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Backers of a rejected liquefied natural gas export terminal in Coos Bay say they intend to file a new application with federal regulators

((Courtesy of Jordan Cove))

It's not dead yet.

Backers of a rejected liquefied natural gas export terminal in Coos Bay say they intend to file a new application with federal regulators, opening a new chapter in the now 12-year-old effort to build the controversial facility on Oregon's south coast.

Calgary-based Veresen Inc. says it has redesigned the proposed $7.6 billion project so it will no longer require a separate power plant, reducing its environmental and community impacts. And with an energy-friendly administration on its way into the White House, the company thinks the regulatory outcome will be different.

Thursday's move comes days after the Federal Energy Regulatory Commission reaffirmed its rejection of the Jordan Cove Energy Project in March. The panel said at the time that the project's backers had not demonstrated there was enough market demand to offset the negative impacts the facility's 232-mile feeder pipeline would have on landowners. The commission rejected Veresen's rehearing request last week, but did so "without prejudice," leaving the door open for the company to submit a new application.

Along with its rehearing request, Veresen submitted initial agreements with Japanese utilities and energy trading firms to demonstrate that there was commercial demand. But FERC declined to reopen the record, and never indicated whether the agreements confirmed a public need for the facility.

The new application will go before a commission that will be entirely remade by the incoming Trump administration, which is bent on opening the door to more domestic energy production and exports. Two of the five seats on the panel are open, and the incoming president will have the opportunity to name a new chair.

"By all indications, the new administration is going to be more supportive and have FERC's back in a way that the current administration did not," said Betsy Spomer, an executive vice president at Veresen who is heading the Jordan Cove project. "By the time we get through the refiling process, we would be looking at an entirely new commission."

Veresen has been prohibited from communicating with FERC during the decision process, but Spomer says she can now sit down with staff in January and get feedback before filing the new application.

FERC is not the only hurdle in getting the project approved. It still needs numerous federal and state permits and will have to meet scores of conditions attached to its environmental impact statement.

Opponents of the project were disappointed with Veresen's decision to refile, but skeptical the outcome would be any different.

"They still don't have a market. They still don't have agreements with landowners. They've got major issues out there," said Jody McCaffree, a North Bend resident who has led local opposition to the plant for years. "It's just frustrating to have to keep fighting this project that is never going to see the light of day."

The project's final environmental impact statement from 2015 remains valid, but Spomer said the impacts would be reduced by the absence of the power plant and the ability to house its construction workforce on that site, closer to the project and away from Highway 101. Jordan Cove withdrew its application this week to build the power plant from Oregon's Energy Facility Siting Council.

Spomer said the natural gas-fired turbines required to produce the electricity would now be housed within the liquefaction plant, eliminating a major and controversial development on the north spit of Coos Bay, which is a popular recreation area as well as the site of existing industrial businesses.

Veresen claims it has right of way agreements with about 40 percent of the private landowners along the route of the Pacific Connector pipeline, which would run halfway across the state to a gas hub in the Klamath County town of Malin. Spomer said the company had suspended its right-of-way acquisition, but is reinitiating that effort.

Industry analysts have also been skeptical whether there is a market for the project given the worldwide glut of LNG capacity and the number of new projects coming on line. Spomer said it would take nearly six years to complete the project if it wins approval.

"The market is a bit frothy right now but that's not at all predictive of what it's going to look like in the next decade," she said. "The sweet spot for buyers is in the 2023 or 2024 timeframe."

-Ted Sickinger

503-221-8505; @tedsickinger