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PORTLAND, Ore. – An
internal May 30 memo from Oregon Public Utility Commission Chairman Lee
Beyer to Oregon Governor Ted Kulongoski expressed concern about the future price of natural gas
due to a combination of increased demand, lack of supply, increased production costs for Canadian
and domestic resources, and a move away from coal-fired generation.
According to the memo, rising gas prices will push up electricity prices, substantially creating
problems for industry and especially low-income customers. The Chairman also said there is no
assurance that new pipelines into the Northwest will be built, and that an LNG terminal in the region
would help in meeting demand and lowering gas transportation costs. “In sum,” the memo said, “the
Commission believes, short term calamities aside, Natural gas will likely be available for the
foreseeable future, but the question is: at what cost?”
“Other regions of the country are all looking to secure access to additional gas supply
sources, such as LNG and nonconventional gas, to replace supplies from quickly diminishing
domestic and pipeline import sources. The Northwest should do the same.”
- Memo from
Oregon PUC Chairman Lee Beyer to Governor Ted Kulongoski,
May
30, 2008, page 4.
Oregon imports 100 percent of the natural gas it consumes. Meanwhile, the wholesale price of
natural gas has increased 300 per cent in the Northwest since 2000, with domestic natural gas
trading today at $12 per million British Thermal Units (MMbtu). Regarding the ability for LNG to help
lower the cost of energy for ratepayer, the report went on to say, “It is worth noting that the reported
actual cost of delivering LNG to U.S. facilities is approximately $4.50 per MMBTU leaving lots of
room for market economics to work.”
“As a non-partisan body whose role is to ensure affordable and reliable utility service for
Oregonians, the PUC’s voice matters a great deal,” said NorthernStar Natural Gas Senior Vice
President for External Relations Joe Desmond. “The Chairman validated what Bradwood Landing
has always said about the benefits of its proposed liquefied natural gas import terminal. LNG can
play an important in role helping to meeting Oregon’s clean energy goals, together with increased
energy efficiency and greater use of renewable resources.”
“The Governor’s Office should also be commended for seeking out input from the PUC, which brings
the ratepayer and reliability perspective into the state’s evaluation process,” said Desmond.
The memo to the Governor, partly in response to an earlier Oregon Department of Energy (ODOE)
Report that examined the need for natural gas, also addressed supply, demand and gas stability
issues. On the topic of reliability, the memo reinforced the ODOE’s report’s view that “the storage
offered by an LNG plant in Oregon could benefit the state due to cost savings during high demand
periods and provide resiliency in an emergency.”
On June 6th, the Federal Energy Regulatory Commission (FERC) issued its final Environmental
Impact Statement (fEIS) for the proposed Bradwood Landing liquefied natural gas terminal near
Astoria and its associated pipeline which includes unparalleled avoidance and mitigation measures
to ensure its project provides a net environmental benefit for the lower Columbia River. The project
would provide a new source of natural gas directly into the Oregon and Washington natural gas
market. It would create more than 450 jobs over three years of construction and 65 permanent jobs
while contributing more than $7.8 million annually in taxes to Clatsop County.
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