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U.S. OKs Natural Gas Export Project Backed by Colorado Industry, but Hurdles Remain

Source: Denver Business Journal, July 8, 2020

A proposed natural gas project in Oregon received federal approval this week for exports that could connect Asia and Colorado natural gas fields.

But the stumbles of other major pipeline projects elsewhere in the country show the difficulties that remain for the Jordan Cove project on Oregon’s coast as environmentalists push back against building new fossil fuel infrastructure.

U.S. Energy Secretary Dan Brouillette signed an export license Monday allowing 1.08 billion cubic feet of liquified natural gas to be exported per day from the project proposed at Coos Bay, Oregon.

The Jordan Cove export terminals, proposed by Canada’s Pembina Pipeline Corp., would connect to pipelines carrying natural gas from under the Piceance Basin in northwestern Colorado, the Uintah Basin of northeastern Utah, and from Wyoming to fill ocean-going tankers.

The coastal liquified natural gas terminals and its associated pipeline in Oregon is proposed to link to the existing the existing, 610-mile Ruby natural gas pipeline stretching from southwest Wyoming to southern Oregon.

The idea has been explored for nearly two decades and has drawn the backing of groups hoping it would unlock Asian export markets for natural gas in the Rockies. But Jordan Cove still faces stiff opposition at the state level in Oregon, including lawsuits from landowners, which means the export terminal is likely still a long way from being built.

“It’s been a hard project from the start,” said Matt Lewis, senior director of East Daley Capital, a Centennial-based oil and gas analysis firm focused on the pipeline industry. “It’s a tough sell in the Pacific Northwest.”

Other U.S. pipeline projects hit hurdles this week, illustrating the difficulty of building fossil fuel infrastructure.

This week, Dominion Energy and Duke Energy canceled plans to build the Atlantic Coast Pipeline, an East Coast natural gas project the energy companies pursued for years.

 

Environmental opposition, especially to the pipeline route’s river crossings, hamstrung the pipeline project to the point investors decided not to pursue it after years of fighting for it.

Closer to Colorado, a court order this week ordered a shutdown of the Dakota Access Pipeline, which carries Canadian oil and crude from the Bakken oilfields of North Dakota, saying its permitting lacked sufficient environmental information.

The legal developments show just how difficult pipeline projects are to complete in states where public opposition is organized.

“It’s a really challenging permitting environment,” Lewis said.

Environmental groups have successfully found permitting mistakes and used that to draw out state-level opposition to pipeline proposals, and that sort of opposition is likely to keep Jordan Cove’s development tied up in Oregon, he said.

Governments and industry groups from Wyoming, Utah, northwest Colorado counties, and the Ute Indian Tribe and others jointly push for the regional natural gas export project in the hope of unlocking new markets for the massive natural gas reserves in the region.

The Western States and Tribal Nations Natural Gas Initiative, applauded The DOE’s license approval Monday, calling it an important milestone for developing the quickest route to export markets in China, Taiwan, South Korea and other countries.

The export opportunity represents decades worth of jobs and tax revenue for local governments and tribes across a swath of the West, said Andrew Browning, president of the WSTN initiative.

Northwest Colorado’s Piceance Basin is home to underground shale formations holding 66 trillion cubic feet of recoverable natural gas, making it the second-largest recoverable natural gas deposit in the nation, according to the U.S. Geological Survey.Colorado Gov. Jared Polis’ administration last year withdrew state support and involvement in regional groups backing Jordan Cove, switching to a stance of being neutral about the project and saying that renewable energy development is preferable to building infrastructure for fossil fuels.

Recognizing the obstacles faced at Jordan Cove, the WSTN group has also backs a project on Mexico’s Pacific Coast that’s seen an other potential route for Colorado and Utah natural gas. There is less existing pipeline infrastructure linking Colorado natural gas wells and the proposed LNG terminal site on Mexico’s Baja Peninsula.

Ahead of a meeting between U.S. President Donald Trump and Mexico President Andres Manuel Lopez Obrador scheduled for this week, members of the initiative signed a letter urging Mexico approve the Sempra LNG and IEnova’s Energía Costa Azul LNG project. Governors of Utah, New Mexico and Wyoming, along with Luke Duncan, Ute Indian Tribe chairman, all signed the letter of support for the project.