FERC probes future of Jordan Cove LNG as it mulls suspending pipeline permit

The US Federal Energy Regulatory Commission has told the developers of the stalled Jordan Cove LNG project in Oregon and affiliated Pacific Connector feedgas pipeline they "should clarify whether they plan to move forward with the projects" as the commission considers whether to suspend a permit for the pipeline to prevent property condemnations.

FERC unanimously decided to approve the issuance of a briefing order in the matter during the commission's Nov. 18 monthly open meeting.

Canada's Pembina Pipeline Corp. told the US Court of Appeals for the District of Columbia Circuit in April that it would "pause" the development of Jordan Cove to assess the impact of state regulatory decisions that could threaten the project's future. The project continues to face other major hurdles, including stiff environmental opposition and challenges in securing commercial agreements needed to advance to construction.

The FERC action on the briefing order followed a DC Circuit decision to give the regulator a new opportunity to stay its authorization of the project after landowners argued that they are stuck in limbo while the project remains paused (CP17-495 and CP17-494). Even though Pembina has yet to commercially sanction the pipeline, the FERC authorizations for the projects mean the developers could start pursuing eminent domain proceedings at the federal district court level to secure land for construction, landowners contended.

Democratic FERC Chairman Richard Glick expressed sympathy for the landowners' argument in a briefing with reporters after the commission meeting. "It doesn't make a lot of sense," he said. "If you are not moving forward with the project, why should you be able to acquire land and acquire interest in land?"

A Pembina spokesperson did not immediately respond to a request for comment. Pembina has committed not to file any land condemnation actions during the development pause, but landowners argued that these assurances fail to relieve the uncertainty over the future of their properties.

Natural Gas Act certificate

Analysts at ClearView Energy Partners on Nov. 4 described the case as "more procedural than philosophical or political, but no less precedential," in part because it raises the question of whether the commission should stay permits if a project sponsor publicly pauses work on a project without canceling it.

"The value of [Natural Gas Act] certificates could decline slightly if stayed when a natural gas infrastructure project fails to acquire (or maintain) other necessary permits, but we do not think it evaporates entirely," the analysts wrote.

The DC Circuit in a Nov. 1 order remanded the record in the case to FERC for the purpose of considering a stay, which the appeals court could also issue (Deborah Evans v. FERC, 20-1161). The court said it was granting the commission concurrent jurisdiction with the court for action within 90 days. Glick said the commission would make a decision "relatively soon" about what it says to the court. FERC set a Dec. 1 deadline for initial responses to its briefing order and a Dec. 15 deadline for replies.

Landowners, who said they have suffered more than 15 years of uncertainty, wanted the appeals court to vacate the certificate order for the project. FERC approved the Jordan Cove project in March 2020, when the makeup of the commission was different. At the time, Glick, then a commissioner, dissented from a two-member Republican majority vote for the Jordan Cove project, arguing that the commission failed to properly consider environmental impacts, including how it would contribute to climate change.

New commission

An ongoing review of the 1999 FERC natural gas pipeline certificate policy is expected to address how the commission draws conclusions about the climate change impacts of gas projects, how it considers environmental justice and how it assesses the need for gas transportation projects (PL18-1). The US Senate's Nov. 16 confirmation of District of Columbia Public Service Commission Chairman Willie Phillips to serve as FERC's fifth commissioner handed Democrats a 3-2 majority at the agency and bolstered the chances of FERC adopting a revised pipeline policy in the near term.

"This case is yet another example in my opinion where the commission made numerous mistakes in the underlying proceedings granting the certificate and approving the LNG facility," Glick said about the Jordan Cove proceeding during the meeting. "I say we need to do a better job, and we will."