them. State agencies question their environmental safety and whether, for regulatory review, NorthernStar should separate the terminal from pipelines to carry its gas. Gov. Ted Kulongoski and state congressional delegates have gone to war with federal regulators over the projects.

Even presidential candidates Hillary Clinton and Barack Obama have jumped into the fray, arguing over who was first and most vocal in opposing federal licensing of LNG terminals.

Well-financed resolve

Garrett says he understands the opposition -- to a point.

"Some people are so emotionally opposed," he says, "that trying to discuss logic with them is probably a failed endeavor from the outset."

But Garrett says most Americans are in the dark about what it takes to turn on the lights. They consider power service an essential right but never look behind the curtain of its enormous infrastructure, he says.

That's why, Garrett says, NorthernStar spends so much time and money reaching out to those who will listen and answering regulators' concerns.

"Our investors have made it clear that there's plenty of money to devote to this," he says. "They're in this for the long haul."

Ted Sickinger: 503-22-8505; tedsickinger@news.oregonian.com

Port Westward Progress Report Highlights Port Meeting in Clatskanie

The Clatskanie Chief

March 6, 2008

by Deborah Steele Hazen

NorthernStar Reports on LNG, Considers Biodiesel

Si Garrett, chief executive officer of NorthernStar Natural Gas, the parent company of the Bradwood Landing LNG (liquefied natural gas) terminal, gave a report on that project.

Garrett said he expected to receive the FERC (Federal Energy Regulatory Commission) permits for the plant in eastern Clatsop County this summer, and believes the state permits will be completed in the fourth quarter of this year.

Garrett noted that NorthernStar had worked with POSH to make sure that the proposed pipeline route would not interfere with any of the projects or infrastructure at Port Westward. The pipeline from the proposed Bradwood Landing plant is planned to roughly parallel the Columbia River to Port Westward, where it will cross under the river and travel across Cowlitz County to connect with the Williams pipeline near I-5.

In his presentation Garrett stressed that safety is the company's highest priority, and "it's our job to cause no damage to the environment. I'm not going to say we're not going to cause any, but we spend a great deal of time and money minimalizing all of the environmental issues we have to deal with."

NorthernStar plans on "mitigating much more acreage than we are disturbing on the site," he said. The plan to purchase Svensen Island for a salmon enhancement project is the largest fish habitat improvement project on the Columbia River, he said.

"We hear a lot about the gas we're bringing in going to California," Garret said. "Almost none will. And, that's backed up by three independent studies."

He said the LNG ships are a "bit bigger" than the car carriers that currently transverse the river. The Coast Guard security zones will allow "all identifiable vessels" within the 500 yard security zone. The 200 yard safety zone around the ships while they are docked at Bradwood Landing will not interfere with traffic on the river or close to Clifton channel, where fishing will still be allowed, Garrett said. The security zone doesn't extend onto land, he stated, addressing another of the frequently asked questions.

The ships have double hulls and the LNG tank creates a third barrier. A number of years ago, Garrett said, a fully-loaded LNG ship ran into a sheer rock wall in the Straits of Gibraltar at 19 knots and didn't breach the LNG tanks.

Garrett described himself as a "logical environmentalist."

"You hear a lot about alternative energy. I am an environmentalist myself...I'd like to think we'd use renewables as much as possible. But for the next 10 to 12 years, natural gas is the most benign fuel," other than hydropower and wind, which cannot satisfy the Pacific Northwest's energy needs without supplementation from natural gas.

With alternative fuels in mind, Garrett said, NorthernStar is constructing a Renewable Bio-fuels plant near Beaumont, Texas, and is looking for a site in the Pacific Northwest.

Port Westward is one of the sites it is considering for a bio-fuels plant, Garrett said. The raw material would be soy or palm oil or beef tallow to begin with, he said. But, long term, the investment group is working on a thorn bush which produces an oil, and algae is another future bio-fuel source.

Garrett said he believes within the next three years the technology to use algae for bio-fuel will be available. Algae removes CO2 from the atmosphere, and the byproduct left-over from making bio-fuel can be used as a food supplement or livestock feed.