Why LNG on the Oregon Coast?

I have been puzzling about the urgent drive by the Bush administration to build Liquified Natural Gas (LNG) terminals on the Oregon coast — in environmentally sensitive estuaries in Clatsop and Coos counties. (http://www.tdn.com/articles/2007/11/24/area_news/doc4747d5488da45921963651.txt)

It would seem that Oregon itself does not need the increased supply of LNG so it big rush is certainly not to meet local demand. The explanation that California market needs the increased supply makes a certain amount of sense but that state has blocked the siting of LNG terminals on their coast so the need must not be all that urgent.

So why the push for LNG terminals in Oregon, despite local opposition from fishermen and environmentalists and negative reports from Oregon state agencies charged with assessing the pluses and minuses of the proposed project? Why would FERC the federal agency in charge with siting of energy facilities like the LNG terminals be so anxious to ride roughshod over the state to approve these facilities?

The answer might well lie elsewhere, outside Oregon.

First, we have the Peru Free Trade treaty that was rushed through with great fanfare this month. When this agreement was first mentioned in the news I confess to wondering “Why Peru?” It didn’t quite make sense that of all the countries South of the border Peru was the one that the U.S. needed to have a trade agreement with.

Then, as I was researching another subject, I stumbled upon a possible explanation.

Hunt Oil Company, one of George Bush’s large financial backers since his days as governor of Texas, has a massive natural gas project — in Peru!

According to a November, 2005 article in Salon,

“Among Hunt’s biggest projects is the controversial $2.6 billion Camisea liquefied natural gas project in Peru, which will soon begin delivering gas to markets on the West Coast of the U.S.”[8]


Obviously, if Hunt Oil (or its partners) wants to deliver LNG to the the West Coast of the United State, terminals will need to be built to receive it. California was the first choice for the new LNG terminals but that state was successful in blocking the siting of LNG facilities on its coast. So then they looked northward to Oregon. And to prevent the pesky locals from interfering with their plans like the Californians had, the siting authority for LNG terminals was taken away from the states and jurisdiction was placed in the hands of compliant FERC. That way those who needed terminals built would get them, irregardless of any other considerations.

This rush to build LNG terminals — and pipelines over much of Oregon’s environmentally sensitive landscape — is particularly disturbing in light of the Hunt Oil’s track record in Peru. Amazon Watch has this to say about the Camisea LNG project:

Peru’s Camisea Gas Project is arguably the most damaging project in the Amazon Basin at the time of writing. Located in the remote Lower Urubamba Basin in the south-eastern Peruvian Amazon, the $1.6 billion project includes two pipelines to the Peruvian coast, cutting through an Amazon biodiversity hotspot described by scientists as “the last place on earth” to drill for fossil fuels… In the first 18 months after it became operational in August 2004, the Camisea pipeline, which runs from the Amazon, over the Andes, to the Pacific Coast, has ruptured four times, with at least three major spills. This appalling record is highly unusual for such a pipeline and comes despite repeated assurances from the downstream consortium and the Inter-American Development Bank that no such problems would occur. According to a February 2006 independent report by non-profit engineering consultancy E-Tech International, the pipeline was constructed by unqualified and untrained welders using corroded piping and rushing to avoid onerous late completion fees that would have totalled $90 million. http://www.sourcewatch.org/index.php?title=Hunt_Oil_Company#_note-7

The spills were so frequent that Peru’s Ministry of Energy and Mines and the country’s energy regulator to conduct an emergency technical review of the pipeline in December 2005. And indigenous groups responded to the spills by blockading the Urubamba River.

If, indeed, Hunt Oil is a player in the proposed LNG terminals on the Oregon coast, this track record in Peru is cause for concern. However, even if Hunt Oil is not directly involved, there is no reason to think that those who are foisting the LNG terminals and accompanying pipelines on Oregon will show any great care for the state’s environment. So far, the siting in the Columbia estuary, for instance, does not give cause for reassurance.

Explore posts in the same categories: cronyism, FERC, Hunt Oil, LNG terminals, Peru Free Trade Agreement, politics

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