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LNG in Oregon
In August 2005, President Bush signed into law the Energy Policy Act of 2005 giving the Federal Energy Regulatory Commission (FERC) exclusive authority to approve or deny the siting, construction, expansion or operation of LNG terminals located onshore or in state waters. Recognizing the importance of participating in the federal review process, the Governor designated the Oregon Department of Energy (ODOE) as the lead state agency for ensuring that Oregon’s interests are addressed in the federal FERC siting process for LNG facilities and associated pipeline projects.  Additionally, ODOE has been delegated the responsibilities for emergency preparedness for LNG facilities (ORS 469). This means that it is ODOE’s responsibility to ensure there is a plan in place to protect citizens from LNG leaks and fires, should a terminal be built, and to provide oversight throughout the life of the project.
 
The tabs below will take you more in-depth into the issues surrounding LNG.
 
Background
LNG is natural gas in a liquid form.  It is turned into a liquid by cooling the gas to around -260°F (-160°C). This shrinks the volume of the gas 600 times, making it easier to store and transport to markets around the world.  When LNG reaches its destination, it is heated at a regasification facility, which returns it to a gas form. It is then piped to homes, businesses and industries.
 
Beginning in the early-to-mid 2000s, a number of energy companies and developers began investigating the potential of constructing Liquefied Natural Gas (LNG) import terminals in multiple locations in Oregon – both along the Columbia River and near Coos Bay on the Pacific Coast.  The intent was to bring natural gas from large natural gas producing countries for use in the Western United States.  At that time, the siting of such facilities fell within the purview of Oregon’s Energy Facility Siting Council. 
 
In August 2005, President Bush signed into law the Energy Policy Act of 2005 giving the Federal Energy Regulatory Commission (FERC) exclusive authority to approve or deny the siting, construction, expansion or operation of LNG terminals located onshore or in state waters.  Recognizing the importance of participating in the federal review process, the Governor designated the Oregon Department of Energy (ODOE) as the lead state agency for ensuring that Oregon’s interests are addressed in the federal FERC siting process for LNG facilities and associated pipeline projects.  Additionally, ODOE has been delegated the responsibilities for emergency preparedness for LNG facilities (ORS 469). This means that it is ODOE’s responsibility to ensure there is a plan in place to protect citizens from LNG leaks and fires, should a terminal be built, and to provide oversight throughout the life of the project.
 
Originally, there were five proposals to build import terminals in Oregon, four on the Columbia River and one in Coos Bay.  Today, two proposals remain active.  They include the Jordan Cove Energy Project (JCEP) in Coos Bay and Oregon LNG in Warrenton. 
 
JCEP and the Pacific Connector Gas Pipeline applied to FERC in December 2007 for approval of the import terminal and associated pipeline.  An Environmental Impact Statement (EIS) for both projects was issued in May 2009, leading to FERC approval of the joint terminal and pipeline project in December 2009. 
 
Meanwhile, Oregon LNG and the Oregon Pipeline Company filed an application with FERC in October 2008 to build an import terminal and associated pipeline.  However, before FERC issued a decision on this project, new technology allowed access to large shale-gas reserves in the United States and Canada, changing gas supply and demand.  As a result, operating LNG import terminals around the country were mothballed and proposed import terminals were shelved or reconceived as export terminals.
 
In 2012, both JCEP and Oregon LNG notified FERC of the intent to change their original project proposals to export terminals with import capabilities. Both Oregon LNG and JCEP entered pre-filing status to explore the feasibility of liquefaction export terminals that would be built and operated at the originally proposed sites. 
 
Proposed Terminals
JCEP.jpgJCEP proposes building an export terminal on a 400 acre site on the north shore of Coos Bay, Oregon.  The site is approximately seven miles up the channel that connects the bay to the Pacific Ocean, and about 1.2 miles northwest of the North Bend Municipal Airport.   The export terminal would consist of two full containment storage tanks, each with a capacity of 160,000 cubic meters.  Also included is a slip for LNG carriers, cryogenic pipelines, four liquefaction trains, and a power plant.  The 440 megawatt natural gas-fired South Dunes Power Plant’s primary purpose is to provide power to the JCEP facility.  However, the plant could have the capacity to provide power to the local electric grid.  JCEP anticipates handling up to 90 ships per year when operational. 



The proposed Pacific Connector Gas Pipeline project (PCGP) would connect the JCEP terminal to existing pipeline systems that converge at Malin, Oregon.  From interconnects near Malin, just north of the California border, the 230 mile pipeline would transport product northwest through Klamath, Jackson, Douglas, and Coos counties to the Jordan Cove LNG terminal in Coos Bay. From there, the natural gas will be liquefied for transport via ocean-going tankers to markets on the Pacific Rim. For more information about the JCEP, go to http://www.jordancoveenergy.com/
 
 
federal siting process
 

Siting LNG export terminals can be a lengthy process.  Developers must work with several different federal agencies in order to obtain a number of federal permits to build a terminal, associated facilities, and pipeline infrastructure to export LNG from the United States to foreign countries.

LNG developers are responsible for researching, analyzing, and preparing various reports, analysis, forms, and applications to FERC and its federal cooperating agencies and to state and local regulatory agencies during the course of their review of the applicants’ proposed project. This includes, but is not limited to:

  • Submitting a Letter of Intent
  • Drafting resource reports for an Environmental Impact Statement
  • Conducting Waterway Suitability Assessment
  • Developing safety and security plans
  • Completing supplemental modeling studies as appropriate

 
The table below provides a summary of the federal siting process followed by an expanded description of each lead federal agency and their respective role and authorities in siting LNG terminals in the United States. 

 
Federal Energy Regulatory Commission
Authority
Process
FERC is responsible for authorizing the siting, construction, and operation of onshore LNG facilities. Once it receives an application, FERC is required to conduct an EIS to determine whether the agency will issue a permit to the applicant. FERC’s EIS evaluates environmental impacts to the region ranging from air quality, biological impacts, cultural and socioeconomic impacts, as well as safety and security impacts for each proposed project.  FERC’s actions include:
  • Issuing notice of intent to prepare an EIS and open scoping period to seek public comments
  • Reviewing of Draft Resource Reports to identify deficiencies, data gaps or areas requiring clarification by applicant
  • Issuing a Draft EIS for public review and comment
  • Considering and addressing all public comments prior to issuing Final EIS with recommendation to approve, approve with conditions, or deny the application
  • FERC Commissioners issue or deny application
U.S. Department of Energy
Authority
Process
USDOE is authorized to issue licenses for exporting LNG to countries with Free Trade Agreements (FTA) with the United States.  USDOE also considers permitting the export of LNG to non-FTA countries if such action would be in the national interest and not result in adverse economic impacts on the domestic market. USDOE relies on two economic impact studies to determine  domestic economic impacts from LNG exports to Non-FTA countries:
  • Part 1 – U.S. Energy Information Administration study: Effect of Increased Natural Gas Exports on Domestic Energy Markets, January 2012.
  • Part 2 – Economic Consulting Analysis Study: Macroeconomic Impacts of LNG Exports from the United States, December 2012.
  • USDOE considers economic impact study results and approves or denies license to export LNG to Non-FTA countries.
U.S. Fish & Wildlife Service and National Oceanic & Atmospheric Administration
Authority
Process
FERC consults with USFWS and NOAA on whether proposed projects would likely jeopardize the continued existence of species protected under the Endangered Species Act or destroy or adversely modify their critical habitats. USFWS and NOAA evaluate the potential effects of a proposed project on proposed, endangered, threatened, and sensitive fish, animal, and plant species and their habitats.  This includes:
  • Reviewing FERC’s Biological Assessment
  • Issuing a Biological Opinion
U.S. Coast Guard
Authority
Process
The Coast Guard exercises regulatory authority over waterfront LNG facilities and the associated LNG vessel traffic, which affect the safety and security of port areas and navigable waterways, under executive Order 10173; the Magnuson Act (50 U.S.C. § 191); the Ports and Waterways Safety Act of 1972, as amended (33 U.S.C. § 1221, et seq.); the Maritime Transportation Security Act of 2002 (46 U.S.C. § 701), and the Safety and Accountability For Every Port Act (46 U.S.C. § 70101).

The Coast Guard is also responsible for matters related to navigational safety, vessel engineering and construction safety standards, and matters pertaining to the safety of facilities or equipment located in or adjacent to navigable waters. This includes working with state and local emergency response organizations to develop and maintain the plans and procedures to protect public health and safety.

Waterway Suitability Assessment and Letter of Recommendation to FERC – Evaluates LNG waterway transit route safety and security concerns.

Emergency Response Plan – identifies procedures, resources, equipment, and systems to prepare decision-makers and responders to respond to and recover from LNG emergencies.

Security Plan – identifies procedures, resources, equipment, and systems to deter security threats to the LNG facility.

Facility Operations Manual – describes the transfer system, mooring areas, connections, control rooms, piping and electrical diagrams. Identifies the number of personnel required and their specific duties. Requires procedures for transfer operations, start up, gauging, cool down, venting, and shut down.

LNG Vessel Transit Management Plan – identifies procedures, resources, equipment, and systems for an LNG vessel to safely and securely transit from U.S. territorial waters to the marine facility and back to the territorial boundary.

 

FERC Application Process

FERC is the lead federal agency that will determine whether JCEP or Oregon LNG will be issued an Order Granting Authority under Section 3 of the Natural Gas Act for the construction and operation of an LNG export terminal in Oregon.  The process begins when the applicant requests the use of FERC’s pre-filing process.  Once an application is filed with FERC, FERC formally approves the NEPA Pre-Filing Process, issues a Docket Number to the Applicant, and begins the project review. 

Resource Reports - Each applicant prepares draft Resource Reports for submittal to FERC staff to aid their preparation of an EIS to fulfill the requirements of the National Environmental Policy Act (NEPA). The purpose of the EIS is to inform the public and the permitting agencies about the potential adverse and/or beneficial environmental and safety impacts of proposed projects and their alternatives.  The Resource Reports are divided into the following subjects:

  1. General project description 
  2. Water use and quality 
  3. Fish, wildlife, and vegetation 
  4. Cultural resources 
  5. Socioeconomics 
  6. Geological resources 
  7. Soils 
  1. Land use, recreation, and aesthetics 
  2. Air and noise quality 
  3. Alternatives
  4. Reliability and safety 
  5. PCB contamination (not required for this project)
  6. Engineering and design material
 
Stakeholders are given the opportunity to comment on the resource reports through public meetings and postings.  Any issues identified are addressed prior to final environmental documents and approvals being issued.  The schematic illustrates the steps involved, and the points where the public will be given the opportunity to comment on the pre-filing process.

Environmental Impact Statement - After conducting scoping meetings, considering public comments, and reviewing the resource reports, FERC issues a Draft EIS for review and comment.  Upon receiving and responding to comments on the Draft EIS, FERC revises the document as appropriate and releases a Final EIS.

FERC Approval and Permit Issuance– If FERC determines that the proposed LNG project is in the public interest, the agency will approve the application. Upon Commission approval, the developer will receive:

  1. A Commission Order stating its decision on whether to approve construction and operation of the LNG terminal; 
  2. Market rate authority; and
  3. Conditions that must be met prior to construction such as working with federal, state, and local emergency response organizations to develop safety and security plans for the facility and waterway to protect public health and safety in the event of an LNG emergency. 
    Additional steps must be taken by the developer prior to construction.  Each developer must also secure environmental permits and clearances from the State of Oregon.  See below under the “State of Oregon Environmental Permits & Clearances” section for more details about state permits and clearances. 

Design and Construction Monitoring – After a developer receives FERC approval for the project and has met all pre-construction conditions required by the FERC Order, FERC authorizes the commencement of construction.  The company is then required to file monthly reports to FERC detailing the following:

  1. Construction activity summary; 
  2. The status of any outstanding project permits; 
  3. An updated project schedule; and 
  4. Details of compliance with environmental conditions.

FERC will also inspect the project site as frequently as needed throughout the entire construction process to identify any deviations from the approved facility. 

Commencement of Service – Prior to commencement of service of the LNG facility, the developer must receive written approval from FERC. Only after complying with all pre-operation conditions listed in the Commission Order would a company receive authorization to begin operation.  Each LNG facility under FERC jurisdiction is required to file semi-annual reports to summarize:

  1. Plant operations; 
  2. Maintenance activity; and 
  3. Abnormal events for the previous six months.

In addition, FERC staff periodically conduct inspections (focusing on equipment, operation, and safety) of each facility throughout its operational life. 

USDOE LNG Export Permit

Not only do LNG developers have to meet all conditions established by FERC to obtain a permit to build a terminal, marine facilities, and associated pipeline infrastructure, applicants must apply for an export license from USDOE to export natural gas to foreign countries. There are two types of export licenses that LNG developers can seek:

  1. Limited License – This allows LNG developers to export gas to countries with free trade agreements (FTA) with the U.S. The U.S. has FTAs with Australia, Bahrain, Canada, Chile, Colombia, Dominican Republic, El Salvador, Guatemala, Honduras, Jordan, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, Republic of Korea and Singapore.
  2. Full License – This allows LNG developers to export gas to all countries including those without an FTA with the United States. Federal law stipulates that LNG agreements with countries that are U.S. free trade partners are automatically approved, but applications involving other nations have to be reviewed to determine if they would be in the national interest.
While the agency must quickly approve LNG exports to FTA countries, USDOE delayed non-FTA approvals until the agency completed two studies on the domestic impacts of LNG exports. They include:

 

  • Part 1 – U.S. Energy Information Administration study: Effect of Increased Natural Gas Exports on Domestic Energy Markets, January 2012. This study concluded that exports would increase domestic gas prices, which resulted in the Part 2 study.
  • Part 2 – NERA Economic Consulting Analysis Study: Macroeconomic Impacts of LNG Exports from the United States, December 2012. This second study looked at the broader economic impacts of exports. The study concluded that the benefits that come from export expansion more than outweigh the losses from reduced capital and wage income to U.S. consumers. As a result, this study concluded that LNG exports have net economic benefits in spite of higher domestic natural gas prices.
Oregon legislators strongly urged USDOE to weigh the specifics of each application to ensure that unfettered natural gas exports do not harm U.S. consumers and manufacturers. With these studies completed, USDOE is now expected to act on LNG export permitting. Industry experts say these findings support USDOE approving a maximum export of 6-7.4 billion cubic feet per day (Bcf/d). To date, USDOE has authorized two terminals to ship LNG to non-FTA countries. The first terminal is Cheniere's Sabine Pass terminal in Cameron Parish, Louisiana, which was approved in May 2011 to export 2.2 Bcf/d of LNG for 20 years. In May 2013, USDOE conditionally approved Freeport LNG's request to export 1.4 Bcf/d of LNG for 20 years from its Quintana Island, Texas terminal. This conditional approval is subject to environmental review and final regulatory approval. USDOE has 13 applications pending. For a summary of the LNG export applications, go to http://fossil.energy.gov/programs/gasregulation/reports/summary_lng_applications.pdf

 

USFWS & NOAA Process

By regulation, a Biological Assessment (BA) is prepared for “major construction activities” considered to be Federal actions significantly affecting the quality of the human environment as referred to in the National Environmental Policy Act of 1969 [(42 U.S.C. 4332(2)(C)].  A BA is a required part of FERC’s EIS process for proposed LNG projects because listed species and critical habitat may be present in the proposed locations of these facilities. A BA also may be recommended for other activities to ensure the agency’s early involvement and increase the chances for resolution during informal consultation. Recommended contents for a BA are described in 50 CFR 402.12(f).

USFWS and NOAA evaluate potential effects of a proposed project on proposed, endangered, threatened, and sensitive fish, animal, and plant species and their habitats.  The BA is used by FERC to create a Biological Opinion for the agency’s final EIS for each proposed project to determine that the project is consistent with federal environmental goals. 

Under Endangered Species Act section 7, FERC is required to insure that any action authorized, funded, or carried out by proposed LNG projects is not likely to jeopardize the continued existence of any threatened or endangered species or result in the destruction or adverse modification of designated critical habitat.  As a result, before a permit can be issued by FERC, "a written statement setting forth the Secretary's opinion and a summary of the information on which the opinion is based" that the issuance of the permit is not likely to jeopardize any protected species must be obtained.

USCG Safety & Security Process

USCG exercises regulatory authority over waterfront LNG facilities and the associated LNG carrier traffic, which affect the safety and security of port areas and navigable waterways.  In 2004, USCG entered into an interagency agreement as a cooperating agency in FERC’s NEPA analysis. Under the agreement, USCG assesses the safety and security of LNG carrier operations while at berth and during transit to and from the LNG facility while in U.S. territorial waters. 

Waterway Suitability Assessment– As part of FERC’s “Pre-Filing” process, all applicants provide the USCG Captain of the Port of the proposed location with a Letter of Intent and a Preliminary Waterway Suitability Assessment (WSA). The Letter of Intent and Preliminary WSA provides a brief discussion of the port characterization, characterization of the LNG facility and LNG tanker route, risk assessments for maritime safety and security, risk management strategies, and resource needs for maritime safety, security, and response.
Applicants must subsequently provide a Follow-on WSA detailing:  
  • Credible security threats and safety hazards to LNG marine transportation in that port
  • Risk management measures as appropriate
  • Resources (federal, state, local, and private sector) needed to carry out risk management measures
  • Existing resources available at the port
  • Steps applicants will take to address resource gaps and provide a safe and secure environment for LNG marine traffic
Upon receiving the document, USCG has 90 days to review and validate the applicant’s Follow-on WSA.  USCG may convene a WSA Validation Committee of federal, state, local, and industry experts from the region to examine the Follow-on WSA to determine if the document presents a realistic and credible analysis of the public safety and security implications of introducing LNG marine traffic into the port, and the measures intended to effectively manage the risks.  Areas the WSA Validation Committee must assess include whether:
  • Appropriate experts and stakeholders were consulted in the development of the Follow-on WSA.
  • Appropriate critical infrastructure and key assets along the proposed route were accurately identified.
  • Population density figures used were current.
  • Credible scenarios were considered, risk management measures were identified, and impact of risk management measures on other port stakeholders were addressed.
  • Resources necessary to implement risk management measures were identified to perform expected tasks.  This includes sufficient personnel, equipment, training, and funding is available and sustainable to perform tasks throughout the life of a project. 
All WSA Validation Committee members must sign non-disclosure agreements, which prevent them from releasing security sensitive information (SSI) and company proprietary information outside WSA meetings. However, once a WSA Validation Committee completes its review and validation of the WSA, the USCG Captain of the Port drafts a . Letter of Recommendation (LOR) with an LOR Analysis for delivery to FERC (public). Sensitive Security Information is transmitted to FERC in a Supplementary LOR Analysis (non-public). While the LOR provides a preliminary conclusion as to the suitability, it does not identify specific vulnerabilities, mitigating measures, nor divulge any other information that could compromise security measures.  For example, while the LOR might discuss the availability of law enforcement assets to conduct surveillance or perform escorts, it would not describe specific techniques, staffing levels, and weapon capabilities or identify available assets by agency. As a result, the LOR is a public document summarizing findings from the LOR on the suitability of the waterway for LNG marine traffic that FERC incorporates into the Draft EIS and the Final EIS.  
 
The USCG requires the applicant to annually update the WSA as appropriate. The State of Oregon participates in the annual reviews.  
 
For more information on USCG’s WSA process, see 2011 NVIC 01-2011Guidance Related To Waterfront Liquified Natural Gas (LNG) Facilities.

LNG Emergency Response Plan

In accordance with the Energy Policy Act of 2005, section 311(d) and the Natural Gas Act, 15 U.S.C. § 717B, LNG operators are required to develop an Emergency Response Plan (ERP), and a Cost Share Plan (CSP).   Because the ERP should be developed and approved prior to construction, and the construction phase can take over 3 years, the Coast Guard recommends the content of the ERP be reviewed annually during the construction phase of the project.  This review should be conducted in conjunction with the annual WSA review, to determine if both the WSA and ERP are still accurate and sufficient.

LNG developers are to work with USCG, the State of Oregon, and local emergency response organizations in the affected communities to develop and maintain ERPs.  See “the State of Oregon Safety and Security” section for more information. 
 
In addition, JCEP and Oregon LNG are required to develop and maintain a cost sharing plan to cover all costs (personnel, resources, facilities, equipment, and systems) incurred by safety and security activities to prepare for, respond to, and recover from LNG emergencies throughout the life of the project.  Both emergency response and cost-share plans must be approved by USCG, the State of Oregon, and local emergency response organizations prior to facility construction.  All safety and security personnel must be hired and trained with facilities, equipment, and systems in place and tested prior to facility operations.
 
Security Plan

All vessels and ports worldwide that engage in international trade must comply with the International Ship and Port Security code. In addition, foreign-flagged vessels entering U.S. waterways must meet the security requirements of the Maritime Transportation Security Act of 2002.  LNG facilities and carriers are possible terrorist targets and may increase a region’s threat level. The security plan must identify specific:

  1. Risks and vulnerabilities;
  2. Security strategies needed to reduce vulnerabilities;
  3. Law enforcement assets needed to conduct surveillance or perform escorts, and other measures; and
  4. Staffing levels, weapon capabilities, and a list of available assets by agency.
The security plan should also describe in detail the role and responsibilities of each law enforcement agency and include interagency coordination procedures to conduct security tasks at the facility and along the waterway under normal operations when there is no LNG carrier at the terminal.

Detailed requirements for a Facility Security Plan can be found in 33 CFR §105.

Facility Operations Manual

Prior to receiving the first “cool down” cargo, the facility Operations Manual must have been marked “Examined” by the USCG. This manual must include a description of the transfer system including mooring areas, transfer connections, control rooms, and diagrams of the piping and electrical systems. It must also include the duties of each person assigned for the transfer operations, the maximum relief valve setting or the maximum allowable working pressure of the transfer system, telephone numbers for the facility, facility supervisors, persons in charge of shoreside transfer operations, and security personnel. The manual must include procedures for transfer operations, gauging, cool down, pumping, venting and shutdown.

LNG Vessel Transit Management Plan

USCG also requires LNG developers to develop and maintain an LNG Vessel Transit Management Plan describing the conditions and activities necessary to allow LNG carriers into port, transit within the port to the LNG marine terminal, conduct cargo transfer operations, and return the LNG ship to sea.  USCG requires all LNG carriers to submit an electronic “Notice of Arrival” 96 hours prior to entering the port of destination.  Once a notice is received, USCG begins vetting the LNG carrier, crew, and cargo to assess the level of risk presented by the carrier to the port and its users as prescribed in the LNG Vessel Transit Management Plan. This plan identifies the roles and responsibilities of the LNG developer, USCG, state, and local agencies and describes the interagency coordination procedures to implement operational safety and security tasks undertaken before, during, and after each LNG carrier transit.

state siting process

While FERC has exclusive authority to site LNG terminals in the United States, its authority is conditioned on the applicant's ability to comply with other statutory requirements for various aspects of the project. The federal government has delegated authority to the states to regulate various federal statutes such as the Clean Water or Clean Air Acts.  LNG developers must comply with conditions imposed by states carrying out these regulatory authorities. 

As the lead state agency overseeing Oregon’s interests in the siting of LNG facilities in the state, ODOE will coordinate the participation of state agencies in the federal siting process. 

The table below provides a summary of the state of Oregon’s authorities followed by an expanded description of each lead state agency and their authorities in the siting process of LNG terminals in Oregon. 

State of Oregon
Authority
Process
Protecting Oregon’s Interests in the Federal Siting Process

Lead Agency: ODOE Energy Facility Siting Division

ODOE is responsible for overseeing Oregon’s interests in the siting of LNG terminals in the state.  Activities include:
  • Coordinating the state’s review and comments of draft resource reports submitted by LNG developers
  • Coordinating the state’s review and comments of FERC’s draft and final Environmental Impact Statements
  • Coordinating other state activities involving the federal siting process as directed by the Governor
Safety and Security

Lead Agency: ODOE Nuclear & Energy Emergency Preparedness Division

ODOE is responsible for ensuring the protection of public health and safety in the event of an LNG emergency at a terminal or along the LNG vessel transit route.  Activities include:
  • Reviewing, approving, approving with conditions, or denying LNG developer emergency response plans.
  • Reviewing, approving, approving with conditions, or denying LNG developer cost share plans.
  • Establishing minimum state standards for LNG emergency preparedness and response in Oregon.
  • Establishing a memorandum of Understanding (MOU) to ensure LNG developers are committed to meeting state standards for LNG emergency preparedness in Oregon. (Jordan Cove Emergency Preparedness MOU, Jordan Cove CO2 and Retirement MOU)
  • Oversee safety and security activities throughout the life of each LNG project sited, constructed, and operated in Oregon.
Coastal Zone Management Act

Lead Agency: Oregon Department of Land Conservation and Development (DLCD)

The mission of Oregon’s Coastal Management Program is to work in partnership with coastal local governments, state and federal agencies, and other stakeholders to ensure that the state's coastal and ocean resources are managed, conserved, and developed consistent with statewide planning goals. The federal Coastal Zone Management Act provides DLCD with a unique regulatory authority to review various federal actions in or affecting the state's coastal zone for consistency with the Coastal Management Program. LNG applicants must demonstrate to DLCD that facility construction and operation activities comply with enforceable policies of Oregon’s Coastal Management Program. DLCD’s review process for consistency with the CZMA:
  • Applicant submits Coastal Zone Certification to DLCD indicating proposed activity complies with Oregon’s Coastal Management Program
  • Applicant provides DLCD all necessary data and information to support the certification
  • DLCD reviews applicant’s Coastal Zone Certification for consistency with Oregon’s Coastal Management Program and:
    • Consults other state agencies as applicable
    • Seeks public input
  • DLCD issues “coastal concurrences" for approvals or  "coastal objections” for denials
Clean Water Act

Lead Agencies: Oregon Department of Environmental Quality (DEQ) and Oregon Department of State Lands (DSL)

Section 401 of the federal Clean Water Act requires that any federal license or permit to conduct an activity that may result in a discharge to waters of the United States must first receive a water quality certification from the state in which the activity will occur.  DEQ is responsible for issuing water quality certifications in Oregon.  Section 404 of the Clean Water Act provides states with authority over dredge-and-fill activities in wetlands and other waters that require permits from the Corp of Engineers and DSL for discharge of dredged and fill material.

In Oregon, the Corp of Engineers and DSL offer a Joint Permit Application, submitted to both agencies, so that processing can happen concurrently.  In addition, DEQ and the Corp of Engineers offer a single public notice process for the permit and the DEQ 401 water quality certification. Activities include:

  • Applicant submits a Joint Permit Application to the Corp of Engineers and DSL for evaluation
  • Applicant submits water quality certification application to DEQ for evaluation
  • The Corp of Engineers publishes a Public Notice to solicit public comments for Section 404 permit (dredge and fill activities) and Section 401 water quality certification permit
  • DEQ conducts public hearing if necessary
  • DEQ determines whether to approve the application and issue a water quality certification permit, approve the application with conditions, or deny the application
The Corp of Engineers and DSL decide to approve the Joint Permit Application and issue a Section 404 permit, approve the application with conditions, or deny the application. DEQ’s water quality certification permit is required for Joint Permit Application approval.
Clean Air Act

Lead Agency: DEQ

LNG applicants must demonstrate to DEQ that facility construction and operation activities as well as LNG vessel activities comply with enforceable policies of Oregon’s Clean Air Act.  Activities include:
  • Applicant submits a Notice of Intent to DEQ for review, which includes:  
  • description of the nature, location, design capacity, and typical operating schedule of the source
  • estimation of short-term/annual maximum amount and type of regulated air pollutant emitted with calculations
  • analysis of air quality and visibility impact of the source
  • DEQ reviews and evaluates the application
  • DEQ approves or denies a Clean Air Act permit

Safety and security

 
The LNG import-export terminals proposed for siting along the Oregon coast and Columbia River would be subject to natural disasters like earthquakes, tsunamis, floods, fires, and winter storms.  LNG import-export terminals would also be subject to man-made events such as industrial accidents (including fire), spills, terrorism, bomb threats, civil disturbances or violence in the work place.  These events could affect Oregon citizens working at these facilities, living adjacent to the terminals, or working, living, or recreating along the LNG vessel transit routes. 
 
Should an LNG import-export terminal be built and operate in the state, ensuring the health and safety of Oregonians in the event of LNG emergencies is the responsibility of the Governor.  The Governor designated ODOE the lead state agency to protect Oregonians from LNG emergencies involving leaks or fires.  These events could jeopardize the health and safety of Oregon citizens.
 
As the Governor’s designated lead state agency protecting Oregon’s interests in all aspects of the siting of LNG facilities, ODOE has been working with LNG developers, USCG, state agencies, and local emergency response organizations since 2004.  ODOE’s goal is to ensure that all safety and security issues are identified and resolved adequately to protect public health and safety should FERC approve the construction and operation of one or more LNG terminals in Oregon.
 
Emergency Response Plan – FERC designated USCG to work with LNG developers, ODOE, and affected local emergency response organizations to develop a comprehensive facility and waterway ERP for each proposed project.  The ERP is designed to identify activities in all areas of emergency management, which include:
  • Mitigation – activities which eliminate or reduce the probability of an LNG disaster.
  • Preparedness – activities to train and prepare decision-makers and emergency workers to respond to an LNG event prior to an actual incident. This includes better understanding the LNG infrastructure and agency roles and responsibilities, identifying key assets, and conducting drills and exercises that test the effectiveness of response plans and strategies to more effectively protect public health and safety in the event of an emergency.
  • Response – activities to be taken to prevent loss of life and property and to provide emergency assistance during an incident as described in the ERP.
  • Recovery/Restoration – short and long-term activities to return all systems to normal status.
Cost Share Plan – Developing the ERP includes identifying resource gaps such as personnel, facilities, equipment, and systems to implement the ERP.  FERC requires LNG developers to develop a cost-share plan to pay for state and local emergency preparedness activities and resource needs throughout the life of each proposed project.
 
Memorandum of Understanding –With each LNG developer having its own approach and interpretation for what is considered “adequate” emergency preparedness activities and resource needs, ODOE established minimum state standards for LNG emergency preparedness and response in Oregon.  ODOE formalized the established minimum state standards for LNG emergency preparedness and response into a MOU.  FERC recognizes the importance of the MOU and now requires each proposed LNG developer to enter into a MOU with ODOE.  The MOU demonstrates an LNG developer’s commitment to providing adequate safety and security planning activities and resources throughout the life of the project.  This includes providing the necessary funding required to implement the ERP.
 
NOTE: Signing the MOU with ODOE shows ONLY an LNG developer’s intent to meet state safety and security standards. Developers must provide ODOE three documents for review and evaluation of whether an applicant’s emergency preparedness approach meets state established standards. This includes a:
  1. Emergency Response Plan;
  2. Resource List that identifies gaps in personnel, facilities, equipment and systems needed to implement the ERP; and
  3. Cost-Share Agreement with state and local agencies for activities and resources identified in the ERP and Resource List. 
USCG requires state approval of the ERP prior to construction.
 
Oversight – Should one or more LNG terminals be sited, constructed, and become operational in Oregon, ODOE is responsible for overseeing all emergency preparedness activities throughout the life of each project. 
 

siting power plants

 
JCEP has proposed a power plant as part of its LNG export project.  The purpose of the South Dunes Power Plant would be to provide the large volume of electricity needed to liquefy the natural gas in preparation for export. The power plant is the only component of the project proposal that is not under FERC Jurisdiction.  The 440 megawatt capacity of the proposed power plant places its construction and operation under the jurisdiction of the Oregon Energy Facility Siting Council.  ODOE's Energy Facility Siting Division employees serve as staff members to EFSC.  The process begins with a Notice of Intent to ODOE. The Notice of Intent describes the proposed facility in general terms allowing ODOE to gather public comment and enables state and local agencies to identify laws, regulations and ordinances that apply to the proposed facility. The second phase begins when the applicant submits a Preliminary Application to ODOE and ends when EFSC decides whether or not to issue a site certificate.
 
If a proposed energy facility meets the standards identified, EFSC must issue the site certificate. If the facility does not meet one or more of the standards, EFSC cannot issue the site certificate unless the applicant can show that the overall public benefits of the facility outweigh the damage to the resources protected by the standards the facility does not meet.  Staff makes recommendations to EFSC members on planned energy facilities based on their research and analysis. EFSC, however, makes the final decision on whether or not to approve a proposed energy project.  EFSC grants a Site Certificate if at least four of the seven members of EFSC approve the application. 
 
The Oregon State Legislature established the seven-member citizen-based group in 1975 to act on the state’s behalf when determining whether to site a proposed energy facility planned for Oregon. The governor appoints EFSC members, who apply a rigorous siting process to ensure that Oregon has an adequate energy supply while protecting its environment and public safety.
 

Coastal zone management act

 
The Coastal Zone Management Act of 1972 created the Coastal Zone Management Program and is administered by the National Oceanic and Atmospheric Administration. The key goals of the national CZMP are to:
  1. Protect natural resources;
  2. Manage development in high hazard areas;
  3. Give development priority to coastal-dependent uses; 4) provide public access for recreation; and 5) coordinate state and federal actions.
LNG applicants for federal licenses or permits must provide:
  1. A coastal zone certification indicating that the proposed activity complies with the enforceable policies of a specific state’s approved management program and will be conducted in a manner consistent with the program and
  2. All necessary data and information to support the certification.
 
DLCD is the state’s designated coastal management agency and is responsible for reviewing projects for consistency with Oregon’s Coastal Management Program (OCMP) and issuing coastal management decisions.  DLCD's reviews involve consultation with local governments, state agencies, federal agencies, and other interested parties as appropriate to determine project consistency with the OCMP.  DLCD's federal consistency decisions are called "coastal concurrences" for approvals and "coastal objections” for denials.  Objections can be based on an inconsistency with coastal program policies or a lack of sufficient information to determine consistency.  In the event of a formal DLCD objection, federal permits, licenses, and financial assistance grants cannot be issued and federal activities cannot proceed.
 
DLCD’s finding of inconsistency can be appealed to the Secretary of Commerce.  Questions about the CZMA consistency certification should be directed to DLCD. The federal CZMA provides six months for the state to complete its review of consistency certifications.
 

Clean water act

 
Section 401 - Section 401 of the federal Clean Water Act (CWA) requires that any federal license or permit to conduct an activity that may result in a discharge to waters of the United States must first receive a water quality certification (WQC) from the state in which the activity will occur.  In Oregon, DEQ is the agency responsible for issuing this certification. The certification declares that the discharge will comply with applicable provisions of Oregon’s CWA standards.  Section 401 authorizes DEQ to ensure that activities will meet water quality standards established by the state under the Clean Water Act. By ensuring a project does not degrade water quality, Oregon’s waters remain safe for a wide range of uses, such as drinking water, recreation, fish habitat, aquatic life, and irrigation.
 
Section 401 provides states with two distinct authorities.  This includes the power to:
  1. Indirectly deny federal permits or licenses by withholding certification and
  2. Impose conditions upon federal permits by placing limitations on certification.
 Federal permits cannot be issued without a 401 WQC from DEQ.
 
DEQ must complete a certification decision within a reasonable period of time, which cannot exceed one year.  However, actual durations of review vary based on the complexity of the project, the quality of the information provided, significance of water quality concerns raised during the public process, and the responsiveness of the applicant. DEQ coordinates with the U.S. Army Corp of Engineers (USACE) and multiple other agencies like National Marine Fisheries Service, U.S. Fish and Wildlife Service, U.S. Environmental Protection Agency (EPA), Federal Highways Administration, U.S. Forest Service, Oregon Department of Fish and Wildlife, Oregon Department of State Lands (DSL), Oregon Department of Geology and Mineral Industries, Oregon Water Resources Department, Oregon Department of Agriculture, Oregon Department of Forestry and other agencies as appropriate to evaluate the application. 
 
Section 404 – CWA Section 404 provides states with authority over dredge-and-fill activities in wetlands and other waters that require permits from USACE and DSL for discharge of dredged and fill material.Wetlands and waterways in Oregon are protected by both state and federal laws. Projects impacting waters often require both a state removal-fill permit, issued by DSL and a federal permit issued by USACE.  USACE administers the federal program under Section 404 of the federal CWA and Section 10 of the Rivers and Harbors Act.  EPA has the lead for enforcement under the federal CWA. The federal CWA has a provision enabling states to assume Section 404 regulation provided the state has a waterways and wetlands regulatory program equivalent to the federal program
 
In Oregon, USACE and DSL offer a Joint Permit Application, submitted to both agencies, so that processing can happen concurrently.  In addition, DEQ and USACE offer a single public notice process for the USACE permit and the DEQ 401 WQC. Applying and communicating with USACE, DEQ and DSL at the same time allows better coordination among all involved agencies and result in a smoother permit process. 
 
As soon as an applicant submits a Joint Permit Application to USACE and DSL, USACE determines if an existing 401 WQC will cover the project under a pre-certified Nationwide Permit or Regional General Permit.  If USACE determines that the project needs an Individual Permit or fits in a Nationwide category that has not been pre-certified, the applicant will have to submit all application materials and water quality information directly to DEQ to begin the evaluation. DEQ begins the evaluation when USACE publishes a Public Notice to solicit comments on the project. DEQ will request additional information if necessary. 
 
LNG applicants must demonstrate that the discharge of dredged or fill material would not significantly degrade the nation's waters and there are no practicable alternatives less damaging to the aquatic environment.  Applicants should also describe steps taken to minimize impacts to water bodies and wetlands and provide appropriate and practicable mitigation, such as restoring or creating wetlands, for any remaining, unavoidable impacts.
 
USACE cannot issue a permit until the 401 WQC has been issued or become waived. USACE issues a 30-day Public Notice and includes DEQs 401 WQC public notice. The intent is to have a single process to solicit comments from the public on the potential impacts of the proposed action under the USACEs authority, as well as impacts to water quality under DEQs authority. The process is described in OAR 340-048-0032 A public hearing may be requested and will be granted at DEQs discretion.  
 

Clean Air act

 
Under the Federal Clean Air Act, a state program must include the opportunity for an authorized state agency to review all new proposals with sources of air emissions before an owner or operator is allowed to begin construction. This applies to new sources and to changes or modifications of existing sources. The Oregon DEQ is a regulatory agency whose job is to protect and enhance the quality of Oregon's Environment.
LNG developers seeking a federal license must meet state Clean Air Act requirements for emission limitations that apply for new projects. All applicants must submit a Notice of Intent to DEQ. This includes providing a:
  1. Description of the nature, location, design capacity, and typical operating schedule of the source including specifications and drawings
  2. Estimate of the maximum amount and type of regulated air pollutant emitted on a short-term basis (e.g., hourly or daily) and yearly, with calculations;
  3. Analysis of air quality and visibility impact of the source including meteorological and topographical data, specific details of the models used and
  4. Other information necessary to estimate air quality impacts.
DEQ’s goal is to understand the types of activities conducted at the facility, the efforts to control emissions from the activities, and the quantities of emissions that result from the activities. The applicant will be asked to complete a number of different forms to provide adequate information to allow DEQ to determine whether or not to issue a permit under the state’s Clean Air Act standards for LNG facility construction and operations.This also includes LNG vessel based emissions for air pollutants from unloading activities and for the 24 hours when the vessel remains at the berth.If DEQ denies a Clear Air Act permit, the LNG facility cannot be constructed.

Natural Gas Pipeline Safety Authority and Oversight

NOTE: LNG must be returned to its gaseous state (natural gas) before product is piped to customers. This process is called re-gasification. LNG is gradually warmed from -260°F (-160°C) to a temperature of 32°F (0°C).  The U.S. Department of Transportation Pipeline and Hazardous Material Safety Administration and the Oregon Public Utility Commission’s Pipeline Safety Division regulate natural gas pipeline safety.
The U.S. has more than 300,000 miles of mainline onshore and offshore natural gas pipelines connected to a 1.5 million-mile network, including gas gathering, distribution and storage facilities serving approximately 150 million consumers.

Before a pipeline company obtains authorization to construct and operate an interstate transmission pipeline, the company must first file a detailed project plan with the FERC. This plan is formally called an application for a Certificate of Public Convenience and Necessity (Certificate Application). The Certificate Application is a comprehensive document that describes the proposed project, its purpose, need and benefits, along with potential environmental impacts.

Interstate pipelines are regulated by the U.S. Department of Transportation’s Pipeline and Hazardous Material Safety Administration (PHMSA), which imposes a broad range of construction and operational standards.  All pipeline companies must meet or exceed PHMSA requirements for pipeline design, material specifications, construction, maintenance and testing before a pipeline can be placed into service.  For more information, visit www.phmsa.dot.gov

During construction, PHMSA and the Oregon Public Utility Commission’s Pipeline Safety Division inspect the fabrication and construction of the pipeline.  All welds linking the joints of the pipeline are x-rayed to ensure their integrity. Once in the ground and before being placed into service, the pipeline is pressure-tested.  Water is used to fill a segment of the pipeline pressurizing it to much-higher pressures than the pipeline would ever experience during day-to-day operations.  Hydrostatic testing is valuable because it demonstrates a pipeline’s ability to operate safely at normal operating pressures.  www.oregon.gov/puc/Pages/safety/gassafety.aspx

Pipeline companies are also required to undergo periodic maintenance inspections, such as leak surveys and valve and safety device inspections. The pipeline will be periodically inspected using an internal electronic inspection device to confirm the continuing integrity and safety of the pipeline. In addition, regular inspection by motor vehicles, foot patrols and low-flying aircraft keep a watchful eye on pipeline routes and adjacent areas.  Pipeline systems are monitored 24 hours a day from a Gas Control Center in addition to local offices.

Pipeline Company representatives will meet with local emergency response officials, excavation contractors and local landowners to educate them on pipeline operation and emergency response procedures.  Information is routinely distributed providing 24-hour emergency telephone numbers and locations of the pipeline in the area.  Pipeline companies will also participate in training exercises with federal, state and local emergency response agencies to ensure program readiness.  For more information on pipeline safety, refer to www.safepipelines.org.

ODOE Contacts
Federal and State Siting Process
Shanda Shribbs
Operations Analyst 
Energy Siting Division
Oregon Department of Energy
625 Marion Street NE, Salem OR 97301
503-934-4005
shanda.shribbs@state.or.us
Safety and Security Process
Deanna Henry
Emergency Preparedness Manager
Nuclear Safety & Energy Emergency Preparedness Division
Oregon Department of Energy
625 Marion Street NE, Salem OR  97301
503-932-4428
deanna.henry@state.or.us