North America LNG / LPG News
Ore. Utility Regulator's Memo Heartens LNG Proponents
by Ted Sickinger The Oregonian, Portland, Ore.
June 13, 2008
State utility regulators have told Gov. Ted Kulongoski that it
would be worthwhile to import liquefied natural gas to Oregon, contradicting
an earlier report by the state Department of Energy and giving heart to
backers of three proposals to build LNG terminals in the region.
The memo from the Oregon Public Utility Commission was drafted partly in
consultation with industry players in the projects -- a fact that drew
skepticism from LNG opponents.
Lee Beyer, chairman of the Oregon Public Utility Commission, delivered a
five-page memo to the governor on May 30 asserting that liquefied natural gas
terminals in Oregon would help meet the region's increasing demand for natural
Though LNG would likely be priced the same as domestic gas, Beyer wrote,
some savings were possible from LNG as a result of lower transportation costs.
The memo's conclusions were tempered, but they contrasted with those of
the energy department, which told the governor in early May that the state
doesn't need LNG and could meet its demand for natural gas more economically
and with less pollution by importing more gas from the Rockies.
NorthernStar Natural Gas Inc., which is hoping for federal approval of
its proposed Bradwood Landing LNG terminal later this year, applauded Beyer's
entry into the fight over the terminals. NorthernStar spokesman Joe Desmond
said he was "not surprised, but certainly comforted, by the fact that he has
validated all we've been saying."
Meanwhile, an environmental group scoffed at the memo. "It looked like
NorthernStar wrote it," said Brent Foster of Columbia Riverkeeper.
Beyer noted early in his memo that the commission's conclusions were
partly shaped by consultations with Northwest Natural Gas Inc., the region's
largest gas utility, and Wood MacKenzie, an energy industry consultant. NW
Natural has a substantial financial interest in pipelines and gas storage that
would serve the Bradwood LNG terminal, and Wood MacKenzie is one of many
consultants that NorthernStar has hired to make its case for the terminal.
Mike Carrier, the governor's natural resource policy director, said the
governor's office was looking for alternative perspectives to the Department
of Energy study in light of unsolicited feedback about its accuracy from
entities such as NorthernStar.
Carrier said he was aware of Northwest Natural's financial interest in
the terminal and Wood MacKenize's work for NorthernStar, though he said Wood
MacKenzie was generally seen as a reliable source in the energy industry.
"One of the problematic parts of all this is . . . there's not a lot of
nonindustry analysis going on," Carrier said.
Beyer also noted in the memo that industry analysts' conclusions may
prove right or wrong -- widely so, given rapidly changing industry conditions.
But he said the commission was primarily motivated by the desire to see rate
stability and reliability. Calamities aside, he said, natural gas will likely
be available for the foreseeable future. "The question is," he said, "at what
The commission concluded that natural gas demand would continue to grow
for the next two decades, that prices would rise as domestic supplies
tightened and that proposed new pipelines from the Rockies to Oregon are
"While there is no assurance that an LNG terminal will ever be built, its
presence would help in meeting demand even though it would likely be at the
same price as domestic gas. There may be some small savings because of lower
transportation costs," the memo concluded.
Copyright (c) 2008, The Oregonian, Portland, Ore. Distributed by McClatchy-Tribune Information Services.
Bradwood Landing LNG
NorthernStar Natural Gas, Inc.
Bradwood, OR United States