Houston — The Jordan Cove LNG project was left in limbo Thursday, as the Federal Energy Regulatory Commission declined to approve the project, at least temporarily, and Oregon regulators denied a key coastal zone management certification.
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FERC voted 2-1 Thursday against an order to grant certificate approval, as Republican Commissioner Bernard McNamee said he was voting no for now because he needed more time to examine what the state of Oregon had said.
But it appeared another vote at FERC was possible in short order.
"I expect I'll be able to vote on the project next week," McNamee said during the commission's monthly meeting, adding he was not sure yet whether he would come down for or against it. Calling the project a complex one, he said, "there's many people that are for it and many people against it, and it needs to be considered."
The Coos Bay, Oregon, project has a design capacity of about 7.5 million mt/year in its first phase, and is affiliated with the 229-mile, 1.2 Bcf/d Pacific Connector natural gas pipeline. FERC rejected the first application for the project in 2016 in a rare decision against a natural gas project application from the commission.
If approved and ultimately financed and built, the project would provide the first West Coast LNG export terminal in the Lower-48 states, providing an outlet for western Rockies and Canadian production struggling to find downstream demand, according to S&P Global Platts Analytics.
Application still pending
Chairman Neil Chatterjee, who voted for approval, said the rejection should not be considered a denial, and the application remains pending. Because there were two no votes, no order was actually issued by the commission, leaving document in the same situation as it was prior to the meeting and the application still valid, FERC officials said.
"We'll vote on it when it's ready. We could vote on it this afternoon, we could vote on it next week," Chatterjee told reporters, adding it could be the same order or an amended version.
Chattjerjee said he kept the item on Thursday's agenda out of a desire to meet a schedule posted under the FAST-41 Act, which called for a FERC vote February 13.
Oregon regulators have repeatedly raised concerns about aspects of the environmental review, and Wednesday the Department of Land Conservation and Development determined the project had not established consistency with enforceable policies of the Oregon Coastal Zone Management Program pursuant to the Coastal Zone Management Act.
"Coastal effects analyses show that the project will negatively impact Oregon's coastal scenic and aesthetic resources, a variety of endangered and threatened species, critical habitat and ecosystem services, fisheries resources, commercial and recreational fishing and boating, and commercial shipping and transportation, among other sectors critical to the state," the department said.
The CZMA determination is one of the stronger levers held by states reviewing aspects of interstates natural gas projects, although the new finding can still be appealed to US Commerce Secretary Wilbur Ross by project developers.
Glick questions recusal
Adding to uncertainties at FERC, Democratic Commissioner Richard Glick, a Democrat, told reporters he would need to consult with FERC's office of general counsel on whether to recuse himself from the next vote on Jordan Cove. "I spoke to the merits because no one told me" about McNamee's plans and "now I don't know whether I prejudged the order," he said. "If communications were better, we wouldn't have that issue, he added.
Were Glick to recuse himself, FERC would lack a quorum needed to vote on the order.
Explaining his objections to the order at the start of the meeting, Glick said it failed to address an Oregon law capping state greenhouse gas emissions and to consider how project emissions affect that goal. In addition, despite finding some significant impacts, the order doesn't go through the exercise of weighing the economic benefits against those environmental impacts, he said. "Something's really rotten with that," he said.
Explaining his move to pause the action, McNamee said he "had to balance what our procedural obligations are under FAST-41 versus what I believe my obligation is to consider seriously the information that is being presented to us," he said.
In a written statement after the meeting, he said, his vote "without prejudice regarding the commission's pending action on the project."