This is the News

An urban legend, sometimes called a modern myth, is a story whose teller would have you believe is actually true, but is usually distorted, exaggerated or fabricated for sensational effect. Most people understand these stories for what they are: a myth meant to perpetuate a viewpoint, agenda or frighten the listener.

Some well known urban legends include stories of alligators living in the New York City sewer system, stolen kidneys and claims that the Apollo moon landing was actually filmed at a Hollywood studio. And when it comes to LNG, there seems to be no shortage of myths, all of which are easily refuted by facts.

Recently, Steve Forrester, editor and owner of a local newspaper and acknowledged project opponent, wrote an editorial speculating that Bradwood was secretly planning to export domestic natural gas. Like anyone else, Mr. Forrester is certainly entitled to his opinion. Our initial response to this concern was straightforward: the idea was absurd, and we spelled out the reasons in detail why export could never happen in a rebuttal Opinion later published by the paper.

So you can imagine our surprise when, just one month later, a second editorial was published by Mr. Forrester that concluded again that Bradwood will export LNG, repeating the same story already shown to be false.

This sequence of events led us to take the unusual step of having to pay to place a full page ad in his newspaper explaining again the many reasons why Bradwood can never export LNG. (see the full page ad here) That letter is reprinted below, together with the editorial.

So the next time someone tells you that Bradwood's LNG terminal is planning to export LNG, let them in on the real secret: it's just another urban legend, repeated by project opponents, and forward them the pdf provided on this page.

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PLEASE GET YOUR FACTS STRAIGHT.

An open letter to the Daily Astorian:
To Steve Forrester                                         October 21, 2009
Publisher, The Daily Astorian                                         

Your October 15 editorial, "Get real - U.S. natural gas inventory has been enlarged - terminals are for export", shows that you still don't understand how natural gas markets work.

You point to an increase in the amount of gas found in the U.S. as the reason for repeating your "LNG-as-export" claim, but you don't give your readers the details about how this gas costs more.

We have said plainly that Bradwood could never export liquefied natural gas.
Here's a quick re-cap of the reasons why:

1.   Oregon imports all of the natural gas it consumes and will continue to do so in the future. Oregon has no gas to export.

2.   While the U.S. has large reserves of natural gas, much of this gas (such as shale gas) is more expensive to extract. And, none of the shale gas fields are near Oregon. Gas would have to be piped west thousands of miles, further increasing its cost. Piping gas to Oregon, liquefying it and exporting it into the Pacific Rim (which includes some of the world's largest exporters of low-cost LNG) makes no economic sense.

3.   Because of the hills and cliffs, the Bradwood site doesn't have the space needed to build a liquefaction plant big enough to create enough LNG for export.

4.   Bradwood is only permitted to import gas, not export it.

5.   Bradwood will have no ability to make LNG, a process that requires completely different equipment than warming LNG back into a gas.

We've offered before to sign a contract with the State of Oregon stating that Bradwood Landing would never be an export terminal. This offer still stands.

Contrary to the claims of LNG opponents, Bradwood would benefit residential and industrial gas users by increasing competition among gas suppliers, and open the door to Alaskan LNG in the future.

Since January there have been 110 LNG cargoes delivered to the U.S. at an average price of $ 3.92 per Million British Thermal Units (MMBTU). On October 15th, Northwest consumers were paying $4.76/MMBTU - a 20 percent increase over other U.S. regions with access to LNG imports.*

LNG is simply natural gas chilled to a liquid, making its transportation easier and cheaper. The fact remains that LNG imports are highly competitive with U.S. gas, which makes your export theory unsupportable.

*Recent prices at the Sumas, Washington and Malin, Oregon natural gas hubs from where Natural gas is imported into the Northwest are roughly $4.76/MMBTU, a 20 percent premium over Henry Hub pricing. The Henry Hub price of gas is the benchmark for natural gas trading in the United States.

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The two graphics below, while not included in the original ad, illustrate the distance shale gas would have to be piped to the Northwest. It also shows how the topography of the Bradwood site would not allow enough area for a liquefaction facility.

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U.S. natural gas inventory has been enlarged - terminals are for export

Editorial
The Daily Astorian
October 15, 2009

The biggest misconception about liquefied natural gas (LNG) is that America's natural gas inventory is approaching empty. The spectre of diminished American natural gas supply is the premise on which NorthernStar LLC and Oregon LNG base their proposals for LNG terminals at Bradwood and on the Skipanon River.
 
Reality is quite different. The Economist reported on Aug. 13 its interview with one of America's leading natural gas developers, Robert Hefner. "... (A)s recently as two years ago the conventional wisdom was that America was running out of the stuff and investors began considering building new terminals to import the liquefied form from abroad. All that has now changed. 'I used to say we were awash in gas,' says Mr. Hefner. 'Now I say we're drowning in it.'"

The Economist further reported that, "in June the Potential Gas Committee, a semi-official body, revised its estimates of America's gas reserves, raising them 39 percent above its assessment in 2006. The biggest part of that boost comes from higher estimates of gas in shale formations, which were formerly difficult and expensive to reach. Advances in horizontal drilling and the hydraulic fracturing of rock have made it possible to get previously inaccessible gas out. Shale gas, according to the committee, accounts for two-thirds of America's technically recoverable reserves, enough to supply the country for 90 years."

Now do we get it?

The terminals planned for Bradwood and the Skipanon are not for importing natural gas. They are for export. And, yes, we are supposed to be the rural colony from which the LNG will be shipped.

The editorials on this page are written by Steve Forrester, editor of The Daily Astorian (sforrester@dailyastorian.com) and Matt Winters, editor of The Chinook (Wash.) Observer (mwinters@chinookobserver.com)

Download PDF (681 KB pdf file)