Prospects look dimmer for LNG terminal

A liquefied natural gas terminal on Coos Bay looks less likely, after last week's announcement that developers would focus on exports rather than imports. What's more, some local residents who supported an import terminal may lack the stomach for an export facility.

Until recently, developers of the Jordan Cove Energy Project have pooh-poohed the idea of exporting gas. Now that underground hydraulic fracturing is unleashing cheap Rocky Mountain gas, Jordan Cove is eating those words.

Whatever direction the gas flows, a terminal would bring economic benefit to the Bay Area. Legally and politically, however, an export terminal is far different from an import facility.

Connecting Coos Bay to all that Wyoming gas requires stretching the Pacific Connector Pipeline across many miles of private property. That task probably would require the condemnation authority of eminent domain. Acquiring that authority may be a challenge.

Using eminent domain for a private project requires developers to prove the project serves 'public convenience and necessity." Importing energy meets those criteria. But how does the American public benefit from shipping U.S. gas overseas?

Developers can argue that exports create jobs -- potentially dozens in the Bay Area. They may even argue that broadening the market for U.S. natural gas will create an incentive for drilling. But it's a weak case, especially if exporting gas raises prices for American consumers.

The idea of condemning private land for an export pipeline will make Jordan Cove even more controversial than it already is. Conservatives and liberals find common ground in defending the rights of property owners against profit-seeking developers.

The Jordan Cove developers consistently have emphasized the long-term nature of their strategy. In the long term, markets change, and so do laws and politics. At the moment, though, Jordan Cove's future seems to be receding over the horizon.

Posted in Editorial on Monday, September 26, 2011 11:00 am | Tags: Liquefied Natural Gas, Lng, Coos Bay, Jordan Cove Energy, Eminent Domain

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