New LNG Legislation Possible

Our state Legislators may consider new rules for the siting of liquefied natural gas terminals and specifically pipelines connected to those plants.

While there are already many requirements placed on building anything in Oregon, this new law would propose that the Oregon energy department be required to determine the need for more natural gas in Oregon before the state could move forward in the approval process.

That's like requiring a state agency to determine the actual need for shoes in Oregon before another pair can be imported into the state.

Here's the summary:

Status of the bill
Hundreds of citizens throughout Oregon requested a bill to ensure the protection of the public when Oregon agencies issue permits for LNG terminals and LNG-related pipelines. The bill was submitted to Legislative Counsel in November of 2008 and is undergoing revisions and awaiting a bill number.

Oregon’s authority over LNG
While the 2005 federal Energy Policy Act gave the Federal Energy Regulatory Commission (FERC) primary siting authority over LNG terminals, Oregon has multiple opportunities to reject or condition LNG projects. The federal statute expressly gives Oregon authority to deny the necessary Clean Water Act permits, Clean Air Act permits and Coastal Zone Management Act authorization. Additionally, LNG developers need leases of State lands for the terminal and pipeline, State water rights, and State wetland fill permits. The LNG Public Protection Act was carefully drafted to provide State authority that is not preempted by FERC

The Effect of the Act
For LNG terminals and LNG-related pipelines, the proposed legislation has four components:

1. Ensures there is a need for LNG before giving away State resources
Oregon agencies can issue leases of State lands, water rights, or wetland fill permits only if there is a demonstrated need for LNG and if the price of LNG does not exceed domestic natural gas. The Oregon Department of Energy would determine whether there is a need for LNG in Oregon. This ensures that State land and water, along with private farms and forestland, are not harmed if LNG is not needed. It also ensures that consumers will not pay more for higher-priced LNG.

2. Ensures that LNG terminals are consistent with Oregon’s strategies for reducing greenhouse gases and global warming
LNG would have to meet the same standards as other energy sources for greenhouse gases.

3. Ensures that natural resources are protected
The proposed legislation states that DEQ may not issue a pollution discharge permit or certify that a project meets Oregon’s standards if the project adversely affects to any extent uses beneficial to Oregonians, including commercial and recreational fishing and agriculture.

4. Ensures vulnerable citizens are protected
To protect human health, LNG facilities are prohibited when the identified fire-risk zone for the LNG facility overlaps with a high sensitivity use, such as day care centers, hospitals, or elder care facilities. This common-sense requirement keeps LNG facilities away from vulnerable citizens in the event of a low probability but high consequence LNG accident or terrorist attack.

What the LNG Public Protection Act would not do
The Act would not affect natural gas pipelines that are not directly related to LNG terminals.
The Act would not ban LNG terminals, but only ensure they meet certain standards prior to leasing State land or granting State water rights.
The Act would not create additional permits.
The Act would not create additional administrative obligations, except for the requirement that the Department of Energy determine whether there is a need for LNG.