A top adviser to President Trump on Thursday appeared to throw the administration’s support behind a controversial proposed liquefied natural gas terminal in Oregon that had been rejected by regulators during the Obama administration.
“The first thing we’re going to do is we’re going to permit an LNG export facility in the Northwest,” said Gary Cohn, director of the National Economic Council. “Just think of the transport time from the Northwest to Japan versus anywhere else. Then we’ve got to put facilities on the East Coast to get from the East Coast to Germany.”
“The one place we’re going to permit in the Northwest, it’s been turned down twice already,” Cohn said in comments at the Institute of International Finance, in which he called the opportunity for exporting liquefied natural gas “enormous.”
Although Cohn did not name a specific project, the White House confirmed Thursday that Cohn was referring to the proposed Jordan Cove LNG export terminal, which would be located in Oregon’s Port of Coos Bay. That’s where Veresen, the Calgary-based company whose subsidiary is proposing the project, wants to construct two 160,000-cubic-meter storage tanks and other facilities that would receive natural gas from a pipeline, compress it into a liquid for transport, and then pipe it out to tanker ships for sale abroad.
It isn’t clear what Cohn meant by saying that “we’re going to permit” the project, because final approval rests with the Federal Energy Regulatory Commission (FERC), an independent agency.
Yet Cohn’s remarks fit with a broader push in the Trump administration to permit more large energy infrastructure projects, such as the Keystone XL Pipeline.
FERC turned down Jordan Cove, as well as the proposed 232-mile Pacific Connector Gas Pipeline that would link to it, in a unanimous decision in March 2016. The agency found that the project would be “inconsistent with the public interest,” chiefly because the pipeline would have significant “adverse effects on landowners,” many of whom did not approve it and could have their properties disturbed or otherwise affected through eminent domain if it were to be built. Because the export terminal would not serve a purpose without the pipeline to connect to it, it was rejected as well.
FERC also rejected a subsequent request that the pipeline be reconsidered last December. However, the company promptly announced plans to refile, and in February — under the Trump administration — started that process.
The only other proposed LNG export terminal besides Jordan Cove to have been rejected by FERC was a project in Maine that was also terminated last year, according to agency spokesman Craig Cano.
Cohn met with Don Althoff, chief executive of Veresen, in March. Interviewed after that meeting, Althoff said the project would generate 4,000 construction jobs and 240 permanent jobs. He said the company was reapplying for the permit because “now we meet the requirements for public good.”
“I think what we got was the commitment to work with us to make sure that there was oversight for the federal groups that are going to be on the permitting process,” Althoff told Bloomberg after the meeting. “And I think that is going to be very important and very helpful.”
But none of this means that any future approval will necessarily go quickly. The commission has only two of its five seats occupied, and another of those is expected to become vacant this summer, which means it cannot achieve a quorum to vote on projects. Moreover, FERC appointments require Senate confirmation.
Veresen did not immediately respond to requests for comment.
Liquefied natural gas is natural gas that has been converted to a liquid form, rendering it more compact and allowing it to be transported more easily. Because the United States has recently become such a major natural gas producer, thanks to the fracking boom, the opportunity to export that gas to markets around the world has drawn growing attention. This may explain Cohn’s contention that exporting LNG presents an “enormous” opportunity for the United States.
But at the same time, such projects have often garnered considerable environmental resistance, especially in the Pacific Northwest. The Sierra Club, Friends of Living Oregon Waters, Columbia Riverkeeper and many other groups had objected to the Jordan Cove project on environmental and other grounds.
Jonathon Berman, a spokesman for the Sierra Club, said the group had opposed the project because it would lead to more fracking for natural gas, and also because of its environmental impacts.
Just last year, Cheniere Energy, which operates a major LNG facility in coastal Louisiana, became the first U.S. LNG exporting company in the Lower 48 states in decades. But FERC shows many additional pending applications for the Gulf Coast. It doesn’t, however, show any for the East Coast or Pacific Northwest.
Despite Cohn’s enthusiasm, it isn’t clear just how big the market will ultimately be for exported U.S. natural gas. While the United States is late to the game, multiple other countries, led by Qatar, export large quantities. And the Henry Hub price of natural gas has risen over the past year from a low of $1.56 per million British thermal units in March 2016 to $3.09 on Monday, increasing its price for sale abroad as well as domestically.
Steven Mufson contributed to this report.