West Coast Natural Gas Coup
Markets reeled on Wednesday at the sign of turmoil in Washington, but some good news came out of Coos County, Oregon, where three-quarters of voters on Tuesday rejected a referendum seeking to block the Jordan Cove liquefied natural gas terminal and a connecting 231-mile pipeline.
Canadian-based Veresen has been working for more than a decade to develop the nation’s first West Coast terminal, which was conceived to import natural gas amid flagging North American production. Lo, advances in hydraulic fracturing have unlocked vast shale deposits, and U.S. natural gas production has surged by a third over the past decade. But prices have tumbled due to a supply glut and insufficient pipeline capacity, hurting producers and workers.
Jordan Cove would give producers in the Rocky Mountain gas fields access to fast-growing Asian markets, which in February made up a quarter of U.S. LNG exports. Half of Jordan Cove terminal’s capacity has been reserved by Japanese companies, and the project should make U.S. exports more competitive with those from Australia and the Middle East.
The $7.5 billion project would also provide significant economic benefits to a rural region suffering from government actions locking up public lands: 240 permanent positions and 4,000 construction jobs with pay that would average about $85,000 a year—more than double that of Coos County’s median household income.
A politicized Federal Energy Regulatory Commission (FERC) last year rejected Jordan Cove on the pretext that there was insufficient market demand or public benefit to justify harming landowners. Veresen is reapplying and hoping to get a fairer shake from a reconstituted commission. Last week President Trump nominated two Republicans to the commission, which now seats two Democrats. An estimated $50 billion in projects are on hold because the commission lacks a quorum.
National Economic Council director Gary Cohn last month said permitting an LNG export facility in the Northwest is a top Administration priority, and liberals are imploring Senate Democrats to stall the President’s FERC nominations to halt energy projects such as Jordan Cove. If Democrats play the delay game, President Trump might consider recess appointments.