Jordan Cove LNG: The Empire Strikes Back

May 18, 2017

By Ted Gleichman

We have complex Jordan Cove news, so I will overstrain this Star Wars metaphor right from the get-go.

Proposed Jordan Cove Construction Site-OPB-EarthFix

View of the proposed Jordan Cove LNG export terminal site on Coos Bay.
Credit: Jes Burns, Oregon Public Broadcasting / EarthFix

We all remember the temporary victories of last year: the valiant Rebel fighters in Southern Oregon brought down the Empire’s local Death Star: the Jordan Cove liquefied natural gas (LNG) export terminal plan and the fracked-gas Pacific Connector pipeline necessary to serve it.

Technically, the Rebels persuaded a key Empire directorate, the Federal Energy Regulatory Commission (FERC), to go rogue briefly, for the first time ever on LNG, to deny federal permits to the Death Star (twice).

Then Darth Vader was anointed to take over the Empire, in a structural coup that displaced the assumed new Empress (even though she was supported by more of the Empire’s electorate). And FERC – never a true friend to the Resistance – emphasized that the Death Star owner (Veresen Inc., from the key Empire fossil fuels province of Canada) could re-apply for a new Death Star any time. And so they did, saying that Emperor Vader would save them….

Ok, enough Star Wars…. This 13-year battle now has moved into a blend of old and new terrain. We continue to work to build local and state support, while restructuring how to fight through the new FERC process and defeat state permits. Here are the highlights:

  • Veresen and Jordan Cove get strong support from the Trump Regime
  • Senators Wyden and Merkley try to play both sides with Trump and FERC
  • Merkley proposes a Full-Renewables Policy, with a Jordan Cove Loophole
  • Veresen agrees to a Sweetheart Merger with Pembina Pipeline Corp.
  • The Trump Regime announces new FERC Nominees – Wyden is key
  • Jordan Cove defeats a controversial local-control ordinance in Coos County
  • Coming next: Outreach to Wyden, Merkley, Governor Brown, and others

Veresen and Jordan Cove get strong support from the Trump Regime

Three days after President Trump’s inauguration, leaders of major construction unions met directly with him and top aides (including Steve Bannon) at the White House to promote Jordan Cove. They received a pledge of support: they were told that Jordan Cove would be the third energy infrastructure project on regime list for approval, immediately after the Keystone XL pipeline and the Dakota Access pipeline. Veresen CEO Donald Althoff was also incorporated into a major Trump corporate sales pitch and is claiming White House support.

Senior Trump aide Gary Cohn, director of the National Economic Council and a top advisor to the President on infrastructure plans, spoke recently to a key globalization think-tank, the Institute of International Economics. He stated bluntly, “We’re going to approve an LNG export terminal on the West Coast.”

Cohn, a former Goldman Sachs executive, made it clear that he was speaking specifically about Jordan Cove. He was definitive on Trump’s power to approve it, despite the fact that legally FERC is an independent agency.

Senators Wyden and Merkley try to play both sides with Trump and FERC

In response, Oregon Senators Ron Wyden and Jeff Merkley issued a joint warning to the White House, saying in essence, ‘Don’t mess with FERC, but we still like Jordan Cove.’

This remarkable letter has, for me, a ‘split the baby’ feel, and is a perfect example of the conundrum facing all of us: A huge percentage of the Democratic Party base opposes Trump on every level. Another traditionally-Democratic set of constituencies, portions of Labor and other rural and blue-collar voters, were vital to Trump’s Electoral College victory.

Both senators have been supportive of Jordan Cove – sometimes strongly supportive – through many twists and turns as the facts on the ground have evolved and opposition has grown.   But now Jordan Cove is a first-tier Trump agenda item.

And in Oregon, the power of the Building Trades in Democratic Party politics and the desperate need for high-wage jobs in Southern Oregon have been the key factors in preventing formal Democratic elected-official opposition to a pipeline and terminal that are terrible for landowners and communities, the local ecology, and the planet.

Furthermore, FERC has been a truly brutal agency, forcing eminent domain abuses on landowners on pipeline routes across the country before the pipelines have even received other mandatory approvals. FERC denied Jordan Cove twice last year because it is one of the worst and weakest LNG export projects in the United States – not because there is anything admirable about FERC’s management of fossil fuels exploitation as we live in climate crisis.

Merkley proposes a Full-Renewables Economy, with a Jordan Cove Loophole

Simultaneously, Senator Merkley was the lead sponsor and prime mover for a massive new bill that (if eventually approved) would constitute the most ambitious federal reform plan yet for our long-term energy use: the 100 by ’50 Plan: 100% renewables in the U.S. by 2050. The 319-page bill, S. 987, is designed to reform every section of the U.S. energy economy. Although controversial in many ways, it is a serious effort…

….EXCEPT the section prohibiting most new fossil fuels infrastructure, Section 501, would not take effect until 2021, for reasons that are unclear. This apparent loophole moves this crucial component of “Keep It In the Ground” past the time when Jordan Cove now expects to receive federal and state approvals and begin construction.

Many in Southern Oregon fighting to stop Jordan Cove and the pipeline see Senator Merkley’s actions as hypocritical.

Veresen agrees to a Sweetheart Merger with Pembina Pipeline Corp.

At the same time, Veresen agreed to a sweetheart merger with another Canadian fossil fuels company, Pembina Pipeline Corp. The two companies expect Canadian regulatory approval this fall, and the merger would make Pembina one of the largest Canadian fossil fuels companies (although still only medium-sized by U.S. and global standards).

The Pembina CEO praised Jordan Cove as a key opportunity, apparently forgetting the 2015 defeat of their $500 million propane export terminal proposal in Portland.

The Trump Regime announces new FERC Nominees – Wyden is key

FERC has been unable to approve any major new project since early February, when the five-member commission fell to two members and lost the ability to constitute a quorum. Under strong pressure from the fossil fuels industry, the Trump regime announced two new nominees last week: both are reliable supporters of all oil and gas projects.

One of Trump’s nominees is the top energy aide to Senate Republican Majority Leader Mitch McConnell. The other has been the top state manager of the fracking boom from the Marcellus shale-gas region in Pennsylvania, where many of the worst fracking abuses have happened.

The new nominees must be approved by the Senate Energy & Natural Resources Committee before the full Senate can move them to re-start FERC. Senator Ron Wyden is a former chair of that committee, and will be one of the most important Senators reviewing theses nominees and the new role of FERC under Trump.   Stay tuned!

Jordan Cove defeats a controversial local-control ordinance in Coos County

On May 16, an ordinance initiated by petition by grass-roots activists in Coos County to promote sustainable energy and stop Jordan Cove was defeated 3-1. The proponents of this initiative were outspent by Jordan Cove more than 50-1.

The long-term impact of this valiant effort remains to be seen, although Jordan Cove proponents will claim it as definitive (wrongly, I believe). The measure, a “community rights” proposal developed in conjunction with the controversial Community Environmental Legal Defense Fund, is seen by most legal observers to be unconstitutional when applied solely on a local level, and court challenges to date have borne that out.

But the well-meaning fervor of these local activists to make change will, I believe, rebound and restore itself over time.

Coming next: Outreach to Wyden, Merkley, Governor Brown, and others.

So: what is to be done? Watch your email action alerts: we will be presenting you with opportunities to help educate our Senator and Governor Kate Brown on the fallacy of allowing the Jordan Cove Energy Project fracked-gas export terminal and the Pacific Connector Gas Pipeline to proceed forward.

This project will never be built.

Ted Gleichman is policy advisor for the Oregon Chapter Beyond Gas & Oil Team and a member of the National Strategy Team for Sierra Club’s Beyond Dirty Fuels Campaign.

 

 

 

 


City of Portland Will Divest all Corporate Securities & Consider a Public Bank

April 13, 2017

By Ted Gleichman

In a local political shocker, the Portland City Council, deeply divided, has voted to divest all corporate securities from its investment portfolio.  A majority also said they will consider creating a public bank.  This surprise turn to a decade of arguments over corporate behavior and city investments came at the end of a four-hour public hearing April 5.Raging Grannies singing testimony to Portland City Council

 Raging Grannies sing their testimony to Portland City Council. Credit: Ted Gleichman

The city commissioners had wrestled for years with ruling on which companies should or should not be able to use cash owned by the people of Portland.  In the end, they voted 3-2, over strong opposition from new mayor Ted Wheeler, to eliminate all corporate securities from the city’s portfolio, which approaches some $2 billion.  Currently, $539 million of that is invested in corporate bonds and commercial paper.   These funds will be moved into non-corporate investments (generally, government bonds) as each specific corporate security reaches its maturity date or can be redeemed early for greater profit.

Long term, the most important piece of the dramatic meeting may turn out be an informal commitment by a majority of the commissioners to consider creating a city-owned bank, as the vehicle to manage the city’s portfolio.  If that happens, the City of Portland would join the State of North Dakota as owners of the only public banks in the U.S.

The April 5 decision came through the approval of the city’s 2017 investment policy, a document required annually under Oregon law.  In past years, up to 35% of city funds could be invested in top-quality corporate securities, with current specific exclusions on a “Do-Not-Buy List” as a result of earlier battles: Walmart, and the Carbon Underground 200 list of the largest publicly-owned fossil fuels companies globally, 100 coal and 100 oil and gas, all ranked by the size of their proven reserves – a “keep it in the ground” tool.

Fracking Rig-BLM-wind_river-small format

Fracking on public land in Wyoming.
Credit: Pinedale BLM Field Office, Wikimedia  Commons public domain

In 2013, as divestment battles from many perspectives heated up, the city council created the Temporary Socially Responsible Investing Committee (SRI) to advise them.  In 2014, they recreated it without the “Temporary” label.  The new SRI committee, in a remarkable document, recommended in September 2016 that as many as ten companies should be kept on or added to the Do-Not-Buy List.  The proposed additions were Wells Fargo, Caterpillar, Nestle, Amazon, and five other global banks.  After a difficult hearing in December, the then-council imposed a four-month moratorium on any new purchases and directed City Treasurer Jennifer Cooperman to come up with a new policy for 2017, taking everything into account.

The treasurer’s proposed policy essentially ignored the SRI recommendations, and about 150 activists showed up on April 5; 40 testified.  No one supported the treasurer’s recommendations; the corporations singled out most often in the testimony as “the worst of the worst” were Caterpillar and Wells Fargo.  Oregon Sierra Club added its voice to the process; Beyond Gas & Oil Team chair Gregory Monahan and I called for a commitment to SRI and transparency, based on the critical importance of environmental justice in Sierra Club.

Then Commissioner Dan Saltzman, the longest-serving member of the city council, startled the room by proposing an amendment prohibiting any new corporate investments.  Commissioner Saltzman said he was deeply frustrated about the amount of time these debates took away from other work every year, and wanted them over.

Treasurer Cooperman said that decision would cost the city from $3-$5 million a year in lost profits.  That was a key factor in opposition to the amendment by Mayor Wheeler and Commissioner Amanda Fritz.  The mayor also made a strong statement opposing divestment on principle, with a lot of detail about his six years as state treasurer.  Nonetheless, the Saltzman amendment passed with support from Commissioners Nick Fish and the newly-elected Chloe Eudaly.  The council then unanimously approved the revised policy, putting the city in compliance with the state requirement.

Most of the activists in the room were shocked; none of the leaders of the environmental and faith organizations present had predicted this.  One local divestment leader told me that she didn’t see it as a win, “because now we can’t call out the worst corporations by name.”  Others (including me) felt that a general policy against corporate investing sends a strong positive message on our city’s priorities.

Mayor Wheeler and Commissioners Fish and Eudaly all responded positively to testimony advocating for a public bank, and it’s clear that idea is going get more attention.  Commissioner Eudaly said she and her staff are preparing a report evaluating the options.

The new divestment policy is not a fire sale; corporate securities will leave the portfolio when the treasurer deems the time is right, not overnight.  On the current schedule, the final piece of Portland’s corporate portfolio is a $10 million Wells Fargo security that will pay the city 2.15% profit when it comes due in December 2019.

Dakota_Access_Pipe_Line,_Central_Iowa

Dakota Access Pipeline in Iowa. Credit: Carl Wycoff, Creative Commons 2.0

Currently, Wells Fargo – a key financier of the Keystone XL and Dakota Access pipelines – is Portland’s top corporate issuer, with almost $78 million in holdings.

Ted Gleichman serves as policy advisor with the Chapter’s Beyond Gas & Oil Team