[Federal Register Volume 77, Number 109 (Wednesday, June 6, 2012)]
[Notices]
[Pages 33446-33449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13679]
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DEPARTMENT OF ENERGY
[FE Docket No. 12-32-LNG]
Jordan Cove Energy Project, L.P.; Application for Long-Term
Authorization to Export Liquefied Natural Gas Produced From Domestic
and Canadian Natural Gas Resources to Non-Free Trade Agreement
Countries for a 25-Year Period
AGENCY: Office of Fossil Energy, DOE.
ACTION: Notice of application.
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SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy
(DOE) gives notice of receipt of an application (Application), filed on
March 23, 2012, by Jordan Cove Energy Project, L.P. (Jordan Cove),
requesting long-term, multi-contract authorization to export as
liquefied natural gas (LNG) both natural gas produced domestically in
the United States and natural gas produced in Canada and imported into
the United States, in an amount up to the equivalent of 292 billion
cubic feet (Bcf) of natural gas per year, 0.8 Bcf per day (Bcf/d), over
a 25-year period, commencing on the earlier of the date of first export
or seven years from the date the requested authorization is granted.
The LNG would be exported from the proposed LNG terminal to be located
on the North Spit of Coos Bay in Coos County, Oregon, to any country
(1) with which the United States does not have a free trade agreement
(FTA) requiring national treatment for trade in natural gas, (2) which
has developed or in the future develops the capacity to import LNG via
ocean-going carrier, and (3) with which trade is not prohibited by U.S.
law or policy. Jordan Cove is requesting this authorization to export
LNG both on its own behalf and as agent for other parties who hold
title to the LNG at the point of export. The Application was filed
under section 3 of the Natural Gas Act (NGA). Protests, motions to
intervene, notices of intervention, and written comments are invited.
DATES: Protests, motions to intervene or notices of intervention, as
applicable, requests for additional procedures, and written comments
are to be filed using procedures detailed in the Public Comment
Procedures section no later than 4:30 p.m., eastern time, August 6,
2012.
ADDRESSES:
Electronic Filing on the Federal eRulemaking Portal under FE Docket
No. 12-32-LNG: http://www.regulations.gov.
Electronic Filing by email: [email protected].
[[Page 33447]]
Regular Mail: U.S. Department of Energy (FE-34), Office of Natural
Gas Regulatory Activities, Office of Fossil Energy, P.O. Box 44375,
Washington, DC 20026-4375.
Hand Delivery or Private Delivery Services (e.g., FedEx, UPS,
etc.): U.S. Department of Energy (FE-34), Office of Natural Gas
Regulatory Activities, Office of Fossil Energy, Forrestal Building,
Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585.
FOR FURTHER INFORMATION CONTACT:
Larine Moore or Marc Talbert, U.S. Department of Energy (FE-34),
Office of Natural Gas Regulatory Activities, Office of Fossil Energy,
Forrestal Building, Room 3E-042, 1000 Independence Avenue SW.,
Washington, DC 20585, (202) 586-9478; (202) 586-7991.
Edward Myers, U.S. Department of Energy, Office of the Assistant
General Counsel for Electricity and Fossil Energy, Forrestal Building,
Room 6B-256, 1000 Independence Ave. SW., Washington, DC 20585, (202)
586-3397.
SUPPLEMENTARY INFORMATION:
Background
Jordan Cove is a Delaware limited partnership with its principal
place of business in Coos Bay, Oregon. The general partner of Jordan
Cove is Jordan Cove Energy Project L.L.C., a Delaware limited liability
company. Both Jordan Cove and its general partner are owned by the two
limited partners in Jordan Cove. The first, Fort Chicago LNG II
U.S.L.P., a Delaware limited partnership owns seventy-five percent. It
is wholly owned and controlled, through a number of intermediate wholly
owned and controlled companies, by Veresen, Inc., a Canadian
corporation based in Calgary, Alberta, which, prior to its organization
as a corporation, was Fort Chicago Energy Partners L.P., a Canadian
limited partnership (although the name of the parent changed, the name
of the subsidiary owning Jordan Cove did not). The second, Energy
Projects Development L.L.C., a Colorado limited liability company, owns
twenty-five percent. It is owned by various private individuals, all of
whom are U.S. citizens.
Jordan Cove states that its construction and operation of an LNG
terminal in Coos Bay, Oregon has already been authorized by the Federal
Energy Regulatory Commission (FERC) as an import facility.\1\ Jordan
Cove states that it has developed modified plans for the terminal to
operate as an export facility. The terminal facilities authorized by
the FERC Order that will be used for exports include two 160 cubic
meter LNG full-containment storage tanks, a single marine berth, and
on-site utilities and services. The modified plans include large
diameter LNG piping configured for exports and electrically driven
liquefaction equipment. On February 29, 2012, Jordan Cove filed a
request for FERC's Office of Energy Projects to commence the mandatory
National Environmental Policy Act (NEPA) pre-filing review process for
an application to amend its FERC authorization to add export
facilities, which was docketed in FERC Docket No. PF12-7-000 and
approved by letter dated March 6, 2012. Jordan Cove anticipates
completing the pre-filing review process and filing its application to
amend in October, 2012.
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\1\ Pacific Connector Gas Pipeline, LP; Jordan Cove, 129 FERC ]
61,234 (December 17, 2009) (FERC Order). Rehearing requests of the
FERC Order was pending before FERC at the time of the Application
submission to DOE/FE.
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Jordan Cove states that provided that FERC authorizes the export
facilities by the end of 2013, Jordan Cove would be able to complete
construction and commence export service in the fourth quarter of 2017.
Jordan Cove further states that this service would offer benefits
unique to the Jordan Cove terminal, because it is the only currently
proposed liquefaction and export project that will provide customers
the opportunity to export LNG from the U.S. West Coast with natural gas
likely to be sources from Canadian and the U.S. Rocky Mountain supply
basins.
Current Application
In the instant application, Jordan Cove seeks long-term, multi-
contract authorization to export as LNG both natural gas produced
domestically in the United States and natural gas produced in Canada
and imported into the United States, up to the equivalent of 292 Bcf of
natural gas per year, 0.8 Bcf/d, for a period of 25 years beginning on
the earlier of the date of first export or seven years from the date
the authorization is granted by DOE/FE. Jordan Cove requests that such
long-term authorization provide for export from its LNG terminal to be
located on the North Spit of Coos Bay in Coos County, Oregon to any
country with which the United States does not have an FTA requiring
national treatment for trade in natural gas, which has developed or in
the future develops the capacity to import LNG via ocean-going carrier,
and with which trade is not prohibited by U.S. law or policy.
Jordan Cove states that rather than enter into long-term natural
gas supply or LNG export contracts, it contemplates that its business
model will be based primarily on Liquefaction Tolling Agreements (LTA),
under which individual customers who hold title to natural gas will
have the right to deliver that gas to the Jordan Cove terminal for
liquefaction services and to receive LNG in exchange for a processing
fee paid to Jordan Cove.\2\
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\2\ Jordan Cove states that under the LTA business model, the
decision whether to utilize liquefaction capacity will be made by
the LTA customer: If the marginal cost of producing or purchasing
natural gas, liquefying it, and transporting the resulting LNG to a
destination market is higher than other competing source of supply
in any month, the LTA customer may forego its nomination rights for
that month.
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Jordan Cove requests long-term, multi-contract authorization to
engage in exports of LNG on behalf of or as agent for others, as well
as on its own behalf. Jordan Cove states that the title holder at the
point of export, if not Jordan Cove, may be an LTA customer or a party
that purchases LNG from an LTA customer pursuant to a long-term
contract. Jordan Cove will file, or cause others to file, under seal,
executed contracts associated with the long-term supply of natural gas
to, or the long-term export of LNG from, the Jordan Cove terminal,
including LTAs, within 30 days of their execution.\3\ Jordan Cove
states that Jordan Cove's terminal, via the Pacific Connector Gas
Pipeline (PCGP),\4\ will be connected to the Northwest United States
market hub at Malin, Oregon, providing access to abundant and diverse
gas supplies in both the United States and Canada. At the Malin hub,
PCGP will interconnect with Gas Transmission Northwest Pipeline,
delivering gas from western Canada, and via its Stanfield
interconnection with Northwest Pipeline, delivering gas from the U.S.
Rockies; Ruby Pipeline, delivering gas from western Wyoming,
northwestern Colorado and northern Utah; and, PG&E Redwood Path,
serving northern California.
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\3\ Jordan Cove states that when any such agreement is executed,
and the transaction specific information required under 10 CFR
590.202(b) becomes available, Jordan Cove will comply with that
provision.
\4\ Jordan Cove states that PCGP is a new interstate natural gas
pipeline also certificated by the FERC Order (PCGP, together with
the Jordan Cove terminal, the Jordan Cove Project).
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Public Interest Considerations
In support of its Application, Jordan Cove states that in DOE/FE
Order No. 2961 (Sabine Pass Liquefaction, LLC) \5\ authorizing LNG
exports to non-FTA nations, DOE/FE acknowledged its longstanding
position that ``Section 3(a) creates a rebuttable presumption that a
proposed export of natural gas is in the
[[Page 33448]]
public interest, and DOE must grant such an application unless those
who oppose the application overcome that presumption ``by making an
affirmative showing of inconsistency with the public interest.'' \6\
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\5\ Sabine Pass Liquefaction, LLC, DOE/FE Order No. 2961, FE
Docket No. 10-111-LNG (May 20, 2011).
\6\ Id. at 28 and n. 38, citing Phillips Alaska Natural Gas
Corporation and Marathon Oil Company, 2 FE ] 70,317 (1999) (Phillips
Order).
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Jordan Cove states that the LNG export authorization will serve the
public interest in multiple ways. It will permit exports when
competitive and otherwise promote healthy domestic and international
natural gas markets. Jordan Cove states that the exports will not pose
any threat to the security of domestic natural gas supplies, but to the
contrary, they will result in significant economic benefits. Jordan
Cove states that the demand created by the exports will stimulate
increased revenues and jobs in upstream industries, which in turn will
benefit the overall U.S. economy. Jordan Cove states that the
construction and operation of the Jordan Cove Project will also create
jobs and produce revenues to the benefit of the local and regional
economies. Jordan Cove states that exports will have positive
international trade impacts for the United States. In sum, Jordan Cove
states that the Jordan Cove Project's economic benefits advance the
Administration's efforts to expand exports, create jobs, and otherwise
stimulate the beleaguered U.S. economy.
Jordan Cove commissioned independent experts to conduct studies and
prepare the following reports that Jordan Cove claims demonstrate these
public interest impacts:
1. Jordan Cove LNG Export Project Market Analysis Study, January
2012 by Navigant Consulting, Inc. (Navigant) analyzing gas supply and
demand outlooks and modeling potential price effects of the proposed
exports for the North American natural gas market to 2045 (Navigant
Study).
2. Whitepaper: Analysis of the EIA Export Report `Effect of
Increased Natural Gas Exports on Domestic Energy Markets' Dated January
19, 2012, February 2012 by Navigant commenting on the EIA Report \7\
(Navigant Whitepaper).
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\7\ In January 2012, the U.S. Energy Information Administration
(EIA) released Effect of Increased Natural Gas Exports on Domestic
Energy Markets (EIA Report), a case study, prepared at the request
of DOE/FE, evaluating the impact of increased natural gas demand
reflecting exports of LNG on domestic energy consumption, production
and demand under four scenarios. The EIA Report is addressed infra
at 16-18.
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3. An Economic Impact Analysis of the Construction of an LNG
Terminal and Natural Gas Pipeline in Oregon, March 6, 2012 by
ECONorthwest examining impacts on the states of Oregon and Washington
of the construction of the Jordan Cove Project (Construction Study).
4. An Economic Impact Analysis of Jordan Cove LNG Terminal and
Pacific Connector Gas Pipeline Operations, March 23, 2012 by
ECONorthwest examining impacts on the local communities of the
operations of the Jordan Cove Project (Operations Study).
5. Upstream Economic Contributions of the Jordan Cove Energy
Project, February 29, 2012 by ECONorthwest quantifying direct and
indirect contributions of the Jordan Cove Project to the United States
economy (Upstream Contributions Study).
6. Effect of the Jordan Cove Energy Project's LNG Exports on United
States Balance of Trade, March 20, 2012 by ECONorthwest analyzing the
impact of the Jordan Cove Project on the nation's balance of trade
(Balance of Trade Study).
Copies of the complete reports are appended to Jordan Cove's
application. Jordan Cove provides further discussion on their views
that the proposed export authorization is in the public interest,
discussed briefly below.
(1) Jordan Cove Exports Will Benefit Natural Gas Markets--Jordan
Cove claims: (a) That natural gas supply is more than adequate to serve
the projected domestic demand and proposed LNG exports; (b) that the
effect of Jordan Cove exports on natural gas prices is minimal; and (c)
that LNG exports will strengthen the U.S. natural gas market.
(2) Jordan Cove Exports Will Cause Economic Benefits--Jordan Cove
claims: (a) That construction of the Jordan Cove Project will benefit
the regional economy; (b) that operation of the Jordan Cove Project
will benefit the local economy; (c) that exports from Jordan Cove will
foster upstream industry growth and stimulate the U.S. economy; (d)
that Jordan Cove exports will provide trade benefits; and (e) that
Jordan Cove exports will provide additional international benefits.
(3) Jordan Cove claims that exports will offer unique advantages
due to its location.
A more complete discussion of the above public benefits claimed by
Jordan Cove is highlighted in Jordan Cove's application. Based on the
reasoning provided in the Application, Jordan Cove requests that the
DOE/FE determine that Jordan Cove's request for long-term, multi-
contract authorization to export LNG to non-FTA countries would be
consistent with the goal of the DOE Policy Guidelines to ``minimize
regulatory impediments to a freely operating market.'' \8\
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\8\ DOE Policy Guidelines at 6685.
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Environmental Impact
Jordan Cove states that FERC has found that the proposed Jordan
Cove LNG import terminal is environmentally acceptable if constructed
and operated in accordance with the environmental mitigation measures
set forth in the FERC Order. Jordan Cove also states that the potential
environmental impacts of the terminal as modified to permit exports of
LNG will be reviewed by FERC under NEPA when Jordan Cove's application
to amend its certificate to authorize liquefaction and export is filed.
Jordan Cove requests that DOE/FE issue an order authorizing exports of
LNG conditioned upon satisfactory completion of the environmental
review process by FERC.
DOE/FE Evaluation
The Application will be reviewed pursuant to section 3 of the NGA,
as amended, and the authority contained in DOE Delegation Order No. 00-
002.00L (April 29, 2011) and DOE Redelegation Order No. 00-002.04E
(April 29, 2011). In reviewing this LNG export Application, DOE will
consider any issues required by law or policy. To the extent determined
to be relevant or appropriate, these issues will include the impact of
LNG exports associated with this Application, and the cumulative impact
of any other application(s) previously approved, on domestic need for
the gas proposed for export, adequacy of domestic natural gas supply,
U.S. energy security, and any other issues, including the impact on the
U.S. economy (GDP), consumers, and industry, job creation, U.S. balance
of trade, international considerations, and whether the arrangement is
consistent with DOE's policy of promoting competition in the
marketplace by allowing commercial parties to freely negotiate their
own trade arrangements. Parties that may oppose this Application should
comment in their responses on these issues, as well as any other issues
deemed relevant to the Application.
NEPA requires DOE to give appropriate consideration to the
environmental effects of its proposed decisions. No final decision will
be issued in this proceeding until DOE has met its NEPA
responsibilities.
Due to the complexity of the issues raised by the Applicants,
interested persons will be provided 60 days from the date of
publication of this Notice in which to submit comments, protests,
[[Page 33449]]
motions to intervene, notices of intervention, or motions for
additional procedures.
Public Comment Procedures
In response to this notice, any person may file a protest,
comments, or a motion to intervene or notice of intervention, as
applicable. Any person wishing to become a party to the proceeding must
file a motion to intervene or notice of intervention, as applicable.
The filing of comments or a protest with respect to the Application
will not serve to make the commenter or protestant a party to the
proceeding, although protests and comments received from persons who
are not parties will be considered in determining the appropriate
action to be taken on the Application. All protests, comments, motions
to intervene or notices of intervention must meet the requirements
specified by the regulations in 10 CFR part 590.
Filings may be submitted using one of the following methods: (1)
Submitting comments in electronic form on the Federal eRulemaking
Portal at http://www.regulations.gov, by following the on-line
instructions and submitting such comments under FE Docket No. 12-32-
LNG. DOE/FE suggests that electronic filers carefully review
information provided in their submissions and include only information
that is intended to be publicly disclosed; (2) emailing the filing to
[email protected] with FE Docket No. 12-32-LNG in the title line; (3)
mailing an original and three paper copies of the filing to the Office
Natural Gas Regulatory Activities at the address listed in ADDRESSES;
or (4) hand delivering an original and three paper copies of the filing
to the Office of Natural Gas Regulatory Activities at the address
listed in ADDRESSES.
A decisional record on the Application will be developed through
responses to this notice by parties, including the parties' written
comments and replies thereto. Additional procedures will be used as
necessary to achieve a complete understanding of the facts and issues.
A party seeking intervention may request that additional procedures be
provided, such as additional written comments, an oral presentation, a
conference, or trial-type hearing. Any request to file additional
written comments should explain why they are necessary. Any request for
an oral presentation should identify the substantial question of fact,
law, or policy at issue, show that it is material and relevant to a
decision in the proceeding, and demonstrate why an oral presentation is
needed. Any request for a conference should demonstrate why the
conference would materially advance the proceeding. Any request for a
trial-type hearing must show that there are factual issues genuinely in
dispute that are relevant and material to a decision and that a trial-
type hearing is necessary for a full and true disclosure of the facts.
If an additional procedure is scheduled, notice will be provided to
all parties. If no party requests additional procedures, a final
Opinion and Order may be issued based on the official record, including
the Application and responses filed by parties pursuant to this notice,
in accordance with 10 CFR 590.316.
The Application filed by Jordan Cove is available for inspection
and copying in the Office of Natural Gas Regulatory Activities docket
room, Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585.
The docket room is open between the hours of 8:00 a.m. and 4:30 p.m.,
Monday through Friday, except Federal holidays. The Application and any
filed protests, motions to intervene or notice of interventions, and
comments will also be available electronically by going to the
following DOE/FE Web address: http://www.fe.doe.gov/programs/gasregulation/index.html. In addition, any electronic comments filed
will also be available at: http://www.regulations.gov.
Issued in Washington, DC, on May 29, 2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2012-13679 Filed 6-5-12; 8:45 am]
BILLING CODE 6450-01-P