The fight over whether LNG is needed in Oregon took an odd twist recently. Oregon Public Utility Chairman Lee Beyer sent Gov. Ted Kulongoski a memo saying that importing LNG to the Northwest may be needed to settle natural gas prices and ensure a secure future supply. In his memo, Beyer said that gas supplies will more than likely decline, demand will more than likely go up and prices will more than likely spike. And that means higher utility bills for Oregon's citizens and increased costs for its industries. Beyer said that building an LNG terminal in Oregon would help in meeting both current and future demands. He added that imported LNG will likely cost the same as U.S.-produced gas, "there might be some small savings because of lower LNG transportation costs." In his memo, Beyer said, "Other regions of the country are all looking to secure access to additional gas supply sources, such as LNG and unconventional gas, to replace supplies from quickly diminishing domestic and pipeline import sources. The Northwest should do the same." While his comments may be heartening to the developers of LNG terminals in Oregon, Beyer's memo probably wasn't the best news the governor could have gotten. Kulongoski has been a very vocal critic of the Federal Energy Regulatory Commission, which has sole siting authority for land-based LNG terminals. Terminals offshore are under the jurisdiction of the U.S. Maritime Administration and Coast Guard and the governors of those states have a veto authority. The governor and other West Coast officials have repeatedly said they feel FERC has too much authority and doesn't listen to the wishes of the various states and their citizens in a states' rights vs federal authority fight that is kept simmering. Into the fight comes U.S. Reps. David Wu, Peter DeFazio and Darlene Hooley, all Democrats, who have asked the FERC to delay any approval of the NorthernStar Natural Gas proposed Bradwood LNG terminal in Bradwood, Oregon. Houston-based NorthernStar would take the LNG and pump it through Clatsop, Columbia and Cowliz counties. Beyer's memo also has him at odds with an Oregon Department of Energy report that questions the need for any LNG terminals. The energy department report has suggested that pipelines from new gas fields coming online in the Rockies would be able to supply the state with cheaper gas. Beyer's memo, was in fact, in response to the energy department memo. Stay tuned. There's more to come in this little dispute. Look for things to get heated in Oregon as a governor who feels the feds have taken away some of the state's authority and dueling memos inside his own administration continue to make the news. –John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, firstname.lastname@example.org
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