(Here’s how it happened: Three and a Half Zeros, Plus a Minus)
By Ted Gleichman
Among the most important values of Sierra Club to our planet and society are effective grassroots action, long-term attention to detail, and structured commitment to change. With the Federal Energy Regulatory Commission’s astounding decision against the Jordan Cove LNG export terminal and the Pacific Connector Pipeline projects (JC/PCP), we are reaping the fruit of many years of work, within Sierra Club and with many important and expert allies in coalition.
On March 6, I told 35 activists assembled in Eugene for our quarterly anti-LNG strategy session that I thought there was a genuine chance that FERC would deny Federal approval and eminent domain for JC/PCP. (People scoffed.) On March 11, FERC unanimously rejected the pipeline, and therefore the terminal!
I’m not a prophet, nor was I the first Oregon activist to figure this out. That honor goes to a landowner couple on the PCP route, Deb Evans and Ron Schaaf of Jackson and Klamath counties, who dug deep into FERC history, policy, and procedures, and simultaneously fought hard to help other landowners resist the arrogant low-dollar easement offers that JC/PCP tossed at them. Deb and Ron put together – and, with other landowners, paid for – a formal legal filing with FERC that the Commissioners explicitly praised in their denial order.
Ron and Deb also schooled me, in exhaustive detail, over a long weekend in early January at their home in the mountains above Ashland. We did a thorough and careful analysis (aided, fortunately, by a couple of bottles of good wine). Here’s why we concluded this ground-breaking FERC rejection was possible:
- Veresen Inc., the Alberta oil and gas shipper that owns Jordan Cove and co-owns PCP with Williams (the brutal Oklahoma pipeline company) is a financial mess. They barely make money and their market capitalization has dropped by more than half since the beginning of the oil crash, to less than $2 billion. In recent months, they’ve been trying cut back on their miniscule financial aid commitments to Coos Bay and the pipeline communities.
- After 11 years of promoting JC/PCP, Veresen had netted a grand total of “three and a half zeros”: Zero contracts to sell gas in Asia; zero supplier contracts with frackers in the Rockies and Alberta; zero sources of financing for this $7.5 billion project set, which they can’t afford to build on their own – and fewer than 5% of landowners on the pipeline route who had sold them easements.
- FERC traditionally is all about the so-called “free market”: they almost invariably approve any corporation that has the financial means to plan, buy, build, and sell an energy project. But Veresen has been failing all four of those market tests, leading to these 3½ Zeros.
- Eminent domain has become increasingly toxic. People and politicians of all stripes hate the savage assaults on farms, woodlands, businesses, and family homes by frackers and pipeline companies all over the United States. Eminent domain is supposed to be a fair and open public process for the common good – not a private-profit work-around for greedy victimization.
- FERC had never approved eminent domain for such a large number of families (some 630 landowners) with so few negotiated easements. Our battle against PCP, with both grass-roots and professional environmental leadership from Sierra Club and many other wonderful organizations, has been one of the most effective and politically-charged in the country.
- FERC has been under severe political pressure nationally and especially on the East Coast, in the brutally-fracked Marcellus shale regions of Pennsylvania, West Virginia, and Ohio. LNG approvals by FERC in Maryland, Louisiana, and Texas have generated massive protests there and across the environmental movement.
- We believe FERC was looking for an especially-weak project to deny, to be able to say that they are not just a rubber stamp. Hence, for an agency looking to defend itself, and to avoid the very worst of eminent domain, this gave us “plus a minus.”
So this remarkable FERC decision gives Oregon a major victory that thousands of people from many groups have fought for, now reverberating all over the country. In their ruling, unprecedented for any LNG or pipeline proposal, the FERC Commissioners explicitly said that a company with no contracts to sell a product (which, as noted, it doesn’t yet own, through a project that it can’t afford to build) could not demonstrate overall “public benefit” adequate to justify eminent domain harm to so many “landowners and communities.”
FERC also explicitly called out the work of National Sierra Club senior attorney Nathan Matthews, the brilliant LNG specialist within our expert Environmental Law Program. The Commissioners noted in detail the specific elements of our condemnation of JC/PCP and the FERC staff’s construction of the Final Environmental Impact Statement (FEIS). We have every right to be proud of the Member-owned and staff-built organization that has evolved since John Muir founded it 124 years ago.
What’s Next? Because LNG in Oregon is Not Dead Yet
FERC put JC/PCP in a coffin, but they also gave them a path to climb out, saying in essence, come see us again if you get any contracts to sell LNG. So we are not done.
Plus we also face Oregon LNG, which is proceeding with their plans for massive pipelines through Washington from Canada, across Northern Oregon, and feeding an LNG export terminal in Warrenton, across from Astoria on the Lower Columbia. This $7 billion project is financially strong but politically and technically very weak. FERC staff will issue the Oregon LNG FEIS on June 3. We need to add Oregon LNG to the JC/PCP coffin, then nail it shut on both of them.
So our next post will include details on our coffin-completion construction plans – stay tuned! The focus now will be on the State of Oregon and Governor Kate Brown: they now need to do their part, and we will keep you posted.
In the meantime, please do two very important things:
- If you have the capacity to work with the Oregon Chapter Beyond Gas & Oil Team, please contact team chair Gregory Monahan at firstname.lastname@example.org. We’ve got a lot to do, on LNG and many other fossil fuel attacks!
- If you have the capacity to help support the Oregon Chapter even more, please dig deep! You can make a direct donation, upgrade your Sierra Club membership level, or give a gift membership. Remember: we Members own the place – so we have an obligation to stewardship. We have a great staff at the Oregon Chapter, and we need to keep them fed and watered!
From a long-time volunteer Member-leader: thanks for all you do!
Ted Gleichman — 503-781-2498 — Twitter: @tedgleichman
Member, National Strategy Team & National Delivery Team, Stop Dirty Fuels Initiative, Sierra Club
Policy Advisor, Beyond Gas & Oil Team, Oregon Sierra Club