Natural Gas Rate Cut May Doom LNG
July 10, 2009
Author: CFM Staff
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Natural gas bills this winter could be 10 to 20 percent lower, which is good news to consumers, but potentially bad news to backers of a liquefied natural gas terminal and pipeline in Northwest Oregon.
Three utilities providing natural gas in Oregon have filed for rate decreases with the Public Utility Commission. Those rates cuts, which come on the heels of double-digit increases in the recent past, are expected to go into effect November 1.
Utility spokesmen say the price of natural gas has dropped sharply as a result of the recession. Lower prices will help many Oregon families facing tough economic times because of the recession. There are 1 million natural gas customers in Oregon.
However, the drop in price may foil plans to site an LNG terminal somewhere near the mouth of the Columbia River. LNG already has detractors based on its perceived environmental and safety problems. Now critics can say the extra supply of natural gas isn't needed, as evidenced by declining prices and demand.
Supporters say importing natural gas in liquefied form would diversify Oregon's supply, which now comes primarily from Canada and the Rocky Mountain Basin. They also contend LNG is safe, noting that two LNG storage facilities have been in place in Portland and on the Central Oregon Coast for years.
The 2009 legislative session essentially punted on issues related to LNG. It failed to act on legislation advanced by critics to toughen siting requirements and a bill offered by supporters that could expedite permitting. The politics surrounding those bills contributed to the failure of separate legislation that would have made all energy project applicants responsible for state agency costs to review applications.
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