Boston (AP)  -- The Coast Guard says a problem with the computers that control an LNG tanker's boilers caused a loss of power that left the tanker adrift off Cape Cod.

The Coast Guard said Tuesday that the 933-foot Catalunya Spirit was being towed by tug to an area about 20 miles east of Provincetown where it can safely sit while being repaired.

It's expected to arrive there about 6 p.m.

The tanker was carrying 138,000 cubic meters of liquified natural gas from Trinidad and Tobago to Boston when it lost power early Monday about 45 miles off Chatham.

Coast Guard Lt. John Cusch said Distrigas, which operates the facility where the tanker was headed, was speeding up its next LNG shipment and there were no concerns about local LNG supplies.

Governor ups ante against LNG sites

Energy - A letter tells federal regulators to back off and calls into question the quality of their reviews

Friday, February 15, 2008

TED SICKINGER

The Oregonian

Gov. Ted Kulongoski insisted Thursday that federal regulators halt all reviews of proposals to build liquefied-natural-gas terminals in Oregon until they study all alternatives for supplying natural gas to the region.

In a letter sent Thursday to Federal Energy Regulatory Commission Chairman Joseph Kelliher, Kulongoski said he had asked the state attorney general to examine Oregon's legal authority to refuse state permits for the projects until FERC complies with his request.

Kulongoski also told Kelliher he had asked Oregon's congressional delegation to enact legislation that would wrest back state control for licensing LNG facilities. State authority was preempted by the federal government as part of the Energy Policy Act of 2005.

The governor's new posture, outlined Thursday in an interview with The Oregonian, marks a bold departure from his wait-and-see, open-minded approach that has accompanied debate and review of the gas-importing terminals for years.

From the outset, the LNG proposals have stirred controversy.

Some in rural communities welcome the jobs and taxes they would generate. Other residents scorn the potential damage to the Columbia estuary and decry the likely use of eminent domain to seize farmland, vineyards and forest for hundreds of miles of pipeline.

Kulongoski told Kelliher he wasn't "unalterably opposed" to LNG being part of Oregon's energy mix. But he said FERC's "approach to the licensing of plants and pipelines has created a crisis of confidence with Oregonians."

Opponents of the projects cheered Kulongoski's moves. They have been appalled by FERC's style of regulating the terminals -- an extension, they say, of a laissez-faire approach of the Bush administration.

"This is just the type of leadership we want to see the governor take on this issue," said Brent Foster, executive director of Columbia Riverkeeper. "It's encouraging that he's recognizing that these LNG projects deserve a very close look, and it's important that the rush to approve these projects not leave us with a mistake."

The governor's new stance puts Oregon in league with states across the country that have raised objections to FERC's permitting approach and its preemption of state licensing authority.

"Ultimately, we may end up in court over this," Kulongoski said in the Thursday interview. "We're not exactly clawless. . . . The state doesn't have all the tools, but we are a critical piece. You're going to have to meet the state concerns."

Energy companies have proposed building three LNG terminals in the state: one in Coos Bay and two on the Columbia River. The terminals would accept imports of supercooled natural gas from abroad, reheat the liquid into a gas, and ship the gas to West Coast markets through one of four proposed pipelines.

Two other companies have proposed building pipelines to ship domestic natural gas from the Wyoming Rockies to southern Oregon.

Project proponents say Oregon needs to diversify its natural-gas supply to offset potential price spikes as regional demand rises and, as they contend will happen, Canadian imports or domestic supplies go into decline.

The Northwest Gas Association projects that natural gas demand will grow 2 percent annually during the next five years, driven primarily by higher need for electricity generation and growing residential use. 

"The Northwest's need for additional natural gas is well documented," said William "Si" Garrett, chief executive of NorthernStar Natural Gas Inc., in an e-mail statement. NorthernStar wants to build the Bradwood Landing terminal 20 miles upriver from Astoria on the Columbia River. Bradwood is expecting a decision from FERC -- its first on any of the Oregon proposals -- in the spring or early summer. The company says nine studies in the past two years have shown a need to boost the region's gas supply.

Industrial gas users and the gas industry's regional trade group said Thursday that the federal government does not need to analyze the region's gas needs and how best to meet them. No company would build a facility that wasn't needed and fully subscribed, they contend.

"I'm not sure the government is as well-equipped as the market to determine which facility is most efficient and cost-effective at meeting the region's needs," said Dan Kirschner, executive director of the Northwest Gas Association.

Kulongoski, however, said the regional need for gas, and which facility would best meet that need, are "threshold questions."

Each of the proposed LNG and Rockies pipelines could import far more gas than Oregon uses. Opponents long have contended that project backers want to use Oregon as a back door to California, which already has spurned several efforts to locate LNG terminals there.

Oregon state agencies, meanwhile, have complained that FERC's environmental review of Bradwood was inadequate and that it had abdicated its responsibility to thoroughly evaluate alternatives.

Some of Kulongoski's Democratic colleagues, including Secretary of State Bill Bradbury and Oregon House Speaker Jeff Merkley, have opposed the terminals. Bradbury, in particular, is wary of seeing the state tie its energy future to an imported fossil fuel with higher greenhouse emissions than domestic natural gas.

In his letter, Kulongoski asked that FERC's review of alternatives include a full analysis of carbon emissions along LNG's path from source to market, including liquefication overseas, trans-ocean shipping and re-gasification here. The analysis, he said, should be compared with the harms of extracting more gas domestically.

"No review of any of the three individual LNG projects should proceed further until this carbon study is completed by FERC," Kulongoski wrote.

Ted Sickinger: 503-221-8505 tedsickinger@ news.oregonian.com

©2008 The Oregonian

Comment to area I hi-lighted in red. When reading any information or quotes from Northwest Gas Association and/or Dan Kirschner, Director, please remember, this organization is paid by natural gas and pipeline companies to lobby and/or do research for them. The association receives monies through membership fees and the membership consists of companies such as Northwest Natural Gas (NorthernStar’s partner), Cascade Natural Gas, MDU Natural Gas, Williams Northwest, and so on. Of course Dan will speak in favor of an LNG project, his members stand to earn millions as does he and his association in whatever form for graciously supporting their cause.

Ted Sickinger, the author of this article, is looking for personal stories from landowners as well. Please feel free to write to him regarding your experiences with NorthernStar, Palomar or Oregon LNG.

Kulongoski slams feds' gas pipeline review

Governor has a 'growing concern' about regulators' handling of the controversial liquid natural gas project

BY JOHN SCHRAG

The Forest Grove News-Times, Feb 14, 2008, Updated 1.6 hours ago

Gov. Ted Kulongoski told federal regulators on Wednesday to stop their review of three liquid natural gas facilities proposed in Oregon.

In a letter to Joseph Kelliher, chairman of the Federal Energy Regulatory Commission, the governor blasted the agency's handling of the project, and insisted that it review all alternatives to the controversial energy supply and work to restore the state's right to enforce its own environmental standards.

"I have a growing concern that the Federal Energy Regulatory Commission's approach to the licensing of plants and pipelines has created a crisis of confidence with Oregonians," the governor wrote. "It is essential that FERC conduct a process for a regional review of alternative means of meeting future demands for natural gas that is fair to the citizens of Oregon and our neighboring states."

Three companies are working with federal regulators to build liquid natural gas terminals near Astoria and Coos Bay. The proposals would send the pipelines from two of the projects through western Washington County and northern Yamhill County.

The terminals have drawn loud crowds at rallies and sparked citizen groups in Forest Grove, Yamhill, Astoria and, most recently, Salem. The groups have raised concerns about private property rights, safety and the effect on the environment.

Until Thursday, Kulongoski was viewed as a cautious supporter of the project, having said he thought that the liquid natural gas could serve as a "bridge" to renewable energy sources. His letter signaled a sharp shift.

In the letter, the governor outlined his "concerns about lack of information on the need for LNG in the Pacific Northwest, concerns about localized impact on air and water quality, and no analyzis of greenhouse gases that may be released by specific sites in Oregon."

In addition to calling on Kelliher to review alternatives to the LNG facilities, Kulongoski said he had directed Oregon's Department of Energy to conduct its own evaluation.

Further, Kulongoski said he has asked Oregon Attorney General Hardy Myers to see whether the state has the legal authority to stop progress on the federally regulated projects until FERC completes the requested review.

Finally, the governor said he was asking members of the Oregon Congressional delegation to seek a repeal of the laws that gave the FERC the authority to "preempt" Oregon's facility siting process.

WHEREAS, the Republican-controlled Congress passed the 2005 Energy Bill, which granted the presidential-appointee panel at FERC (Federal Energy Regulatory Commission) the sole and exclusive authority to site LNG (liquified natural gas) terminals in the United States, even over the objections of the affected states' governors;

WHEREAS there are plans to site LNG terminals in the Columbia River estuary at Astoria, as well as at Coos Bay in order to supply California with vast quantities of natural gas after California's citizens and politicians united to adamantly oppose LNG in California's harbors and along their coastlines;

WHEREAS a typical LNG tanker, which is over 3 football fields long and carries 35 million gallons of LNG--which is the equivalent of 20 billion gallons of natural gas—could explode with the force of 55 Hiroshima bombs, engulfing nearby communities in an inferno;1

WHEREAS the Government Accountability Office (GAO) released a report on Jan. 8, 2007 which states that LNG tankers are prime terrorist targets and the Coast Guard is stretched too thin to provide adequate protection for those tankers;

WHEREAS LNG in the Columbia River estuary creates a threat to critical salmon habitat and each outgoing LNG tanker would take 20 million gallons of fresh water with it as dead weight to stabilize the empty ship2;

WHEREAS, due to the extreme risk of explosion, the Coast Guard requires a 1500-ft. 'safety exclusion zone' on each side of LNG tankers, which would force boaters, recreational and commercial fishermen to the margins of the Columbia River and 24 hour surveillance cameras would invade the privacy of ordinary citizens;

WHEREAS the National Grange, the oldest farm and rural public interest organization in the United States, vigorously opposes LNG tankers, terminals and pipelines because they threaten public safety, degrade the environment and obstruct the movement of farm products down the Columbia River to market;

WHEREAS Congressman Brian Baird (D), along with 19th Legislative District representatives Dean Takko (D-Longview), Brian Blake (D-Aberdeen) and state senator Brian Hatfield (D-Raymond) have announced their opposition to LNG in the Columbia River;

WHEREAS former Gov. Mitt Romney(R) has taken a leadership role in fighting LNG, as have other governors across the nation, but Gov. Gregoire, Senator Murray and Senator Cantwell are, as yet, unwilling to oppose LNG in the Columbia River;

THEREFORE BE IT RESOLVED that we, the 12th Legislative District Democrats call on each and every one of our Washington state and federal representatives to oppose LNG in the Columbia River because importing even more foreign fossil fuels is a major step in the wrong direction and the Columbia River should not be exploited as the back door for California's natural gas imports. 1 http://timrileylaw.com/LNG_TANKERS.htm 2 http://www.oregonlive.com/oregonian/stories/index.ssf?/base/editorial/1188255348196890.xml&coll=7

Columbia River ports wary of LNG plans

Sunday, January 13, 2008 5:10 AM PST

By Tony Lystra

The shipping vessels that travel the Columbia River can cost as much as $60,000 each day to operate, said Larry Paulson, the Port of Vancouver's executive director. The companies that own them, he said, are not fond of delays.

So, if the Columbia River becomes known for hold-ups, Paulson said this week, those shipping firms could abandon ports along the Columbia for more reliable west coast destinations.

That's why Paulson and other officials overseeing the region's ports remain concerned about a Houston company's plan to build a liquefied natural gas terminal on the Columbia River.

The ports haven't said they oppose the plan. But they want to know more about strict security measures surrounding the LNG vessels that would visit Northern Star Natural Gas's plant, proposed for Bradwood, Ore.

At issue are the Coast Guard's rules for LNG carriers on the Columbia, which were announced in February of last year. The Coast Guard, which is responsible for the vessels' security, said the LNG ships will be allowed to pass other vessels only at certain points on the river.

LNG vessels, the Coast Guard said, also will be protected by a 500-yard "exclusion zone." Other ships will be allowed through the zone at the Coast Guard's discretion.

But federal officials have kept the bulk of the plan secret, citing national security concerns. How, the port officials wonder, will the strict security measures affect their customers? And what can be done to assure the ports that their business interests will be secure?

"We are needing to better understand the impact of that vessel traffic on our existing customers," Ken O'Halloren, director of the Port of Longview, said this week.

"Clearly, the intention here is not to create any delays," he said. "We have some questions. We are anxious to have those answered."

Josh Thomas, a spokesman for the Port of Portland, said late last year, "Our primary concern is that it not impact the ability to get ships up and down the river without undue delays or obstructions."

And Lanny Cawley, the Port of Kalama's executive director, said his port also wants to know more about how the terminal would affect shipping traffic.

NorthernStar expects as many as 11 LNG carriers would navigate the 38-mile route up the river each month and dock at its terminal, across the river from Puget Island.

Chuck Deister, a NorthernStar spokesman, said the company has developed a "traffic management plan" with the help of shippers, river pilots and the ports.

"Our ships will not be a burden on the system," he said.

And even if the LNG terminal were running at full capacity --- which NorthernStar says would be unlikely --- traffic on the river would "still be below historic highs," Deister said.

In addition, NorthernStar provided an excerpt from a report, commissioned last year by the company, that downplays the possibility of delays on the river.

"There has been significant and understandable concern about the potential for disruption to 'routine business' and scheduling that LNG carriers may introduce," said the report, by Parsons Brinkerhoff, a consulting firm with offices in the United States, Asia, Europe and the Middle East.

But, it said, data shows "that LNG carrier traffic will not impact the scheduling of vessel arrivals." It also said there are "mechanisms for efficiently integrating inbound LNG carrier traffic into existing and projected traffic flows."

Introducing LNG to the river, the report said, will amount to "business as usual."

Northern Star said the report's full text is not yet available.

Paulson, of the Port of Vancouver, said a final Environmental Impact Statement, expected sometime this year from the Federal Energy Regulatory Commission, may illuminate the matter further. But, he said, "How it works in practicality is going to have to be worked out likely after (the terminal is) done, if it's done."

Asked if that's a big gamble for a port to take, Paulson said, "Sure, and it worries me."

He said he believes NorthernStar representatives are "honorable folk" who will be "true to their word."

But, Paulson said, he also worries that the Coast Guard may change the regulations in the years to come if there were an accident involving LNG or another significant event like the attacks of Sept. 11, 2001.

In that case, he said, "You're stuck with the plant, and what are you doing to do with it? You're not going to shut it down. And other industry is going to have to adjust."

Report: oil, LNG tankers vulnerable

By Eugene D. Hubbard
August 27, 2006

The energy companies are well aware that there is no shortage of domestic natural gas in the United States now nor into the next century. This is well-documented. Even so, they are proposing seven (at last count) liquefied natural gas terminals in Southern and Baja California. That's at least two to three times the natural gas that our state could possibly use or store. Unsurprisingly, the current "energy crisis" manifested itself after secret meetings between Vice President Dick Cheney and energy industry leaders.

At present, Southern California is fed most of its natural gas via three major pipelines: "Kern River," "Trans Western" and "El Paso." But, Sempra Energy wants to rescind its pipeline reservations and future gas contracts on all of these domestic gas pipelines into Southern California.

Indeed, Sempra has already been granted a partial reduction of domestic natural gas flow into Southern California on two of the major pipelines by the California Public Utilities Commission.

This reduction will subtract 1.4 billion cubic feet a day, which is about 25 percent of our daily usage of natural gas.

If Sempra is successful in shutting down the flow of natural gas into Southern California, it will create a genuine energy crisis here. But with LNG terminals, Sempra can replace domestic gas with higher-priced LNG-sourced natural gas.

A report titled "California: Energy Crisis II," written by Kelpie Wilson and Marc Ash, states that Sempra Energy will create a huge "vertical structure" by shipping the LNG to its Costa Azul (Baja California) terminal, then selling it to its subsidiary Sempra Trading. This company will, in turn, sell it to Sempra-owned San Diego Gas & Electric and Sempra-owned Southern California Gas Co., which will then sell it to its customers. This is a perfect setup for price fixing.

What about the excess gas from LNG that will glut Southern California if all the proposed terminals are built? The answer lies to the east.

The Rocky Mountain states hold, at present, one-fourth of the proven natural gas reserves in the Lower 48. One of the largest natural gas fields is "Wamsutter" in southwestern Wyoming, which provides natural gas to Southern California's "Kern River" pipeline.

A new pipeline, stretching from Wamsutter to Ohio, is being planned by "Rockies Express Pipeline." It will be a gigantic 42 inches in diameter and 1,600 miles long, and will carry up to 2 billion cubic feet a day. The company is co-owned by none other than Sempra Pipeline and Storage, a unit of Sempra Energy, and the pipeline is currently under federal review.

With some of the largest production increases of natural gas occurring in the Rockies, there is a flurry of new gas pipeline expansion proposals, all slated to go eastward out of the Rockies. Not one is headed west toward California. It is apparent that Rockies gas is being redirected from traditional destinations such as California, Nevada and local markets, to Midwestern and Northeastern markets.

The new LNG facilities will need mainline pipelines also to move gas to major markets.

It becomes clear that locking Southern California into LNG will free up the major pipelines. They can then be configured to carry billions, or perhaps trillions, of dollars of LNG-sourced natural gas to Midwest markets as well.

If this is allowed to happen, Southern California will be effectually locked into a noncompetitive LNG monopoly, as there never can be any domestic natural gas flowing into Southern California. Once we lose our pipeline reservations and contracts, that's it. We can't get them back. Prices can then soar unchecked.

"LNG Gate." Yes.

— Eugene D. Hubbard lives in Oxnard.

This letter form Peter DeFazio followed a phone call by Cheryl Johnson about re-authorization of the Pipeline Safety Act.