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Who knows where the gas will go?
Natural gas pipelines irk landowners in their paths while raising tensions
November 27, 2007
The Daily Astorian
Birkenfeld resident Marc Auerbach built his 800-square-foot home for maximum energy efficiency using salvage materials, superinsulation, solar panels and a recycled rainwater system. He doesn't use natural gas at all.
But he could be getting a whole lot of it - flowing through a 3-foot-wide pipeline across his 60-acre property - if the proposed Palomar Gas Transmission pipeline is built by TransCanada National Corp. and Northwest Natural.
Since he bought the land in 2002, Auerbach has cleared 11,000 pounds of scrap metal, planted 2,800 trees, started a hay crop and built his eco-friendly house, which he finished in 2005. The thought of a fossil fuel pipeline - of all things - tearing through the property has put him on the warpath.
"I'm the last person who needs liquefied natural gas," he said.
The Palomar pipeline has raised tensions in Clatsop County because of its ties to the Bradwood Landing liquefied natural gas project, the front-runner of the three LNG terminals proposed in Oregon. It's also raised questions about the federal approval process, because a competing LNG company, Oregon LNG, has proposed a similar pipeline to Palomar - in some places crossing the very same properties - that would deliver gas from its LNG terminal in Warrenton.
There are two leading LNG terminal proposals in Clatsop County: One in Warrenton on the Skipanon Peninsula and another at Bradwood, 20 miles east of Astoria. Now, there are also three pipeline proposals, two of which traverse the county on their way toward the Northwest Natural gas hub in Molalla.
With pipeline routes constantly shifting and companies ultimately relying on eminent domain rules to push their projects through private property, landowners are left wondering what they can do to protect their investments.
"This is a once-in-a-lifetime event," said Auerbach. "It's not like we have a team of lawyers and resources at our disposal."
Last week, Auerbach started the Northwest Property Rights Coalition to fight the use of eminent domain in the federal pipeline siting process. The group already has 50 members.
The Palomar connection
The main Palomar line would run through central Oregon, connecting the TransCanada line in Madras with the NW Natural line in Molalla and helping both companies distribute gas more competitively.
The segment of pipeline that would cut through Auerbach's property stretches north from Molalla through eastern Clatsop County, mowing down 330 acres of the Clatsop State Forest along the way. But Palomar officials say that segment will only go forward if the Bradwood Landing LNG terminal is built.
That contingency raises the stakes for the Clatsop County Board of Commissioners, which is in the process of deciding whether to allow land-use changes to permit the Bradwood Landing terminal. Though Bradwood Landing developer NorthernStar Natural Gas Co. has proposed its own pipeline running northeast from the terminal to the Williams Northwest Pipeline in Kelso, Wash., the company also has an agreement with Palomar to send gas south to the Northwest Natural hub in Molalla.
In a written response, Palomar project manager Henry Morse Jr. said his pipeline will create "a second path for market access" for Bradwood's gas, making it "available in other markets" if it's not "consumed" in the Northwest.
Auerbach said the Palomar project has "removed the fig leaf" from the Bradwood project and revealed the company's intentions to send gas to California, where other LNG projects have been ousted and gas customers could be willing to pay higher prices.
"We don't want to be California's gas tank," he said.
NorthernStar officials have repeatedly denied that the Bradwood gas will go to California. But NorthernStar Vice President of Development Gary Coppedge has said ultimately the market, not his company, controls where the gas goes. At the Clatsop County Commission hearing last week, NorthernStar President Paul Soanes said the company can use the Palomar line "if our customers feel that makes sense."
Where will the gas go?
Joe Desmond, NorthernStar vice president of external affairs, said the Bradwood project doesn't need the Palomar gas line because it has its own pipeline - that hooks into the Williams Northwest system.
But Williams Northwest Pipeline spokeswoman Michele Swaner said her company doesn't have room for all the gas NorthernStar plans to import to its Bradwood facility.
"It does make sense that they signed up on Palomar," she said. "Physically, we're capable of receiving it, but it would take the place ... of all the other gas supplies flowing in that system both north and south. We have long-term agreements in place. ...We're unlikely to disrupt the relationship we already have with our customers right now."
Even with the projected declines in supply from Canada and the Rocky Mountains, she said, there's not enough demand for gas in Oregon and Washington to absorb the full volume from Bradwood. But she said there is demand for that volume in California. Williams has a stake in a different LNG pipeline that would run east from the proposed Jordan Cove LNG terminal in Coos Bay to meet the Williams pipeline south of Roseburg, near the California border.
Peter Hansen, chief executive officer of the competing LNG development company, Oregon LNG, said his company had to change its pipeline route because - even without gas from Bradwood Landing - the Williams pipeline at Kelso was full. Oregon LNG now plans to run a 117-mile pipeline similar to the Palomar line down to Northwest Natural's Molalla hub.
"That's why Bradwood's doing the Palomar pipeline, because they have recognized the Williams pipeline doesn't have room," Hansen said.
Desmond denied implications that his company needs the Palomar line to get by. He said the Bradwood terminal would still be worth the investment even if it doesn't operate at its full send-out capacity of 1.3 billion cubic feet of gas per day. It only needs to send out "enough gas to justify the operation of the terminal," he said.
Other sources of natural gas will be available, he said, but LNG will be cheaper and thus could attract more customers on the Williams line.
If LNG could not be imported at below market price for the region, he said, "it wouldn't come here."
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- By CASSANDRA PROFITA
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