What's New on related web pages:
* State of Oregon Opposition to the Bradwood Landing LNG Terminal and Support of the Coos Bay LNG Terminal (27 January 2008)
* Proposed Coos Bay Shipping Container Facility (APM Terminals) and Jordan Cove LNG Terminal (August 2007)
* Oregon Senate Bills 432 and 643 Signed into Law in 2007: Shipbreaking Only in Dry Dock for Large Ships in Oregon (August 2007)
Liquefied Natural Gas (LNG)
.....Timetable for the State Port Commission's Land Deal for the Jordan Cove LNG Facility
.....Expenditures for LNG Terminal and Projects Apparently Dependent upon the LNG Terminal Amount to $1-2 Billion. (Summary in Table 1)
.....The Target Market for Jordan Cove's Natural Gas Is California
.....Will the Expanded Jordan Cove LNG Terminal and Pacific Connector Gas Pipeline Compete with the Coos County Gas Pipeline?
.....Is Bob Braddock's Promise that the Coos County Will Have the Cheapest Natural Gas on the West Coast Plausible?
.....Are the State Port of Coos Bay's Explanations that If the Port Had Not Provided Land for the LNG Terminal That It Would Have Been Built Anyway Questionable? (Summary in Table 2)
.....Lobbyist and Former State Senator Ken Messerle and LNG
.....Oregon Economic and Community Development Department's (OECDD) Involvement with Port Projects
.....Have Taxpayers Helped Pay for the Jordan Cove LNG Project?
.....Citizen Opposition to the Jordan Cove LNG Terminal and the Associated Pacific Connector Gas Pipeline
.....News Media Coverage of Port Commission, LNG, and Pipeline Issues
.....How Realistic Is the South Coast Development Council Inc.'s (SCDC) Economic Impact Report for the Proposed Coos Bay LNG Terminal? (separate web page)
Other, Non-Shipbreaking Issues
Other Recent Port Commission Actions that Show that Important Decisions Are Made in Executive Sessions and/or Do Not Include Meaningful Public Input
.....Project TK (Tokuyama)
.....Coos Bay As a Gateway Port with Container Shipping (Project April)
.....Pay Raise for Port Executive
.....Other Businesses
Shipbreaking
Will There Be Meaningful Citizen Involvement in the Port Commission's Decision about Shipbreaking?
Environmental Recycling Systems (ERS) and Public Relations for Proposed Ship Recycling at Coos Bay
Bibliographies
Keyword Index to Ship Recycling and Other Relevant Port of Coos Bay Issues
.....A. Oregon International Port of Coos Bay's Web Site Items Related to Ship Scrapping, LNG, Project TK, and Gateway Port
.....B. Newspaper Articles Starting in February 2006 Related to Coos Bay Shipbreaking
.....C. Sampling of Other Articles, Editorials, or Letters about the Port of Coos Bay Activities Not Directly Related to Ship Salvaging"
.....D. Some Corporate, Community, and Government Web References Relevant to Jordan Cove LNG Terminal and Pacific Connector Gas Pipeline
Initially, I had planned this page to be only about shipbreaking that had been proposed for Coos Bay. Shipbreaking is also known as ship scrapping, ship recycling, ship salvaging, or ship dismantling. The Port of Coos Bay is seemingly only referring to this euphemistically as ship recycling. As I have researched this issue, I have realized that ship scrapping is only one of several major Port of Coos Bay issues and that the Port is likely to decide the ship recycling issue like it has other issues. Accordingly, this page is still about ship salvaging, but other Port of Coos Bay issues are also included.
During December 2005-January 2006, Coos Bay's newspaper, The World, had five news stories and one editorial about Bay Bridge Enterprises LLC and their proposal to construct an in-water ship recycling facility at Newport. The World did this in part because Bay Bridge had also considered Coos Bay, and a rumor had surfaced that Bay Bridge was still interested in Coos Bay.
On 10 February 2006, The Oregonian reported that Governor Kulongoski announced that ship recycling in Oregon would not get state support unless it was done in drydocks. Bay Bridge's method of in-water ship recycling would not be adequate.
On Feb. 16, the Port of Coos Bay announced that shipbreaking companies were interested in Coos Bay (Port-A2b and Port-A3). One ship salvaging company, Environmental Recycling Systems, has been named in The World (B2). However, no companies have been identified by the Port, which is in keeping with the Port's policy of keeping the names of companies with which they are negotiating confidential (e.g., Project TK). After the Port's announcement, The World has done extensive coverage of shipbreaking issues with 25 news articles during February-June. Most of these articles were by The World's Elise Hamner.
This web page has a Keyword Index based on several bibliographies:
1) Port of Coos Bay's news releases and Minutes of Commission meetings (Bibliography A)
2) newspaper items about shipbreaking (Bibliography B)
3) an incomplete sample of newspaper items about other Port of Coos Bay issues (Bibliography C).
4) corporate, community, and government web references to Jordan Cove LNG terminal and Pacific Connector Gas Pipeline (Bibliography D)
An examination of references in these bibliographies suggests that the Coos Bay Port Commission is neither likely to seek nor include meaningful public involvement in the Commission's decision about shipbreaking or other developments. These bibliographies are also useful in learning more about ship salvaging and in determining how the Commission handles issues.
Surprisingly, I found only a single sentence about the Coos Bay shipbreaking issue since the Port's interest in ship scrapping was announced in February 2006 in any other publication other than The World through July 15 (B37). However, this issue as well as the proposed Jordan Cove Liquefied Natural Gas (LNG) facility and associated 231-mile pipeline to the California border (see Figure 1) and proposals to make Coos Bay a gateway to the interior would greatly affect southwestern Oregon by the Port of Coos Bay. Further, taxpayers of Oregon may contribute to the construction of the shipbreaking facility (B25), and the Oregon Economic and Community Development Department (OECDD) provided $15 of the $25 million loans for the Weyerhaeuser and Jordan Cove Energy Project LNG terminal land deal.
So Oregon International Port of Coos Bay activities are an Oregon issue, particularly since the Port of Coos Bay is a State Port, and its Commissioners are appointed by the Governor, confirmed by the Oregon Senate, and may not be re-appointed or can be asked to resign by the Governor.
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
According to the Port of Coos Bay Commission page, the current Commissioners are David Kronsteiner (President), Caddy McKeown (Vice-President), Dan Smith (Secretary), Brady Scott (Treasurer), and Jerry Hampel. The Commission page has links to biographical information about each and also states:
"Oregon International Port of Coos Bay is designated a State Port, consequently members of the Board of Commissioners are appointed by the Governor and confirmed by the Oregon Senate for 4-year terms."
Thus, Port of Coos Bay Commissioners are not elected like those for other Oregon coastal ports (see Oregon Revised Statute [ORS] 777.135 and 777.925 in Chapter 777, C1a). The Port of Coos Bay Commissioners are neither responsible to local voters nor to local elected officials.
In December 2003, Governor Ted Kulongoski decided to replace all five Commissioners for the Port of Coos Bay. He did so by saying he would not re-appoint two Commissioners, calling at least two other Commissioners and asking them to resign, and the remaining Commissioner resigned for "personal reasons" on the same day that the Governor called the other Commissioners to ask them to resign (C1a, C1b, C1c). The Governor announced four of his Commission appointments on the day after asking the Commissioners to resign (C1a). According to articles in The World, the Governor's actions were controversial (C1a, C1b, C1c) and (C5):
"Most of the commissioners he appointed had no direct ties to the port and very little knowledge of its interworkings."The Governor administered the oath of office to the new Commissioners in January 2004 (C1c). The World editorialized (C1b):
"Because Coos Bay's is a state port, its board is appointed by the governor. Traditionally, the governor's office and the port publicly announce openings on the board and ask those interested in serving to apply for an appointment. Not this time. Those who will be charged with managing this multi-million-dollar agency were picked with no public notification. Instead, the governor's office schmoozed with some local movers and shakers, got some suggestions and made the appointments."
The World also editorialized about the oath ceremony for the new Commissioners (C1c):
"Before he administered the oath, the governor encouraged the new board members to forge partnerships with the cities and the county, with private business and economic development agencies. And perhaps mindful of the dissention that divided the former port board, Gov. Kulongoski reminded the new commissioners that 'bickering is not persuasive in Salem or in Washington, D.C.' "
As stated in the Minutes for the Commission's July 2005 meeting, Governor Kulongoski's charge to the Port of Coos Bay Commissioners included (Port-A1a) (boldface added):
"The major goal of this commission must be to develop a long-term plan for the Port as part of the economic revival of the South Coast region. The Port is a tremendous asset for the local economy, and it must be part of any economic plan. While there are many organizations dealing with economic development, only the Port of Coos Bay can determine the future role of the Port. That is your main task.
...
"And finally, I ask that you work closely with local and regional partners to be sure that your plans are part of a community consensus about economic revival here. The Cities of Coos Bay and North Bend must be part of any discussion on land use, and the counties have a direct interest as well. Private sector businesses, labor and economic development agencies must come to the table. I am asking that you develop a community consensus on how to proceed. As you know, you will probably need state and federal resources to realize your goals, and one thing we look for is that the whole community is behind a plan. Eternal bickering is not persuasive in Salem or Washington, D.C.!"
The Port of Coos Bay states that the Port's Vision (Port-A1a, Port-A11: p. 4) is to:
"Promote optimal use of Coos Bay's deep-water port for the enhancement of the economy and quality of life in the region."
The Port's Vision is thus not just for economic development. Developing a community consensus before making decisions is important in determining what is important economically as well as for maintaining the "quality of life" of residents.
Within seven months of being appointed and without a permanent Port General Manager, the Port Commissioners covertly worked to attract the Jordan Cove LNG terminal, and they publicly supported it in August 2004 (C1da, C1db).
On 5 January 2005, Jeffrey Bishop started work for the Port of Coos Bay as General Manager, and Bishop's proposal to change his title to Executive Director was approved by the Commission by March 2005 (Port's "Executive Director" web page, C1la, C1lb). At the time of the appointment, the Port Commissioners had only one year of experience as Port Commissioners. Jeffrey Bishop's biography on the Port of Coos Bay's "Executive Director" web page states:
"Prior to joining the Port of Coos Bay, Bishop served as Industrial Development Manager for the Port of Tacoma, Washington, for three years, where he was responsible for the marketing of industrial property, management of business relations for the port's bulk commodity customers, and management of Foreign-Trade Zone No. 86, the sixth largest general-purpose zone in the U.S. by import value. He also spent five years with the Port of Pasco, Washington, serving as Director of Properties & Development. ... Bishop also has extensive experience in public administration, serving as City Manager of Sulphur, Oklahoma, and City Administrator in the cities of Jerome, Idaho, Connell, Washington, and Lansing, Kansas."
Bishop's terms of five and three years at two Ports seem short for developing long-term programs or projects as large as the $500 million LNG facility and the $600 million Project TK (Table 1), but he "inherited" the LNG terminal dealings since the Port Commission had already come out in support of it five months before (C1da, C1db). Bishop did not mention any personal experience with working in Oregon before coming to the Port of Coos Bay. However, within two months of starting at the Port of Coos Bay, Bishop was working to purchase Weyerhaeuser's 1,300 acres on the North Spit (Port-A1c, C4f) and with the Japanese company Tokuyama (Project TK; C22b).
The actions of the new Port Commissioners have been controversial. The Port Commissioners do not appear to have followed Governor Kulongoski's directive to build a community consensus before deciding development plans (e.g., the Jordan Cove LNG facility). Further, some Port Commission decisions seem at odds with the intention of Oregon open meeting policies. The Port Commission's handling of the LNG issue has upset many citizens, with a death threat to a Port official about the LNG issue (C40), and a Coos Bay citizen urging residents who opposed the LNG facility to write the Governor to replace the Commissioners (C39).
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
Please note that the Port Commission's land deal with Jordan Cove Energy Project is a completely separate process from the Federal Energy Regulatory Commission's (FERC) review of Jordan Cove's LNG terminal plan. For the FERC process, see Federal Energy Regulatory Commission and U.S. Coast Guard (2006), Jordan Cove's FERC Filings (http://www.jordancoveenergy.com/filings.htm), Citizens Against LNG, Friends of Living Oregon Waters (FLOW), Umpqua Watersheds, and Jordan Cove Retort. Citizens can still become involved in the FERC process (see FERC: For Citizens).
The Governor appointed the Port of Coos Bay Commissioners, so the Governor is the only elected official with any authority over them. If citizens have concerns about actions taken by the Commissioners, citizens could contact the Governor as Richard Guenther suggested in his 7 Sept. 2006 "Letter to the Editor" (C39).
During a 31 July 2006 forum, Kulongoski "said he would support locating a liquefied natural gas terminal in Oregon, preferably in the Coos Bay area" (Williams 2006, C32d). How can the State of Oregon fairly and impartially be part of the certification process or regulate LNG terminals proposed for Oregon on the Columbia River (e.g., Bradwood Landing), after the Governor has supported the Jordan Cove LNG terminal and the State of Oregon provided the loan that enabled the land deal for the Jordan Cove LNG terminal to be viable (see Project Phoenix and Port's Explanations)?
EMAIL: fill out form at http://governor.oregon.gov/Gov/contact_us.shtml
PHONE: Governor's Citizens' Representative Message Line at 503.378.4582
FAX: 503.378.6827
MAIL: Governor Ted Kulongoski
160 State Capitol
900 Court Street
Salem, Oregon 97301-4047
4 February 2007 Letter to Governor Kulongoski: Port Commission of Coos Bay Not Following Governor's Directives (separate web page)
9 February 2007 Letter to Governor Kulongoski: State of Oregon's Enabling of Jordan Cove LNG Terminal (separate web page)
Citizens need to get involved, if they have concerns.
The coverage of the Jordan Cove LNG and associated pipeline issues by Oregon news media has often seemed one-sided in favor of the LNG terminal or has lacked investigative reporting of claims made by pro-LNG interests. For example, several news media favorably reported the pro-LNG South Coast Development Council Inc.'s (SCDC) economic report for the proposed Coos Bay LNG terminal. However, it does not take much scrutiny to determine that the report does not appear realistic. Also, Jordan Cove LNG's Bob Braddock claimed that Coos County would have the cheapest natural gas in the West if their LNG facility was built, and The World reported this as news, without investigating if this was a realistic claim. The news media have also reported pro-LNG press releases as news. In effect, the news media have provided apparently free infomercials "selling" readers the purported benefits of the Jordan Cove LNG terminal.
One major reason for the one-sided coverage is that companies promoting the LNG terminal and pipeline have public relations staff and financial resources to get their message across (see Citizen Opposition to the Jordan Cove LNG Terminal and the Associated Pacific Connector Gas Pipeline). Further, citizen or citizen groups have apparently seldom used press releases, a tool that pro-LNG forces have used very effectively. Citizens or groups with concerns about the Port Commission or in opposition to the LNG terminal and pipeline do not have the resources or appear to have the public relations savvy of pro-LNG interests. Pro-LNG interests also appear to have been very effective in lobbying Port Commissioners and State of Oregon officials for their cause.
Concerned citizens may improve their communication with the news media and governmental officials by using the following resources:
Many citizens fault government when it appears incompetent, inefficient, or wasteful. They then often suggest that government should be run more like business. But is the Oregon International Port of Coos Bay being operated like a successful, long-term business?
Governor Ted Kulongoski is the State of Oregon's equivalent to a company's Chief Executive Officer (CEO). In business, the CEO's directives are to be followed. The Governor appointed all Oregon International Port of Coos Bay Commissioners in 2004 and directed them to "be sure that your plans are part of a community consensus about economic revival here" (Port-A1a). But the Commissioners have failed to develop community consensus before concluding the Port's deal for the Jordan Cove LNG terminal. In addition, the Commissioners appear to be making no effort to develop community consensus before deciding Project TK and some other issues.
The Governor's directives to the Commissioners also included (Port-A1a): "The Cities of Coos Bay and North Bend must be part of any discussion on land use, and the counties have a direct interest as well." The Commission mentioned that Coos County was included in negotiations for the Jordan Cove LNG deal after signing the Letter of Intent, but the Commission did not mention if the cities of Coos Bay and North Bend were included (Port-A1c). In late July and early August 2006, the Coos Bay and North Bend City Councils refused to take a stand about the LNG facility (C32b, C33a). If the Commission did not include the Cities in the Jordan Cove LNG deal, then the Commissioners failed another of the Governor's directives.
In business, the company is beholden to its shareholders. The Port's shareholders are residents within the Port district as well as other Oregonians, since the Port of Coos Bay is a State Port. It may take more time and effort in the short-term for the Port to meaningfully include the shareholders. But it pays dividends in the long-term when:
The Commissioners' decisions that exclude the input of shareholders may seemingly work in the short-term. However, the Commission does so at the cost of a loss of trust by the shareholders, who could fail to support the Port in the future. Indeed, there has already been a Letter to the Editor in The World suggesting voters write the Governor to replace the Port Commissioners because of their LNG actions (C39).
A successful business would use reasonable care and due diligence before making major decisions involving hundreds of millions of dollars. But it is questionable if the Port Commissioners exercised due diligence in their Jordan Cove LNG land deal (Table 1).
Further, a successful business would negotiate with all partners of a venture, not just the the partner responsible for the development of the venture. Otherwise, the venture may not be operated favorably to the business. Yet, Port Commission negotiations and interactions for the LNG venture with Jordan Cove Energy Project have only been publicly noted as being with Bob Braddock of Energy Projects Development LLC. But Energy Projects Development LLC is the minority partner in the Jordan Cove Energy Project and is only "responsible for the successful development of the proposed LNG facility" (Fort Chicago 2005). Once the LNG facility is developed, then the majority partner Fort Chicago and possibly Energy Fundamentals Group (both of Canada) can operate the facility with little input from the Port, and this may be detrimental to other potential Port partners such a container-shipping facility (Project April).
In business, it is important to serve one's partners well. The Port could have best served its business partner, Jordan Cove Energy Project, by trying to meaningfully include the public before deciding the Weyerhaeuser land deal involving the Jordan Cove LNG developers. The Commission could have held hearings and perhaps even a vote before signing the Letter of Intent for the Weyerhaeuser land purchase and Jordan Cove LNG lease/sale option deal, before voting to approve loans in April 2006, or at least before money exchanged hands and legal paperwork was signed in May and June 2006. But the Commission chose to proceed with the deals without public input and to try to build community consensus only after "the check is in the bank." If the public had been included, there would have been an opportunity for community consensus. Then the deal could have proceeded with public support, if the public chose to do so. Now there is controversy and distrust among residents of the Coos Bay area as well as among Coos County citizens who are affected by the pipeline from the LNG facility to near the California border (see Figure 1; see Keyword Index for LNG and Pipeline).
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
The Port of Coos Bay Commission is a State Commission, so Oregon's "Membership Handbook for Boards and Commissions" would apply. Page 4 of the Handbook indicates that "effective" board members "Recognize the board must operate in a public and open manner" and that:
"Oregon is known for an open form of government that allows for citizen participation and involvement. Two illustrations of this are the public records and open meetings laws that have been on the books for many years. These laws are designed to protect public interest, and to make sure the public's business is conducted in an open forum."
Oregon Revised Statutes (ORS) Chapter 192 deals with public meetings by government and includes:
"192.620 Policy. The Oregon form of government requires an informed public aware of the deliberations and decisions of governing bodies and the information upon which such decisions were made. It is the intent of ORS 192.610 to 192.690 that decisions of governing bodies be arrived at openly. [1973 c.172 §1]"
ORS 192.660 in ORS Chapter 192 lists several situations where governmental bodies can meet in executive sessions. Executive sessions are defined in ORS 192.610 as "any meeting or part of a meeting of a governing body which is closed to certain persons for deliberation on certain matters." In particular, ORS 192.660(2)(e) indicates that executive sessions can be held:
"To conduct deliberations with persons designated by the governing body to negotiate real property transactions."
The Port of Coos Bay Commissioners have met and deliberated in executive sessions about property deals until the "deal's done." A June 2006 article in The World about Commission Vice-President Caddy McKeown (C22a) reported:
"McKeown defended the port's secrecy in trying to recruit Tokuyama and other prospective industrial companies. In executive sessions, allowed under Oregon's 'open meetings laws, we can deliberate on the sale of property until the deal's done,' she said. 'In my mind, that's the way it should be done. It's all about the land.' "
The Port's definition of negotiations for land deals is narrow. In discussing Project TK, the World reported that Port staff indicated (C22a): "Talks never progressed to the point of negotiations." However, many citizens would consider the Port's discussing "costs for services and real estate" with Tokuyama as revealed in August 2005 (C4c) and presenting, in the Port's words, a "very attractive proposal" to Tokuyama in March 2006 (Port-A6: Item 5A) to be negotiating. The Port was clearly offering deals for Project TK before the public had a chance to comment about whether Project TK was advisable in view of environmental and aesthetic concerns that The Oregonian noted but that the Port and The World did not mention.
The Port Commissioners also have deliberated in executive sessions about the Jordan Cove LNG land deal and made decisions before notifying the public about the deal or including the public in making the decisions. It is legal to meet in executive sessions for "deliberations with persons designated by the governing body to negotiate real property transactions," and it is prudent to conduct the details of such negotiations in private. However, it is also prudent to include public input in deciding whether property transactions should occur or not before the final negotiations about the details starts. This is particularly true for controversial issues such as the Jordan Cove LNG terminal or potentially controversial issues such as Project TK that may have safety, environmental, or aesthetic effects. If open meetings are not held that meaningfully include public input about whether property deals should be conducted or not, then the public will justifiably feel that they are not included and wonder about what other "back-room" deals have been or are being made.
At a Port Commission meeting in February 2005, Marvin Caldera asked the Commissioners about a proposed raise to a Port executive, but the Commissioners approved the raise without answering (C1lb, C1o). Port Commissioner Brady Scott stated about the Commission's response (C1lb):
"There's nothing written in stone saying we have to respond to somebody's comment in the public comment period. We had all the information we needed."
A report about the March 2005 Port Commission meeting stated (C1o):
"[Commissioner Jerry] Hampel also vigorously defended the board's integrity and disputed accusations the commissioners operated in secret. 'We have never, ever, broken the code of ethics,' Hampel said after the meeting. 'That's absurd. We've done everything in the open.' ... Yet the board does have the legal right to private meetings, [Commissioner Caddy] McKeown said. While members have to approve motions in public, board members can hold some discussions in closed executive sessions. 'People don't always see the things we're working on, because we can't discuss them,' said McKeown. 'We do have a lot of irons in the fire - there are a lot of projects we're in pursuit of.' "
Commissioner Hampel's assertion that the Commission does "everything in the open" is not supported by the Commission's actions that do not include meaningful public input before making decisions about the land deal for the Jordan Cove LNG terminal, Project TK, and at least two other actions. The Commissioners may ceremoniously formalize decisions in public, but that is not the same as including public input before making major decisions.
In response to the February and March 2005 Port Commission meetings, The World editorialized (C1n) about the appointed Port Commissioners who started in January 2004 (C1a, C1b, C1c, C5) (boldface added):
"There's no doubt previous port commissions were fractious. Meetings often were colored by fiery debates and disagreement. There was plenty of discussion and when the smoke cleared, it was usually apparent why they took action. It's distressing the new commission members made these important - and expensive - decisions with little public dialogue. ... When they received the oath of office, the commissioners were charged by the governor with establishing a vision and moving the port into profitability. With little explanation, the board took a step that is costing nearly a quarter of a million dollars annually for two employees."
The Port Commissioners appear to continue to ignore some public input at Commission Meetings. For example, during the January 2006 meeting, three citizens each spoke about different subjects (use of North Spit settling pond, decommissioning of Cape Arago Lighthouse, and LNG) during the "Public Comments" period. The Commission's Minutes and The World's report of the meeting do not show a response or interest by the Commissioners in the comments (Port-A2a: Item 3, C6a).
At the Port Commission's 16 March 2006 meeting, North Bend resident Jody McCaffree spoke to the Commissioners (Port-A5: Item 3, C9). The World reported (C9)(boldface added):
" 'I'm frustrated because I feel like we're just accepting any junk industry without researching it,' McCaffree said. 'I think it needs to be opened up for public debate instead of charging ahead.'
"Port commissioners listened and moved onto other topics without comment."
Only after the Commission approved and signed contracts and money exchanged hands for the Weyerhaeuser and Jordan Cove LNG land deal during April-9 June 2006 did the Commission finally start addressing public concerns about the land deal. During the Commission's June 15 and July 20 meetings, the Commission appeared to respond to public concerns about the LNG terminal (Port-A9: Item 4, Port-A10). However, during the July 20 meeting (Port-A10), the Commission seemed to try to encourage citizens to leave before commenting by using three tactics: pushing the public comment period back towards the end of the meeting, interrupting the comment period to do additional business, and limiting each citizen to 4 minutes of comments. In contrast, public comments were given at the start of other Port Commission meetings (e.g., Port-A1a, Port-A5, Port-A6, Port-A8, Port-A9).
On 2 August 2006, the Commission answered some questions about the Memorandum of Agreement with Jordan Cove in The World (C33b). Only in August did the Commission finally put material to address concerns about their LNG land deal on the Port's web site (Port-A11, Port-A12a, Port-A12b). This material was first publicized in The World on Sept. 13 (C41a).
Minutes for the June 2006 Port of Coos Bay Commission meeting (Port-A9: Item 4) indicate that citizen Jody McCaffree did not think the Commission was doing enough to inform the public about meetings. So she requested the Port to inform her of meetings. However, the Commission is often deliberating in executive sessions that are not open to the public. Consequently, even if the Port tells citizens about public meetings, citizens are not allowed at executive sessions where deliberations occur until, as Commission Vice-President Caddy McKeown states (C22a), the "deal's done."
Is the Port of Coos Bay Commission following the intent of ORS 192.620 that "decisions of governing bodies be arrived at openly"?
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
Black's Law Dictionary (1999:204) defines "reasonable care":
As a test of liability for negligence, the degree of care that a prudent and competent person engaged in the same line of business or endeavor would exercise under similar circumstances. -- Also termed "due care"; "ordinary care"; "adequate care"; "proper care."
And Black's Law Dictionary (1999:204) defines "care" as:
1. Serious attention; heed (written with care)
2. Under the law of negligence, the conduct demanded of a person in a given situation. Typically, this involves a person's giving attention both to possible dangers, mistakes, and pitfalls and to ways of ensuring that these risks do not materialize (standard of care).
Black's Law Dictionary (1999:468) defines "due diligence":
The diligence reasonably expected from, and ordinarily exercised by, a person who seeks to satisfy a legal requirement or to discharge an obligation.
Boards and Commissions need to use due diligence in discharging their obligations as board members or commissioners in reaching decisions. For example, a Grand Jury found that a School Board in California "did not exercise due diligence" (Santa Barbara Grand Jury 1997: Finding 1).
Below are items asking whether the Port Commissioners acted prudently, with reasonable care, or exercised due diligence in approving the Commission's land deal for the Jordan Cove LNG terminal:
Because the Commissioners did not build community consensus for the Jordan Cove project before approving the land deal and the exchange of money, there is now considerable controversy and bickering in the Coos Bay area (e.g., search The World for "LNG"), which is exactly what the Governor directed the Commissioners to avoid (Port-A1a, C1c). Were the Commissioners negligent in not following the Governor's directives?
"No board member should make decisions or take unilateral action without the consent of the board as a whole. ... Board members should remember they are seen as representatives of the board when they appear at industry or professional gatherings. They must take care not to appear to be speaking for the board unless specifically authorized by the board to do so."
However, Port documents indicate that Commission President David Kronsteiner testified on his own about the position of the entire Commission. The Commission's Minutes state that on 11 July 2006 Kronsteiner "gave testimony on behalf of the Port before the Federal Energy Regulatory Commission (FERC) and the U.S. Coast Guard in reference to the Jordan Cove Energy Project L.P. (Docket No. PF06-25-000) and the Pacific Connector Gas Pipeline, L.P. (Docket No PF06-26-000)" (Port-A10: Item 6A). A Federal Energy Regulatory Commission (FERC) transcript of the meeting also indicates that Kronsteiner testified "on behalf of the Port" (Kronsteiner 2006:53), and the FERC transcript and Commission's Minutes indicate that Kronsteiner testified about (Kronsteiner 2006:54, Port-A10: Item 6A):
"The commitment of the Port of Coos Bay to cooperatively work with FERC, the U.S. Coast Guard and other stakeholders to support the eventual development of the Jordan Cove Energy Project and the Pacific Connector Gas Pipeline."The meeting in question was the July 11 public meeting held by the Federal Energy Regulatory Commission and U.S. Guard at Southwestern Oregon Community College in Coos Bay (Kronsteiner 2006, C24a, C27). The World reported that "David Kronsteiner, president of the Oregon International Port of Coos Bay" was one of a very few people to make "positive statements" about the proposed Jordan Cove LNG project (C27).
Kronsteiner's testimony had evidently not been approved by the other Commissioners and evidently was legally questionable because at the Commission's July 20 meeting, the Port's attorney "recommends the ratification of this testimony by the full Board" (Port-A10: Item 6A). This resulted in Commissioner McKeown making a motion to ratify Kronsteiner's testimony and Commissioner Hampel seconding it (Port-A10: Item 6A). Since only three of the five Commissioners were present at this meeting (Kronsteiner, McKeown, and Hampel), Kronsteiner's own vote was needed to provide the third vote that would be a majority of the five member Commission (Port-A10: Item 6A).
"It is important to keep in mind that all members have been appointed to the board to serve the public at large. The concerns and points of view of all interested parties must be represented and considered, but ultimately, the primary responsibility of every board member is to protect the health, safety and welfare of the general public."If you were recommended by a professional association or special interest group, you will be expected to provide the board with your technical expertise, and to bring the point of view of the group to the board. However, you were not appointed to serve only as the representative of a specific group. When the group's interest conflicts with that of the general public, your primary responsibility is to the public. All board members must work for the benefit of the public first, with the good of any particular profession, industry or special interest group taking a secondary position."
The Commission did not demonstrate that the LNG project is in the interest of the "general public" before approving the land deal for it. Many constituents of the Port have great concerns about their "health, safety and welfare" because of the LNG project. The only publicized survey informally indicated that only 7 of 39 people were for it, 15 were undecided, and 14 were against it on 12 June 2006 (C21). At the only formal public hearing in which citizens could testify about it, only about a "handful" of the approximately 90 speakers spoke in favor of it on 11 July 2006 (C27). The World editorialized for a vote about the Jordan Cove LNG facility in September 2006 because of divided community opinion (C38).
"LNG in the United States has a sketchy past. Because of rising natural gas prices in the 1970s, LNG project sponsors anticipated large profits and constructed the four U.S. LNG receiving terminals in existence today. Dreams of high profits never materialized, however, because natural gas prices began a precipitous decline after their 1983 peak, and all but one of the four were mothballed. The facility at Everett, Massachusetts, remained in operation only because it was located in a heavily concentrated market center where demand was high and the cost of bringing conventional supplies to market by pipeline was high enough to exceed the cost of LNG (74). In 1989, the Lake Charles, Louisiana, facility was reactivated (75), mainly to receive spot cargos.U.S. LNG terminals may be structurally sound, but they appear financially uncertain. Is it prudent for the Port Commission not to include the public in the decision-making process for such a risky venture? Is the Port Commission building a "house of cards" with its development plans that can collapse if the price of natural gas drops or if LNG becomes too expensive or is in short supply?
"For close to 20 years, LNG was not considered to be an economical source of natural gas. As a result of the high 2000-2001 prices and the growing demand for natural gas, interest in LNG has renewed to the point that not only are the other two facilities, at Elba Island, Georgia, and Cove Point, Maryland, reopening (Elba reopened in October 2001), but at least 13 new facilities have been proposed to serve U.S. markets (Table 8)."
"commented that he has been working a lot with Bob Braddock and the Jordan Cove Energy Project. Port staff had the opportunity to meet with Mr. Braddock's engineering consultants on what the Port is involved in, and how staff can help with their project."
However, Braddock's promise that the Coos Bay area would have the cheapest natural gas on the West Coast seems questionable, so relying on his information may also be questionable.
The Commission privately worked with the South Coast Development Council Inc.'s Director Ron Opitz to attract the Jordan Cove LNG developers to Coos Bay in 2004; Opitz had formerly worked for NW Natural gas (C1da, C1db). A prudent person would probably recognize that Opitz may have a point of view favoring LNG. Two Commissioners visited a LNG facility in Japan and discussed their operations with LNG facility staff (Port-A10: Item 4A)--again, this source of information could be expected to favor LNG.
Where is the Commission's documentation that they did a balanced review of LNG facilities and their consequences before approving the Port's land deal with Jordan Cove LNG developers?
Did the State Port Commissioners act with "reasonable care" or conduct "due diligence" before covertly attracting and, in August 2004, publicly supporting the Jordan Cove LNG facility (C1da, C1db)? Before privately negotiating with the Jordan Cove LNG developers and publicly signing a Letter of Intent with Weyerhaeuser for purchasing 1,300 acres of land and executing a lease/sale option with Jordan Cove in October 2005 (Port-A1c; Timetable for Port's LNG Land Deal)? Before signing contracts for loans and exchanging money ("the check is in the bank") for the Weyerhaeuser land sale and Jordan Cove land deal in May-June 2006? Before the Port Commission's President testified to the Federal Energy Regulatory Commission (FERC) and U.S. Coast Guard on 11 July 2006 in favor of the LNG project without prior approval from the other Port Commissioners (Kronsteiner's Testimony)? If not, is the Port Commission negligent?
In June and July 2006, the Port of Coos Bay stated that it now has a "two year contingency/due diligence period" about their land deal with Jordan Cove LNG developers (Port-A2a: Item 6A, C19). But would a prudent Port Commission have already conducted due diligence before approving the Jordan Cove LNG land deal (see Timetable for Port's LNG Land Deal)? Port of Coos Bay staff have been noted as performing due diligence (Port-A1c, Port-A11: p. 24), but it is also the responsibility of the Commissioners to exercise due diligence.
The Port of Coos Bay continues to demonstrate a lack of due diligence because they did not host a balanced program about the risks of spills for LNG tankers and terminals during the 6 December 2006 LNG demonstration paid for by Jordan Cove Energy Project.
The Port proposed a process with public forums for an "open and balanced discussion" for shipbreaking issues in February 2006 that could be described as conducting due diligence, so they are aware of the importance this process to be prudent (Port-A2b, Port-A3). Why did they not also do so for the Commission's land deal for the Jordan Cove LNG facility?
Have the Port Commissioners handled Project TK and other issues with due diligence? Or do the Commissioners have a pattern of making decisions without including the public or seeking independent reviews as a reasonable Commissioner would before approving projects involving hundreds of millions of dollars or that could greatly affect the Coos Bay area (Table 1)?
If citizens have concerns about the Port of Coos Bay Commissioners, their only recourse may be to contact Governor Kulongoski, who appointed the Commissioners and who may not re-appoint a Commissioner or who can ask a Commissioner to resign as Governor Kulongoski has done in the past (see Port of Coos Bay Commissioners).
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
Please note that the Port Commission's land deal with Jordan Cove Energy Project is a completely separate process from the Federal Energy Regulatory Commission's (FERC) review of Jordan Cove's LNG terminal plan. The Port Commission now seems to try to lay all responsibility for the LNG facility siting on FERC, but it has been the Port Commission's actions and land deal that have given Jordan Cove LNG developers a viable project that is more likely to be approved by FERC.
Below is a timetable for some of the events relevant to the Port Commission's land deal with the Jordan Cove LNG terminal developers.
Energy Projects Development LLC is a Colorado Limited Liability Company (Jordan Cove 2004:1) and a "conglomerate incorporated by four investment partners specifically for the [Jordan Cove LNG terminal] venture" (C1da, C1f, C1g). The members, location and their ownership interest include: Robert (Bob) Braddock, Evergreen, Colorado (33.3% ownership); Pebcor Enterprises LLC, Denver, Colorado (33.3% ownership), Brant Energy Inc., Salem, New Hampshire (16.7% ownership), and JTWI Inc., Denver, Colorado (16.7% ownership) (Jordan Cove 2004:2). So Braddock is more than just a "project manager" as he has been portrayed in the news media. Public Citizen reports that one member of the Energy Projects Development management team is "Robert McFarlane, former National Security Advisor for the Reagan Administration." Energy Projects Development LLC is evidently private about itself because I was unable to find a web site for it on 18 August and 11 November 2006. To my knowledge, Oregon news media have either not or only minimally reported about the owners or background of Energy Projects Development LLC, even though the Jordan Cove LNG facility and associated pipeline will greatly change Coos County and also affect southwestern Oregon.
From the beginning of the Jordan Cove LNG project, Energy Projects Development LLC expected to get a partner with financial resources (C4b). To make their LNG project viable, Energy Projects Development critically needed to promote their project enough to leverage their insufficient finances to attract large investors; they did so by partnering with or gaining the support of local and state governments (see Port of Coos Bay's Explanations).
In at least 2006, there are 26 SCDC board members (http://www.scdcinc.org/about.htm), including:
The SCDC was instrumental not only in attracting the Jordan Cove LNG developers but also in commissioning and promoting the pro-LNG report by ECONorthwest that seems unrealistical (see CB-SCDC.htm).
I do not know when The World's president and publisher Greg Stevens became a SCDC board member. I also do not know if his SCDC membership is a factor in why The World has not done adequate investigative reporting about the proposed LNG facility and associated Pacific Connector Gas Pipeline or favorably announced the SCDC commissioned report supporting the Jordan Cove LNG facility (see CB-SCDC.htm).
Since two (David Kronsteiner and Dan Smith) of the five Port Commissioners also served on the SCDC board as did Jeff McKeown, the husband of a third Commissioner Caddy McKeown (http://www.portofcoosbay.com/commstaff.htm, http://www.scdcinc.org/about.htm, B31), the connection of the SCDC and the Commission in attracting the LNG developers may have been very close. The World reported on 20 August 2004 (C1da):
"The local project received the enthusiastic support of the Oregon International Port of Coos Bay, which has worked with the SCDC [South Coast Development Council] behind the scenes to bring the development to its current state and stands to gain two ships per month if the project succeeds."
The August 2004 announcement is only eight months after all five Port Commissioners took office, and five months before Jeffrey Bishop started work at the Port of Coos Bay as General Manager (see Port of Coos Bay Commissioners).
" 'It's not right to have non-elected people decide these things when we taxpayers are paying for this, ' McCaffree politely but firmly told Braddock. 'I think this is all being done without any public input.' "
"they should bring in independent experts to analyze the project instead of relying on government oversight. 'Expertise has fallen greatly with federal, state and county governments,' said Curt Peterson, a Portland State University professor who has mapped the impacts of earthquakes in southern Oregon. 'One way to make sure (standards are being met) is to bring someone in as an overviewer.' "
"In the spring of 2005, West Coast Utility became interested in Coos Bay and wanted to set up a second LNG import terminal. This terminal would be much larger than Jordan Cove with over 200 vessel calls per year. Research into this company found they had a reputation for acquiring large acreages and leaving the surplus fallow. "
The Minutes about Bishop's presentation at the July 2006 Port Commission meeting also state (Port-A10: Item 4A):
"In 2005, the Federal Energy Policy Act limited local control in LNG facilities. Both LNG facilities would have been on private property with little or no local control. There is no guarantee that both terminals would not have been built. Accordingly, in entering into negotiations with Jordan Cove to build a slip, the Port took steps to limit the number of terminals by controlling the site the second terminal was being proposed for. In that process, Jordan Cove agreed to move sites; they agreed to leverage their development to secure a large portfolio of industrial land for future industrial development on the North Spit; Jordan Cove agreed to allow the Port to leverage marine facilities to pursue a general purpose cargo terminal for a more diversified maritime business environment; and they agreed to submit to a leased berth with local control. The lease required Jordan Cove to pay taxes; to pay fees to offset costs of services; the lease is binding on Jordan Cove and most importantly it is binding on any of its successors. Without that, it would have been possible that both facilities would have been built with no local control whatsoever. Local control does not give the Port the ability to stop the project; that solely rests with the Federal Energy Regulatory Commission's (FERC) actions. It was a tough decision for the Commission, but because the West Coast Utility's larger project went counter to the mission and values of the Port, the Port stepped in and got involved."
The Port posted an undated "LNG Terminal & Natural Gas Pipeline Questions & Answers" sometime between 26 August and 2 September 2006 on their website (Port-A11). This page referred to the second utility as a "major western U.S. utility provider" and that the company requested confidentiality and the Port was doing so (Port-A11: p. 1-2), so did the transcriber of the July Commission Minutes misunderstood "West Coast Utility" as the name of a company and the Commissioners approve the Minutes without catching this error? The Port does not mention problems with the second utility in Port-A11: p. 1-2 like it did in its July Minutes (Port-A10).
The "Questions & Answers" also indicates that the second utility approached the Port in the fall of 2005 (Port-A11: p. 1-2), not the spring of 2005 as in the Commission's July Minutes. According to the July Minutes, the Commissioners made a "tough decision" about the second developer, and it seems that this would have been a tougher decision in the spring of 2005 than in the fall of 2005, when the Port signed its Letter of Intent with the Jordan Cove LNG developers on October 20.
If the Commission's Minutes are accurate and a second LNG developer approached the Port in the spring of 2005 (Port-A10), why did the Port choose to deal only with Energy Projects Development LLC in the spring of 2005? Energy Projects Development LLC is only a Limited Liability Company (Jordan Cove Energy Project 2004:1-2) that was formed specifically for the Jordan Cove LNG facility (C1da, C1f, C1g). Energy Projects Development acknowledged that it had been looking for a partner with "financial resources" when it began the LNG terminal project (C4b)--didn't the Port Commission know this in the spring of 2005 and earlier? So how would Energy Projects Development LLC have a better record than the second LNG developer? Adequate money to develop the Jordan Cove LNG terminal did not materialize until late July 2005, several months after the second LNG developer's interest, according to the Commission's July Minutes (Port-A10).
Are the Port's nonpublic dealings with Energy Projects Development LLC at the expense of another utility company questionable?
"Braddock concluded by seeking the help of business owners and city officials in building public support for the LNG terminal, especially to win over those skeptical of its safety. At previous public forums Energy Products has held to explain the gas terminal project, some residents have warned of its vulnerability to a tsunami and the risk of a natural gas explosion triggering fires in North Bend."
SCDC board member and then Coos Bay City Councilor Jeff McKeown asked Braddock (C2a):
"What can we do as an organization to help you be successful?"
Braddock replied (C2a)(boldface added0:
"keep the facts in front of the people so if it gets debated, it gets debated on the basis of facts instead of a purely emotional debate that gives nothing to anyone."
McKeown is also the husband of Commission Vice-President Caddy McKeown (B31). Are the only "facts" those that are favorable to the Jordan Cove LNG facility? Bob Braddock is not an independent source because he has such a strong financial stake in the success of Jordan Cove, since he owned 33% of Energy Products Development LLC (Jordan Cove Energy Project 2004:2).
Energy Projects Development LLC had expected a partner when it started the project, and Energy Projects Development LLC stated that Fort Chicago brought "financial resources" (C4b).
To my knowledge, The World has not reported details about Fort Chicago Energy Partners L.P. or Energy Fundamentals Group Inc. Yet, one or both Canadian companies apparently would be responsible for the operation of the LNG facility after it has been developed by Energy Projects Development LLC.
Energy Projects Development's responsibility for the terminal appears to end once it has been constructed. Why hasn't the news media reported about the company or companies responsible for operating the LNG terminal? They will be responsible for its safe operation, which is of concern to Coos County residents.
The Port also announced that it was negotiating with the State of Oregon to borrow $15 million and with Umpqua Bank to borrow $10 million to pay for the $25 million Weyerhaeuser property (Port-A1c). It is not stated if the Port's lobbyist Ken Messerle helped in negotiations with the State.
In searching the Archives of The World, I found no mention of negotiations to include the Jordan Cove LNG developers in the land deal prior to the Commission's announcement on Oct. 20. People at the Commission's meeting who were not Port staff were taken by surprise by the announcement (C4f), which suggests that they were not aware of negotiations. The World reported that Bishop wondered about community reaction after the meeting (C4f), which also suggests that he was aware that the Port Commission had not built a public consensus before making this decision and that the public would be surprised.
Port Commission Minutes state (Port-A6: Item E; boldface added):
"In October of 2005 The Oregon International Port of Coos Bay concluded business negotiations with the Weyerhaeuser Corporation and Jordan Cove Energy Partners to acquire and sell certain real estate assets on the North Spit."
Note the word "concluded." The Commissioners did not allow an opportunity for public input into the Commission's decision-making process or try to develop community support before making their land deal decisions.
On Feb. 9, The World also editorialized (B1)(boldface added):
"It should be apparent the shipbreaking issue and other industrial development projects, such as liquid natural gas facilities, aren't going to go away. And agencies and decision-makers in Coos County should make sure area residents have every chance to learn along the way. Local residents aren't merely taxpayers. They are citizens who deserve to be informed and given the chance to comment on policies and discussions over proposed developments. And those opportunities for public participation need to materialize before public officials are headed into the final curve on the road to decision-making."
Yet the Port Commissioners ignored these calls for public discussions and information about the Jordan Cove LNG facility and for an independent study and proceeded to finalize the deals with Weyerhaeuser and Jordan Cove Energy without incorporating public input or developing community consensus.
The shipbreaking diversion came at a critical time for the Port's land deal with Weyerhaeuser and Jordan Cove LNG developers because loans were authorized, papers were signed, and money exchanged hands during April-early June 2006.
Denny Vaughan had proposed the shipbreaking facility at Coos Bay, but perhaps the Port was never serious about shipbreaking. The Port was actually interested in the bigger LNG terminal and pipeline that could lead to Port development (see Gateway Port). The World reported in October 2006 (B39):
" 'I personally was hoping that maybe Coos Bay or the port would be a little more proactive. I just never got a real strong calling,' Vaughan said in an interview last month."
" 'I'm frustrated because I feel like we're just accepting any junk industry without researching it,' McCaffree said. 'I think it needs to be opened up for public debate instead of charging ahead.'
"Port commissioners listened and moved onto other topics without comment."
The Commission's land deal with Weyerhaeuser is financially contingent upon the successful siting of the Jordan Cove LNG facility on the former Weyerhaeuser property (Port-A1c, Port-A6: Item E, Port-A9: Item 6A, B15, C4f, C5, C13, C19).
This meeting was also the only one held by the Pacific Connector Partners in Coos County (Pacific Connector Gas Pipeline 2006b). The Partners held open houses in June at other areas in southwestern Oregon affected by their pipeline--no more open houses are planned or are necessary. The Pacific Connector Partners stated: "Each open house provided information on the project, the pipeline route, the construction schedule, and safety and environmental issues" (Pacific Connector Gas Pipeline 2006b). Note that there was no room for public input about whether the pipeline should be constructed or not at these open houses. The World announced the LNG portion of the June 12 open house but did not tell readers that this would be the only open house for the pipeline in the Coos Bay area (Pacific Connector Gas Pipeline 2006b, C16, C17, C18, C20). There is no local option for approval/disapproval of this pipeline, and landowners and citizens can only comment to FERC. If a landowner does not grant an easement for the pipeline, the law of Eminent Domain can be used to acquire the easement.
"The LNG unloading facilities will be capable of unloading on the order of 80 ships per year. The actual number of LNG ships will be dependent on the capacity of the LNG ships."
On p. 1-4 of the same report, Jordan Cove wrote that their terminal could unload LNG ships ranging in capacity from 89,000-160,000 cubic meters. If small tankers are used, the number of LNG tankers to the Jordan Cove LNG facility may be more than the 80 ships per year publicized in the Coos Bay area (e.g., C9, C11).
The first to testify in favor of the LNG terminal was Ken Messerle (C27). He identified himself as an individual and former State Senator (Messerle 2006), not as a lobbyist. Messerle started to be a lobbyist for the Port of Coos Bay in April 2005 (see Messerle). Like Port Commission President David Kronsteiner testified later at this hearing (Kronsteiner 2006), Messerle testified in favor of the LNG terminal and that the pipeline should avoid residential area (Messerle 2006). In December 2006, Messerle requested the Port raise his lobbyist pay from $1,000 to $2,000 per month (see Messerle).
Port Commission President David Kronsteiner testified "on behalf of the Port" in favor of the LNG terminal at this hearing, but he did so before his testimony had been approved by the rest of the Port Commission (see discussion of Kronsteiner's testimony).
At this meeting, citizens again asked the Commissioners to conduct an independent study (Port-A10: Item 5, p. 10-12, C32a). However, there is no indication that the Commissioners responded to this request (Port-A10, C32a).
The Commission's Minutes for this meeting state (Port-A10: Item 4A):
"Commissioner McKeown commented that after looking at this whole process for two years, personally she is very comfortable with it. She hopes that everyone here will take the time to do the research and get answers from reliable sources and make informed decisions."
McKeown is Vice President of the Commission. Why didn't she or the other Commissioners share the information they found, instead of now telling constituents to do their own research after all the Port's LNG land deal decisions have already been made? Why didn't the Commissioners follow the directives of the Governor who appointed them to develop community consensus before proceeding on economic plans (Port-A1a)?
"Then he spoke to the LNG issue, saying he didn't like how the project morphed from a small facility to a big project that won't use the existing natural gas pipeline and fails to see why it should provide energy for California."
In September 2004, Rep. DeFazio spoke in favor of a Coos Bay LNG facility (C1e). In October 2005, the Port of Coos Bay credited Rep. DeFazio with being "key in facilitating communications" in the Weyerhaeuser land deal that depended upon the Jordan Cove LNG facility (Port-A1c). But as Rep. DeFazio suggests, the scope of the project greatly increased after the Port Commission's land deal with Weyerhaeuser and Jordan Cove LNG developers (see Port's Explanations) and it appears that the taxpayer-funded Coos County pipeline will be outcompeted by a new pipeline to near the California border.
An informal poll at the end of the meeting indicated that "the crowd clearly had a majority of LNG opponents" (C45b). Braddock responded to this informal vote by saying that "I don't think (the audience) represents the majority" of people in "Coos Bay or the United States" (C45b).
"It was mostly fire department and other public officials at the invitation-only demonstrations paid for by Jordan Cove Energy Projects and co-hosted by the Oregon International Port of Coos Bay. The programs were designed to answer questions and perhaps ease fears in the minds of residents worried about development and the potential dangers of a proposed LNG import terminal on Coos Bay's North Spit."
KCBY-TV's story (C48c) "LNG Demonstration Hopes to Answer Questions and Allay Fears" failed to mention that this demo was paid for by Jordan Cove LNG developers and was by invitation-only.
The demonstration was presented by Kirk Richardson, program supervisor for LNG/marine firefighting at Texas A&M's Emergency Services Training Institute (C48d) (see http://www.teex.com/esti/). If there was no risk or need for a LNG/marine firefighting unit, there would not be any.
Both The World and KCBY-TV failed to provide balance, so their stories served as advertisements for the pro-LNG perspective of the Port and Jordan Cove LNG developers that there is minimal risk and people should not be concerned. With some journalistic searching, the reporters would have found reports from other LNG experts who have safety concerns because of the potential for LNG spills (e.g., see Havens 2004, Havens 2005, and Ramsayer 2005 by or about Jerry Havens, Director of the Chemical Hazards Research Center, University of Arkansas; Mannan et al. 2005 by staff in the Texas A&M's Chemical Engineering Department). Sandia National Laboratories (2004:14) reviewed the risks and threats of a LNG spill from LNG cargo tankers and concluded that:
"3. Risks from accidental LNG spills, such as collisions and groundings, are small and manageable with current safety policies and practices.""4. Risks from intentional events, such as terrorist acts, can be significantly reduced with appropriate security, planning, prevention, and mitigation.
"5. This report includes a general analysis for a range of intentional attacks. The consequences from an intentional breach can be more severe than those from accidental breaches. Multiple techniques exist to enhance LNG spill safety and security management and to reduce the potential of a large LNG spill due to intentional threats. If effectively implemented, these techniques could significantly reduce the potential for an intentional LNG spill."
The Sandia (2004:74) report states in its section "7.3.2 Guidance on Risk Management for Accidental Spills":
"Zone 1. These are areas in which LNG shipments transit narrow harbors or channels, pass under major bridges or over major tunnels, or come within approximately 250 meters of people and major infrastructure elements, such as military facilities, population and commercial centers, or national icons. Within this zone, the risk and consequences of an accidental LNG spill could be significant and have severe negative impacts. Thermal radiation could pose a severe public safety and property hazard and can damage or significantly disrupt critical infrastructure located in this area."Further, the Sandia (2004:75) report notes in its section "7.3.3 Guidance on Risk Management for Intentional LNG Spills":
"Zone 1. These are areas where LNG shipments occur in either narrow harbors or channels, pass under major bridges or over tunnels, or come within approximately 500 meters of major infrastructure elements, such as military facilities, population and commercial centers, or national icons. In these areas, the risk and consequences of a large LNG spill could be significant and have severe negative impacts. Thermal radiation can pose a severe public safety and property hazard and can damage or significantly disrupt critical infrastructure located in this area."
At Coos Bay, LNG tankers would be traveling through narrow jetties and harbor to go to the proposed LNG terminal.
The Sandia report makes it clear that risks are not as minimal as the The World's and KCBY-TV's stories portray. Sandia (2004:15-16) indicates that better safety and security measures need to be implemented.
There are risks in doing most projects. Perhaps, the risk is worth it at Coos Bay, but people need accurate, balanced information to make a decision. The World's and KCBY-TV's reporters served Jordan Cove Energy Project well, but failed to serve Coos Bay area residents.
The Port of Coos Bay also demonstrated a lack of due diligence in sponsoring this demonstration because it did not host a balanced program about the risks for LNG tankers and terminals.
Because of the Energy Policy Act of 2005 (C3b, C3c), the Port Commission's land deal was the only chance for local government and citizens to approve/disapprove the LNG facility on Port property. After the Commission's deal went through, local citizens can only comment to federal agencies that will make the final decision about permitting the LNG facility. However, comments by local citizens may not make much difference because federal agencies may believe that they have a mandate to approve a LNG facility over local and state objections as a consequence of the passage of the Energy Policy Act in 2005 (C3b, C3c).
Perhaps the LNG terminal deal is good for the Oregon International Port of Coos Bay (Port-A1c, Port-A9: Item 6A, Port-A10: Item 4A, Port-A12a, Port-A12b, C4f). But the Port Commission completed the Weyerhaeuser and Jordan Cove Energy Project land deal without meaningful public input and without developing community consensus before making decisions. This seems to violate the intent of Oregon's open government policy and is also contrary to the Governor's directive to the Commissioners to develop a community consensus for its development projects. The Commission's handling of the Jordan Cove LNG issue signals the public that they will probably also not be invited to provide meaningful input into future Port deals.
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
The Jordan Cove Energy Project LNG terminal and the Pacific Connector Gas Pipeline are dependent upon each other. Without the large LNG facility there would be no need for the new pipeline because the current 12-inch Coos County/NW Natural gas pipeline would be sufficient. Without the Pacific Connector Gas Pipeline's capability of handling 1 billion cubic feet of gas daily (Pacific Connector Gas Pipeline 2006a), the current Jordan Cove LNG terminal design with a billion cubic feet daily capacity would not be possible. To get FERC approval an LNG terminal facility must be able to output all gas (C8b).
The Jordan Cove LNG facility needs to be able to produce 1 billion cubic feet of natural gas daily in order to compete with the 1.3 billion cubic feet production of the proposed Bradwood Landing LNG facility (which is further along in the permitting process) and to show FERC that there is a need for the Jordan Cove LNG terminal (Jordan Cove Energy Project 2006e: section 1.1.1 "Purpose and Need", Jordan Cove Energy Project 2006f: "Alternatives").
The siting of Project TK (Tokuyama) at Coos Bay appears to be dependent upon the successful siting of the Jordan Cove LNG facility because Tokuyama's proposed $600 million plant needs the cheap natural gas that would be supplied by the Jordan Cove LNG facility as an energy source (Port-A10: Item 4D, C22c, C35).
The Port's Gateway Port project depends upon the Jordan Cove LNG facility for financing.
Jordan Cove's Bob Braddock says that their LNG terminal will also attract other energy-based industries (Jordan Cove Energy Project 2005:42, C7). Braddock also promised that "Coos County will have the lowest natural gas prices on the West Coast," though this seems unrealistic.
|
Table 1. Estimated expenditures totaling over $1 billion for
facilities apparently dependent upon Jordan Cove Energy Project's LNG terminal. See text for discussion. |
|
|
Projected Expenditure |
Project |
|
$500+ million |
Jordan Cove Energy Project
LNG facility (Jordan Cove Energy Project 2006d, C32a, C32b) |
|
$750-850 million |
|
|
$600 million |
Project TK ($600 million in August 2006, C35; $500 million in June 2006, C22c; it was revealed in July 2006 that Project TK has expanded in scope [Port-A10: Item 4D]) |
|
$40? million |
Port's Project Gateway
"multipurpose cargo terminal" (see Gateway Project) |
|
? million |
other projects attracted by
natural gas supplied by Jordan Cove (see text for discussion.) |
|
|
|
|
Total=$1.89-$1.99+ billion |
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[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
Figure 1. Map of Pacific Connector Gas Pipeline Project route from the Pacific Connector web site (http://www.pacificconnectorgp.com/map.asp) on 12 December 2006. In 2006, this was listed as a 223-mile pipeline (Pacific Connector Gas Pipeline 2006a), but in February 2007 it was reported to be about 231 miles (Pacific Connector Gas Pipeline 2007, Williams 2007). (Also see map for Western North American natural gas pipelines on unnumbered p. 2 of Jordan Cove Energy Project 2005.)
The plan is for LNG delivered to the Jordan Cove LNG terminal to be regassified and pumped out on the Pacific Connector Gas Pipeline (projected 1.0 billion cubic feet per day) and the Coos County pipeline (0.05 billion cubic feet per day or 1/20th of that for the Pacific Connector)(Jordan Cove Energy Project 2006b). The two pipelines both connect to Williams Northwest gas pipeline near Roseburg, and the Pacific Connector is proposed to continue and interconnect with Pacific Gas & Electric Company's backbone system, Tuscarora's Gas Transmission system, and the Gas Transmission Northwest line just north of the California border at Malin, Oregon (Figure 1, Pacific Connector Gas Pipeline 2007, Williams 2007).
Jordan Cove produced gas could also indirectly increase supplies to California if Jordan Cove gas partially supplies Oregon so that gas that would have been used in Oregon would be piped to California.
The Eugene Register-Guard reports that the target market for the natural produced by the proposed Jordan Cove LNG terminal would be Northern California (C48a).
Jordan Cove's Bob Braddock pointedly denies that the Jordan Cove natural gas would be supplied only to California (C48a). For example, The World reported (C11):
"Braddock answered that it was 'patently wrong' to say the natural gas in Coos County's proposed holding facility would benefit only California."and (C15):
" 'All these people talking about the gas only going to California, they're wrongheaded,' said Braddock."and at an 18 October 2006 public meeting, it was also reported that Braddock "tried to dispel the idea that the terminal's installation would only serve energy consumers in California" (C45b).
Braddock's statements seem lawyerly precise in his use of words. The critical word in his statements is "only." Braddock's rebuttals to concerns that most of the gas would be going to California is to argue that the natural gas would not be "only" going to California. If 99% of the gas goes to California, Braddock would be correct because not all of the gas would only be going to California.
Evidence that suggests that the target market for Jordan Cove's natural gas is California:
Discontent about the target area for the Jordan Cove natural gas being California includes:
"Williams is meeting with landowners who don't want a pipeline on their property and negotiating solutions, project manager Steve Potts said. But about 10 percent of the affected landowners remain opposed and, for those, Williams will try to persuade the federal government to let the company use eminent domain."
"Daniel Serres with the Friends of Living Oregon Waters tried to drive home the idea that a majority of the products of the terminal and pipeline won't be going to the area, 'We get 10% of the gas, maybe slightly more. We get 100% of the pipeline and terminal, that means we get 100% of the mess.' "
"Then he spoke to the LNG issue, saying he didn't like how the project morphed from a small facility to a big project that won't use the existing natural gas pipeline and fails to see why it should provide energy for California."
" 'This pipeline would entail clear-cutting a 100-foot-wide swath through some of our very best forests, much of our reserves for endangered species, not to mention all the private land, Eatherington said."
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The Coos County natural gas pipeline connecting Coos Bay and the Williams pipeline near Roseburg was financed by a $27 million bond approved by voters, $20 million in State of Oregon Lottery funds, and $4 million in State economic development grants (C1da, C1g). State lottery funding required passage by the Oregon Legislature (House Bill 2832 sponsored by Representative Ken Messerle and Senator Veral Tarno) in 1999 (Oregon Legislature 1999a, 1999b). At a hearing for House Bill 2832, a representative of Northwest Natural gas company testified that it was not economically feasible for their company to construct the pipeline, but that it was economical for them to construct a local distribution system in Coos County if the pipeline was constructed (search for "Brian McCabe" in Oregon Legislature 1999a).
The Oregon Legislature also had to give permission for the Coos County pipeline in 2003 (Senate Bill 321 sponsored by Senator Ken Messerle and Representatives Wayne Krieger and Joanne Verger)(Oregon Legislature 2003, Oregon Rural Electric Cooperative 2003).
Natural gas in the pipeline would be distributed by NW Natural gas, which has a 5 mile pipeline from North Spit to the Coos County pipeline (Jordan Cove Energy Project 2005:4, C1g, C1j).
Construction of the 12-inch, 60-mile long Coos County natural gas pipeline began in June 2003 and was troubled by construction problems, environmental issues, and lawsuits (B33, C1j, C10). Natural gas first started flowing in the pipeline in January 2005 (C1j), and it connects to the Williams pipeline near Roseburg (Jordan Cove Energy Project 2005:4, C1da, C1g).
LNG terminal facilities are required to have a pipeline to output production before filing a siting application (C8b). South Coast Development Council Inc. Director Ron Opitz credited the Coos County pipeline with being the "primary reason" why the Jordan LNG developers were attracted to Coos Bay (C1j). In September 2004, The World's Andrew Sirocchi wrote that "[Jordan Cove's Bob] Braddock said Coos Bay is the ideal location for the construction of the terminal because Coos County's pipeline will allow access to the I-5 corridor, along the Williams-owned pipeline that runs from Grants Pass and north to Portland" (C1g). In their January 2005 presentation at an Information Meeting by the Oregon Energy Facilities Siting Council, Jordan Cove Energy Project (2005: 4, 8) indicated that they chose Coos Bay for the Jordan Cove LNG facility because of the County's natural gas pipeline that accesses the south end of Williams Grants Pass Lateral pipeline as well as having a deep-water port, skilled labor, and a regional need for natural gas.
Before 8 February 2006, Jordan Cove LNG developers indicated that the gas from their facility would be sent out on the Coos County pipeline and the 5 mile NW Natural gas pipeline (Jordan Cove Energy Project 2005: 4, 8; C1da, C1db, C1e, C1g, C1ia, C1ic, C1k, C2a, C4a, C4d).
In their January 2005 presentation to the Oregon Energy Facilities Siting Council, Jordan Cove LNG developers stated that, if approved, their facility would provide "county pipeline fees" as one of the benefits to Coos County residents (Jordan Cove Energy Project 2005: 42). Jordan Cove's payment of tariffs to use the County pipeline could have helped pay off the taxpayers' bond (C1g, C1ia). In September 2004, The World reported (C1g) (boldface added):
"Coos County could collect nearly $2 million in tariffs annually for the use of its natural gas pipeline under a contract proposed by Energy Projects Development, if the gas is sold outside the Bay Area. But Coos County could end up with nothing in fees for gas that is sold directly within the Coos Bay-North Bend local distribution system. ... Under the stipulations of the preliminary proposal, Evergreen [Energy Projects Development is based in Evergreen, Colorado, C1da] has offered to pay 6.1 cents per 10 therms of gas it transports through the gas lines and guaranteed the county a $250,000 customer charge per year. The customer charge is due regardless of how much gas the company transports from the North Spit to the Interstate-5 corridor - the stated market for the gas - but the volume tariff could only be imposed once the gas leaves NW Natural's local distribution system in the Bay Area and passes across the county line."
In early February 2006, Fort Chicago Energy Partners LP of Canada, Pacific Gas and Electric Company, and Williams Northwest Pipeline announced plans for a 36-inch natural gas pipeline (Pacific Connector Gas Pipeline, Pacific Connector Gas Pipeline 2006a; Figure 1) that would deliver 1 billion cubic feet of natural gas per day from the Jordan Cove LNG facility to the PG&E pipeline near the California border and also, like the Coos County pipeline, to the Williams gas pipeline near Roseburg (Fort Chicago Energy Partners 2006, Jordan Cove Energy Project 2006b, Oregon DEQ 2006, C7, C8a, C8b, C32c).
Before the Pacific Connector Gas Pipeline announcement, Jordan Cove LNG developers said that up to 200-250 million cubic feet of natural gas would be shipped daily through the Coos County pipeline (Jordan Cove Energy Project 2005:7, C1g, C1ia, C2a). After the Pacific Connector Pipeline announcement, approximately only 1 million cubic feet (Port-A11: bottom of p. 3) or 50 million cubic feet (Jordan Cove Energy Project 2006b) are proposed to be sent through the Coos County pipeline, and 1,000 million or 1 billion cubic feet are now projected to go through the proposed Pacific Connector (Jordan Cove Energy Project 2006b).
Jordan Cove's Bob Braddock in March and April 2006 promised that Coos County will have the lowest natural gas prices on the West Coast if the Jordan Cove LNG deal goes through. If so or if Jordan Cove's natural gas is cheaper because it isn't transported long distances like that through the Coos County pipeline, how could natural gas pumped into Coos County in the Coos County pipeline compete? Who would want to pay more to get natural gas brought in by the Coos County pipeline?
Will the taxpayer-funded Coos County pipeline effectively become obsolete as soon as the Pacific Connector Gas Pipeline becomes operational?
Jordan Cove's proposal to pay a $250,000 customer charge for the Coos County pipeline but no tariff unless its gas is piped outside of Coos County would result in Jordan Cove only paying Coos County $250,000 a year (C1g). At that rate it would take 108 years for Jordan Cove to pay Coos County enough revenue to pay the taxpayers' $27 million bond and another 96 years to pay for $24 million of State monies to help pay for construction of the Coos County pipeline (see C1g).
Jordan Cove and Coos County had not negotiated an agreement for the use of the County pipeline before the announcement of the Pacific Connector Gas Pipeline (C7). In August 2006, County Commissioners refused to comment about the Pacific Connector Gas Pipeline (C34):
" 'As a citizen, it's confusing knowing who to talk to,' said Lisa Lagesse. Lagesse was one of four Glasgow residents attending this week's meeting of the Coos County Board of Commissioners to speak against the proposed 223-mile-long, 36-inch-diameter gas pipeline. One of the proposed routes for the pipeline would cut through Glasgow residential properties, which concerns many of the area's property owners. At the meeting's outset, the Glasgow residents were told by Commission Chairman John Griffith that the commissioners were not permitted to take a position on the issue of the pipeline. They could not show bias, Griffith said, because they could be called to rule on pipeline-related issues in the future, 'and if we showed bias now we'd have to deal with cold-blooded lawyers then.' This left the Glasgow residents confused as to whom they should register their disapproval."
Who are the Coos County Commissioners serving?
Are there any elected officials representing the interests of Coos County residents who have to not only deal with taxation for the Coos County pipeline but also now with the construction of a competing pipeline across the land of property owners, who will have to acquiesce or fight taking of their property through Eminent Domain?
Did Port of Coos Bay Commissioners exercise reasonable care and due diligence to discover this easily foreseeable pipeline competition that is a direct consequence of their decisions to sell/lease land for the Jordan Cove LNG terminal? The Port Commissioners had ample time to do so between the Feb. 8, 2006 announcement of the competing pipeline and the June 9, 2006 signing of the title paperwork for the sale of 1,300 acres of Weyerhaeuser land to the Port and the Port receiving a check for $620,000 from Jordan Cove Energy Project to pay for the loan payments for the land purchase and Jordan Cove's lease/sale option for up to 200 acres of the property (see Timetable for Port's LNG Land Deal).
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
Bob Braddock owns a third of Energy Projects Development LLC (Jordan Cove Energy Project 2004:2), which is responsible for the "successful development of the proposed LNG facility" (Fort Chicago 2005). So it seems that he has a vested, self-interest in the successful development of the Jordan Cove LNG facility.
In August 2004, The World reported (C1da) that Braddock had said that the Jordan Cove LNG terminal would not lower the price for natural gas in the Coos Bay area and South Coast Development Council Inc. Director Ron Opitz (who formerly worked for NW Natural gas [C1da, C1db]) also said that the terminal would not impact state natural gas prices.
For the January 2005 information meeting in which Jordan Cove sought approval by the Oregon Energy Facilities Siting Council, Jordan Cove LNG developers indicated that their facility "mitigates natural gas price increases (possibly lowers natural gas prices)" in Oregon and "lowers cost natural gas (opinion)" to Coos County residents (Jordan Cove Energy Project 2005:6, 42). They made no promises for cheaper natural gas.
In March 2006 as Jordan Cove sought public and Federal Energy Regulatory Commission (FERC) approval, The World reported (C8d):
"In the latest move to drum up public support for the proposed liquid natural gas holding facility and pipeline on Coos Bay's North Spit, Bob Braddock, Jordan Cove Energy Project director, promised that Coos County will have the lowest natural gas prices on the entire West Coast if the deal goes through."
In reporting a meeting of about 50 Port of Coos Bay stakeholders in April 2006, The World's Drew Atkins wrote (C11):
"Braddock said he stood by his March 15 public statement that, if the holding facility is built, Coos County will have the lowest natural gas prices on the West Coast."
At a 27 September 2006 public meeting, Jordan Cove's Bob Braddock said (C41c): "The additional supply of gas (this project would bring) would drive down gas prices in the area, because that's what additional supply does."
How can Braddock keep his promise? He is not even the majority owner of Energy Projects Development LLC, which is only a minority owner of Jordan Cove Energy Project (Fort Chicago 2005). Energy Projects Development's responsibility is only to successfully site the LNG facility (Fort Chicago 2005).
Is Braddock's promise legally binding? Where is the contract?
With over $1 billion investment in the LNG facility and pipeline (Table 1) that will need to be paid off, selling natural gas at lower than market values seems dubious. I doubt if the Canadian and Californian investors (e.g., Fort Chicago and PG&E in Pacific Connector 2006a) in the LNG terminal and Pacific Connector pipeline would allow it.
As the Oregon Public Utility Commission (2005) notes (boldface added):
"Natural gas prices in the Northwest have increased steadily over the last couple of years because of increasing demand for natural gas. New pipelines now connect the Northwest to the Midwest region of the United States. This means that Canadian gas that used to serve only the Northwest can now be sent to Midwest markets that are willing and able to pay a higher price. In fact, North America is now considered to be one natural gas market and demand is the primary influence on price. Like any other competitive business, gas suppliers are in business to make money and they sell gas to the highest bidder. This means that wholesale gas prices for the Northwest must increase or suppliers will offer to sell gas to other areas that are willing to pay higher prices."
How can Braddock make good on such a promise that Coos Bay will have the cheapest natural gas on the West Coast? What control does he or Jordan Cove Energy Project have over prices of natural gas on the West Coast served by other pipelines? A new LNG terminal is already half-built in Baja California that is projected to supply California and the West and to outcompete other proposed LNG facilities in California (Polakovic 2006). How can Braddock guarantee that Jordan Cove's natural gas will be cheaper than that supplied by the Baja California LNG terminal?
Other LNG terminals are proposed for Oregon and the West Coast including the Bradwood Landing LNG facility on the Columbia River (e.g., see Bradwood Landing, Oregon Dept. of Energy, and links to proposed and potential sites at FERC LNG) that also could be expected to reduce natural prices to users near their site as much or more than Jordan Cove.
Braddock doesn't even have control over natural gas prices in Western Oregon, if the Port of Coos Bay is correct in stating (Port-A11: top of p. 3)(PUC link added):
"All natural gas consumers in Oregon -- residential, business and industrial -- will benefit from the availability of an additional source of gas for the state. Oregon does not have in-state natural gas resources to meet natural gas-driven energy demand, consequently natural gas consumed in Oregon moves via the Williams Northwest Pipeline system from the northeast British Columbia/northwest Alberta production basin and from gas fields in Wyoming and other Rocky Mountain states. The availability of a significant volume of natural gas from an in-state source should help moderate price fluctuations for all gas users, especially in an increasing demand, tighter supply commodity market."However it must be recognized that in Oregon, the Public Utility Commission (PUC) regulates rates and services for residential users and businesses served by investor-owned electric, natural gas and telephone utilities, and a limited number of water companies. The PUC does not regulate people's utility districts, cooperatives or municipally-owned utilities, except in regards to safety issues.
"Since the majority of natural gas customers in Oregon are served by PUC-regulated utility firms, residential and business customer rates will be set by the actions of the PUC as utility firms present proposed rates to the commission for approval/disapproval in rate hearings and then on for eventual adoption and implementation. It should be noted that the PUC bases its approval or disapproval of a proposed rate on the commodity cost, and while increased natural gas availability may not decrease gas prices, that availability could affect future rate increases.
"Industrial natural gas users in the southwest Oregon region and possibly other parts of the state will have the ability to negotiate lower gas prices since their much larger volume purchases of gas are not regulated by the PUC. Industrial users will have the added benefit of lower pipeline transportation costs for long-term gas purchases since the source will be in Oregon."
The Port clearly is not claiming that the Jordan Cove LNG will even lower natural gas prices for Coos County residential and business owners, let alone result in the cheapest prices on the West Coast.
It seems doubtful that Braddock can make good on his promise or that he can be held liable if his promise is not fulfilled. Is his promise only like that of a politician running for office that promises more than can be realistically delivered, except that Braddock is seeking approval for the Jordan Cove LNG facility? If Braddock's promise isn't realistic, how about his other statements that he did not even promise? The Port of Coos Bay has received much of its LNG information from Bob Braddock.
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When Port of Coos Bay officials were confronted with citizens upset about the Commission's already concluded land deal for the Jordan Cove LNG facility during the Port Commission's 15 June 2006 meeting, Port Executive Director Jeffrey Bishop was noted in the Commission's Minutes (Port-A9: Item 6A) as indicating (boldface added):
Just as a point of information, the LNG project was originally proposed to be built on Roseburg property for which they had engaged and entered into a contract with Roseburg and still have that contract in place. The berth that they would have been using would have been parallel with the existing Roseburg ship terminal. The Port's involvement in this deal does not bring LNG to the community; LNG was already proposed and has been proposed for over two years.
At the Port Commission's 20 July 2006 meeting when more citizens came to discuss the LNG facility, the Port's Executive Director Jeffrey Bishop stated that the Commission's deal with the Jordan Cove LNG developers did not affect the plans for the LNG facility. The Commission's Minutes state about Bishop's presentation to the Commissioners (Port-A10: Item 4A):
"So the Port's involvement
1) did not enlarge the project;
2) did not enable the project; or
3) did not insure the project.
It simply moved the project. What the community gets out of it is some control; a larger portfolio; and the opportunity to leverage that development and... [ellipsis is from the Minutes] we have a seat at the table. We can use that to influence."
Mr. Bishop's assertions at these meetings that the Port did not bring the LNG project to Coos Bay or enable or enlarge the LNG project are questionable.
State Port's Enabling of LNG Terminal
Evidence that the State Port enabled the Jordan Cove LNG project:
"When I first came and chatted with the port, I said 'If you don't think this makes sense we will turn around and leave now.' " He said he got his answer when the port decided to go along with the project."
"The local project received the enthusiastic support of the Oregon International Port of Coos Bay, which has worked with the SCDC [South Coast Development Council] behind the scenes to bring the development to its current state and stands to gain two ships per month if the project succeeds."
Jeffrey Bishop started work with the Port as General Manager on 5 January 2005 (C1la). So the Port Commission approved a LNG terminal before he arrived.
"Parcel C - Roseburg Forest Products Co. Site - The Roseburg Forest Products Co. site was pursued when the JCEP was contemplating a smaller output, single tank LNG terminal project. When the JCEP was expanded in size to include two, 160,000 m3 [cubic meters] full containment LNG storage tanks, the Roseburg site no longer had sufficient real estate to accommodate the facilities while maintaining thermal and vapor exclusion zones within the site property."
Jordan Cove Energy Project noted that the increased tank capacity was essential to have a viable LNG facility, since Jordan Cove Energy Project's (2006f: p. 10-18 [PDF p. 25]) filing to FERC further states:
"Preliminary shipping and storage studies were then conducted and the results indicated that it would be necessary to have more than one LNG storage tank in order to avoid stock outages and demurrage of inbound LNG cargoes. The results of the shipping and storage study that was used to establish the quantity of storage required for JCEP indicated that a total of 320,000 m3 [cubic meters] of active storage would be required to support efficient movement of LNG ships concurrently with the avoidance of stock outages, given the commercial design output capacity of the terminal."
In their official filing to FERC, Jordan Cove Energy Project also states that the former Weyerhaeuser property acquired by the Port Commission was the only viable site for their LNG facility (Jordan Cove Energy Project's (2006f: p. 10-17 [PDF p. 24])) (boldface added):
"Parcel D - Weyerhaeuser Company Site, Henderson Ranch - The Henderson Ranch site located immediately to the west of the Roseburg Forest Products Co. site was always viewed as the preferred location due to its size, distance from nearest residence (over 1.1 miles) and topography. ... As a result of the evaluation of all of these sites, the Weyerhaeuser Henderson Ranch property was determined to be the only suitable site in Coos Bay (Figure 10.3-6)."
"Braddock said the proposed LNG terminal for the North Spit is in competition with two others proposed for the Columbia River. 'In my own personal opinion, there is only going to be one LNG terminal built in the Northwest,' Braddock said. 'If it's not us, it's them. If it's them--it's not us.' "
One of the proposed LNG facilities on the Columbia River is Bradwood Landing by Northern Star Natural Gas (e.g., which of the five proposed LNG terminals in Oregon is the farthest along in the permitting process [Oregon Dept. of Energy]). Bradwood Landing filed its Resource Report 10 to FERC in June 2006, ahead of the Draft Jordan Cove Energy Project's Report 10 in September 2006 (Bradwood Landing 2006, Jordan Cove Energy Project 2006f). The purpose of Resource Report 10 is to indicate if there are alternatives to the project proposed, and it is clear from their reports that Bradwood Landing and Jordan Cove Energy Project each believes that the other site is unsuitable and that its project should be the one certified by FERC (Bradwood Landing 2006, Jordan Cove Energy Project 2006f). For example, Bradwood Landing dismissed the suitability of the Jordan Cove Energy Project (Bradwood Landing 2006:16):
"The proposed Jordan Cove LNG Project site in Coos Bay, Oregon, was among the sites considered. This site was rejected because Coos Bay is not sufficient in size to accommodate LNG carriers, which are generally 100,000-200,000 cubic meters. Future LNG carriers are likely to be larger, and by limiting the ability of the terminal to receive LNG cargos from larger carriers, the Coos Bay location would not only constrain vessel capacity, but may also limit the deliverability from the facility. It would likely increase the cost of LNG delivered to the Pacific Northwest because smaller purpose-built (and hence more expensive on a per million Btu basis) LNG carriers would be required to transport the LNG."
The Jordan Cove LNG facility before the Port Commission's land deal with Jordan Cove was too small to compete with Bradwood Landing as Jordan Cove was slated to produce up to 200-250 million cubic feet daily (Table 2), but Bradwood Landing is proposed to have a peak capacity of 1.3 billion cubic feet per day (Bradwood Landing 2006:1). Further, Jordan Cove's pre-Port deal LNG facility was (Jordan Cove Energy Project 2004:3):
"designed to accommodate LNG vessels with cargo capabilities of 70,000 up to approximately 140,000 cubic meters, although it is anticipated that vessels of less than 100,000 cubic meters in size will be utilized."
"As to financing, the port would apply for and pay for all permits for construction of the LNG facility and docking terminal. It would obtain and award bids for construction work. The agency would have to consult with Jordan Cove and would invoice costs to the company, the agreement says."
"Yes. The port, as a public entity, has access to lower loan rates, as much as 2 points lower than Jordan Cove could achieve, Bishop said. Jordan Cove, in turn, would pay off those loans for its portion of the LNG storage area and docking facility. It is making a monthly payment to cover all loan and fee charges."
State Port's Land Deal and Support Greatly Enlarged LNG Project
It is very clear that the size of the LNG facility was significantly enlarged after the Port's land deal with the Jordan Cove LNG developers in terms of money invested (from $150 to $500+ million), acreage (from 93 to 173 acres), LNG ships per month (from 2 to about 6-7 per month), and daily production of regassified natural gas (from 200-250 million cubic feet to 1,000 million cubic feet) (Table 2).
Before the Port Commission's deal, Jordan Cove's Bob Braddock and others indicated that their LNG terminal would be the smallest in the United States (C1da, C1f, C1g, C1ia, C1ic, C7). After the Port's deal, Jordan Cove would have about twice the design capacity as the LNG terminals in 2001 near Boston, Massachusetts and Savannah, Georgia (U.S. Energy Information Agency 2001).
Before the Commission's deal, up to 200-250 million cubic feet of natural gas regassified daily at the LNG terminal would have been sent out over the already constructed 12-inch Coos County/NW Natural gas pipeline (Jordan Cove Energy Project 2005:4, 7-8; C1da, C1e, C1g, C1ia, C1ic, C2a, C4a, C4d). The 12-inch pipeline limits the amount of natural gas that can be shipped, and "An LNG terminal project cannot file an application unless it has a pipeline outlet to carry the gas away from the terminal" (C8b). After the Commission's deal in October 2006 that greatly increased the acreage available for the LNG facility (Table 2), the size of the LNG facility could grow and attract investors for a new, larger pipeline. And it did. In February 2006, the 36-inch, $750-850 million Pacific Connector Gas Pipeline was announced that was proposed to transport 1 billion cubic feet of natural gas daily from the Jordan Cove LNG facility (Figure 1, Fort Chicago Energy Partners 2006, Jordan Cove Energy Project 2006b, Oregon DEQ 2006, C7, C8a, C8b, C32c).
Summary of How The State Port Commission's Land Deal With Jordan Cove Energy Project Enabled and Enlarged the LNG Terminal Proposal
Jordan Cove Energy Project's official filing with FERC and other evidence show clearly that Jordan Cove required a better site than they had before the Commission's deal to sell/lease up to 200 acres to Jordan Cove. Thus, it appears that the Port Commission's deal not only allowed the LNG project to enlarge but also greatly enabled the LNG project to proceed because it
In August 2006, the Port stated that if the Port had not made the deal that Jordan Cove LNG developers could have purchased the land directly from Weyerhaeuser (Port-A12b, C36). If so, why didn't the Jordan Cove LNG developers do so in the first place? They had the opportunity to do so, and the $25 million Weyerhaeuser land purchase price is minimal compared to the over $500 million that Jordan Cove Energy Project L.P. now proposes to invest in the property (Jordan Cove Energy Project 2006d).
Could it be that the original Jordan Cove LNG plan was too small to attract the necessary investments and only after the Commission's deal with Jordan Cove that it became a potentially successful venture worth the $500 million investment of Fort Chicago Energy Partners for the LNG facility and the $750-850 million for the associated Pacific Connector Gas Pipeline with both projects depending upon each other?
The Port's explanations appear to be excuses to cover up the Commission's significant role in making the Jordan Cove Energy Project LNG terminal more possible.
|
Table 2. Size of LNG
facility before and after the State Port of Coos Bay's deal with Jordan Cove Energy
Project L.P. in October 2005. |
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|
Before Port Deal |
After Port Deal |
Reference |
|
Investment in LNG
Facility |
$150-200 million |
$500+ million |
a |
|
Acreage for LNG
Facility |
93 acres |
173 acres |
b |
|
LNG Ships to LNG
Terminal |
about 2/month |
6-7/month (depending on LNG ship size) |
c |
|
Daily Production of Natural Gas (Regassification) |
200-250 million cubic feet |
1,000 million cubic feet |
d |
|
|
|||
| Reference a.
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Reference b.
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Reference c.
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Reference d.
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[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
Former state legislators becoming paid lobbyists is a controversial issue throughout the United States (Center for Public Integrity 2007).
Ken Messerle served in the Oregon House during two terms that began in 1996 (Messerle 2003). In 1999, he was one of two sponsors of House Bill 2832 that authorized the Oregon Economic Development Department to make a $20 million dollar grant from the sale of lottery bonds to help finance the Coos County natural gas pipeline to "enable Coos County to attract significant industries to locate in the area" (Oregon Legislature 1999a, 1999b).
In 2000, he was elected to the Oregon Senate (Messerle 2003). In 2003, he was a sponsor with Representatives Wayne Krieger and Joanne Verger of Senate Bill 0321 to allow the Oregon Public Utility Commission to authorize Coos County to construct their natural gas pipeline (Oregon Legislature 2003, Oregon Rural Electric Cooperative 2003).
On 10 August 2004, Jordan Cove's Bob Braddock met with State Senator Ken Messerle, State Representatives Joanne Verger and Wayne Krieger, Coos Bay Mayor Joe Benetti and City Manager Scott McClure, North Bend Mayor Rick Wetherell and City Manager Jan Willis, and Bandon Mayor Joe Whitsett (Jordan Cove Energy Project 2006e:Table 1.8-2).
Messerle chose to not run for re-election in 2004 (Messerle 2003), and Rep. Joanne Verger won the election. He served in the Oregon Senate until January 2005, when Verger succeeded him.
In April 2005, Messerle's Coast Consulting and Services LLC became a lobbyist for the Port of Coos Bay (Port-A13). The Port said "This was to provide governmental relations support for the Port projects at the State level" (Port-A13). In 2005, Messerle was also an Oregon-registered lobbyist for the Coquille Indian Tribe, Coos County Airport District, and Bandon Dunes LLP (Center for Public Integrity 2006).
In October 2005, the Port Commission approved signing a Letter of Intent with Weyerhaeuser to purchase 1,300 acres of land on the North Spit and the option with Jordan Cove Energy Project L.P. for up to 200 of the 1,300 acres (Port-A1c, C4f). The Port also announced that it was negotiating with the State of Oregon to borrow $15 million and with Umpqua Bank to borrow $10 million to pay for the $25 million Weyerhaeuser property (Port-A1c, C4e). It is not stated if Messerle helped in negotiations with the State for the loan before and/or after October 2005.
In 2006, Messerle was a lobbyist for the Port of Coos Bay, Coquille Indian Tribe, Coos County Airport District, Central Oregon & Pacific Railroad, and Southwestern Oregon Community College (C50).
According to Minutes of the December 2006 Port Commission meeting, the Port "updated" their agreement with Messerle in March 2006 (Port-A13), but such an update is not included in searching for "Messerle" or "Coast Consulting" in the Minutes of the Port's February or March 2006 meetings (Port-A3, Port-A5).
On 11 July 2006, the Federal Energy Regulatory Commission and U.S. Coast Guard held a public meeting to take testimony about the proposed Jordan Cove LNG facility and Pacific Connector Gas Pipeline (Federal Energy Regulatory Commission and Coast Guard 2006, C24a, C27). The first to testify in favor of the Jordan Cove LNG terminal was Ken Messerle (C27). He identified himself as an individual and former State Senator (Messerle 2006), not as a lobbyist. Like Port Commission President David Kronsteiner testified later at this hearing (Kronsteiner 2006), Messerle testified in favor of the LNG terminal and that the pipeline should avoid residential area (Messerle 2006).
During the Port Commission's December 2006 meeting, the Port voted to raise Messerle's (Coast Consulting and Services LLC) monthly retainer from $1,000 to $2,000 per month (Port-A13, C49, C50). The Minutes of the Port's meeting indicate that this was justified because (Port-A13):
"Considering the North Spit Development Projects the Port is working on, it is anticipated there will be a large increase in the Coast Consulting work load during the 2007 Legislative Session. Funds are available in the current budget and this adjustment would become effective January 1, 2007."
The most important North Spit Development Project involves the Port's land deal with Jordan Cove LNG developers because the Weyerhaeuser land purchase depends upon it (Port-A1c, Port-A6: Item E, Port-A9: Item 6A, B15, C4f, C5, C13, C19), and Jordan Cove's payments will allow the Port to construct a modern cargo dock to entice other industries (see Gateway Project).
The World's Elise Hamner wrote about this Port Commission meeting (C50):
"Messerle wrote in a letter to the commission that the pay increase would bring his retainer in line with what he's already being paid by the Coquille Indian Tribe, Central Oregon & Pacific Railroad, Coos County Airport District and Southwestern Oregon Community College. Messerle was in the audience but didn't speak before the commission."
If the Port's $2,000/month is "in line" with what he is being paid by the other four clients, five clients at $2,000 per month would be $10,000 per month. Even just the Port's $2,000 per month would be considerably better than the $1,487 per month he would receive as an Oregon Legislator (Oregon Legislature 2007).
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The Oregon Economic and Community Development Department (OECDD) is a department in the State of Oregon. It appears that the OECDD has been involved with development projects by Oregon ports with little or no consultation with other state agencies or public involvement in the decision-making process of whether a particular development should be approved or not. Below, three such Projects (two of which are at Coos Bay) are examined. Has the OECDD acted with reasonable care or practiced due diligence in these proposals?
In October 2006, a fourth project, secret Project April, about container shipping at Coos Bay has surfaced (see Gateway). I do not know if the OECDD is involved in Project April.
Former State Senator Ken Messerle began lobbying for the Port of Coos Bay in April 2005 (see Messerle). I do not know if his lobbying has influenced the State of Oregon's grants and loans to the Port of Coos Bay.
"Project Phoenix" is the Port of Coos Bay's plan to purchase all industrial properties on the North Spit of Coos Bay (C4e).
Chris Claflin of the OECDD met with Jordan Cove's Bob Braddock on 17 December 2003 (Jordan Cove Energy Project 2006e:Table 1.8-2). In at least 2006, Claflin was also a South Coast Development Council Inc. (SCDC) board member representing the State of Oregon (http://www.scdcinc.org/about.htm). The SCDC was working in 2003 to attract the Jordan Cove LNG developers to Coos Bay (see Timetable for Port's LNG Land Deal).
In October 2005, the Port of Coos Bay signed a Letter of Intent for the purchase of 1,300 acres of Weyerhaeuser land on the North Spit, which was part of "Project Phoenix" (Port-A6: Item E). The OECDD provided a loan for $15 million of the $25 million price for this land purchase deal for which the successful siting of the Jordan Cove LNG terminal is an essential part, according to the Port of Coos Bay (Port-A1c, Port-A6, Port-A8). Without the OECDD loan the deal would not have gone through, so the OECDD loan gave tacit State approval to the Jordan Cove LNG terminal.
How can Governor Kulongoski or other State agencies (e.g., see C3b, C3c, C4a) protest the Jordan Cove LNG plan without it appearing that State of Oregon government is in serious disarray or is incompetent because a department of the State provided the money that made the LNG terminal possible? The Oregon Department of Energy and Department of Environmental Quality have some regulatory responsibilities in the siting or monitoring the LNG facility (Oregon Department of Energy [2006], Oregon DEQ 2006), but will they be limited by OECDD's making the LNG facility possible?
In enabling the Jordan Cove LNG deal, the OECDD may be acting in accordance with Oregon Revised Statute 777.065 at ORS Chapter 777 (boldface added):
"Development of port facilities at certain ports as state economic goal; state agencies to assist ports. The Legislative Assembly recognizes that assistance and encouragement of enhanced world trade opportunities are an important function of the state, and that development of new and expanded overseas markets for commodities exported from the ports of this state has great potential for diversifying and improving the economic base of the state. Therefore, development and improvement of port facilities suitable for use in world maritime trade at the Ports of Umatilla, Morrow, Arlington, The Dalles, Hood River and Cascade Locks and the development of deepwater port facilities at Astoria, Coos Bay, Newport, Portland and St. Helens is declared to be a state economic goal of high priority. All agencies of the State of Oregon are directed to assist in promptly achieving the creation of such facilities by processing applications for necessary permits in an expeditious manner and by assisting the ports involved with available financial assistance or services when necessary. [1981 c.879 §6; 1993 c.106 §1]"
However, did the OECDD consult the Governor or other State agencies about the consequences of the OECDD loan to enable a LNG terminal without State oversight or public involvement/community consensus? Did OECDD staff act with reasonable care and due diligence?
As of April 2005, the OECDD had recruited Tokuyama to Coos Bay and provided grants to the Port of Coos Bay for "Project TK." The OECDD did this though there are environmental and aesthetic concerns about Project TK that were revealed by The Oregonian's investigative reporting (C22c). The OECDD did not comment about Project TK because of confidentiality agreements (C22c). The Port refused to release "the firm's name or area of industry, saying all that information was 'proprietary' [C2b]." Without such basic information from the OECDD and the Port, how can Coos Bay area residents be informed or provide meaningful input into the decision to approve a deal with Tokuyama or not?
During August-December 2005, the OECDD acted in Project Glory without consulting other state agencies, without concern for local citizens in the Newport area, and without considering environmental consequences. Excerpts from an investigative report by The Oregonian's Peter Sleeth (2006, State Job Chase Hit Unseen Rocks. In Their Zeal to Recruit a Ship-breaking Firm, Oregon Officials Failed to Anticipate a Public Environmental Outcry, Jan. 29) reveal (boldface added):
"It was nicknamed 'Project Glory' by state economic development [OECDD] officials, a plan to bring as many as 125 much-needed industrial jobs to the Oregon Coast with an aggressive sales campaign and financial offers of $200,000 or more to the out-of-state company. But Oregon's [OECDD] recruiters were taken aback by an onslaught of public challenges over apparently unexamined environmental issues posed by the project, documents obtained by The Oregonian show. A series of e-mails gained under a public-records request shows state officials had negotiated for months to bring a ship-breaking company to Newport's Yaquina Bay only to have the project start to crumble after the first public meeting.
...
"Mike Salsgiver, acting director of the Oregon Economic and Community Development Department, said his agency was surprised by concerns over invasive marine species attached to the hulls of ships that would be towed to Oregon for salvage. But he maintained that gauging public opinion is not part of the state's job when it recruits a company for a particular location. Rather, that is the job of local governments -- and opposition arose in public meetings as it should have.
...
"A mission of the Oregon Economic and Community Development Department is to bring in new jobs. Last fall [2005], department officials working with the governor's office began showing Bay Bridge potential sites. From August through November, they negotiated with Bay Bridge and by October had whittled the sites down to one in Astoria and one in Newport. By November, however, Newport was the leading candidate, with a site that the Port of Newport had available.
"State officials hoped that during the regular Port meeting of Nov. 22 the Port would sign a letter of intent with Bay Bridge to do business. The Port had just announced the possibility of bringing Bay Bridge to Newport five days earlier. But the furor that erupted from that first public hearing began to unravel such plans.
"During a Nov. 22 public meeting in Newport, vocal opponents unexpectedly took control of the meeting, said one e-mail from Bob Warren, an official with the Oregon Economic and Community Development Department. The e-mail was dated Nov. 23 and addressed to several people, including Salsgiver. 'The Port commissioners totally lost control of the meeting, and it turned into a free-for-all,' Warren wrote. 'And it went on and on and on. The client heard and saw virtually no local support . . . Port Manager Don Mann tells me he still thinks the project is doable. I have my doubts based on what I saw and heard last night.'
"Salsgiver said last week that the public opposition came out in an appropriate forum and that despite his department's work in recruiting the company, public opposition was not his department's to gauge. 'This is a very typical process that gained a degree of opposition that even caught local officials by surprise,' he said. 'The local temperature-taking is frankly up to them.'
...
"While state officials were aware of most environmental risks, no one, it appears from the e-mail record, had researched the risk from exotic marine species. After a second public hearing Dec. 6, Warren again sent an e-mail to colleagues, stating that scientists from Oregon State University's Hatfield Marine Science Center had spoken of the threat of invasive species. Still, Warren wrote that it was urgent an agreement be signed that night at a second meeting. 'Tonight is another public meeting as well as a decision point for the Port. The Port will vote to sign a letter of intent with Bay Bridge to move ahead with the project. If they do not vote to approve tonight, Newport will be out of the game,' Warren wrote. Newport signed no letter of intent that night. A spokeswoman for the economic development department [OECDD] said her agency was not responsible for the invasive-species issue. Rather, she said, the state Department of Environmental Quality had that responsibility. But Mike Wolf, an economic revitalization representative with the DEQ, said that it was not his department's regulatory responsibility to deal with invasive species. His agency did not research the issue for the economic development department [OECDD]. The DEQ, he said, did not even hear of the issue until a public outcry in December over invasive species.
...
"By Dec. 14, Warren was urging the Port of Newport to get an active publicity campaign going to counter negative publicity about the project. At that time, Bay Bridge was still considering Newport, while looking at other sites on the coast and in Portland. 'We are getting blindsided on this, and we need to do something about it,' Warren wrote. The next day, more than three weeks after the public announcement of the project, Warren, in an e-mail copied to a member of Kulongoski's staff, wrote that he had talked with another staff member in the governor's office about invasive species. 'She indicated that the only real concern on Bay Bridge with regard to environmental issues is the invasive-species issue,' he wrote. 'A proactive approach to this issue is essential.' "
At about the same time the OECDD was pushing Project Glory onto the Port of Newport, the OECDD was also working with the Port of Coos Bay on Project Phoenix. I do not know if the OECDD pushed the appointed Port of Coos Bay Commissioners as hard as the OECDD pushed the elected Port of Newport Commissioners, but the appointed Coos Bay Commissioners signed a Letter of Intent in October 2005 for the Weyerhaeuser and Jordan Cove Energy Partners land deal without any public notification or public involvement. The elected Newport Commissioners did not succumb to OECDD pressure. Because the Port of Coos Bay is a state port and the Commissioners were appointed by the Governor, the Commissioners may feel they can disregard Port of Coos Bay constituents.
Is the OECDD an out-of-control state agency that is not being closely monitored by elected officials? Is the OECDD working at cross-purposes and with no communication with other state agencies and with no regard for citizens in its Projects like it did for at least Project Phoenix and Project Glory?
Is the OECDD now working to fund some Project to bring shipbreaking to Coos Bay or elsewhere like it tried for Project Glory?
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Port Commission Minutes indicate that Executive Director Jeffrey Bishop stated at the Commission's June 2006 meeting that a public vote was not necessary for the Port's Memorandum of Agreement with the Jordan Cove LNG terminal because "The agreement would require that the capital investment and the services and ongoing maintenance of the facility would be paid for through a series of fees," not taxes (Port-A9: Item 6A).
Nevertheless, it appears that taxpayers have helped or will help pay for the proposed Jordan Cove LNG terminal project in other ways:
For example, Port Executive Director Jeffrey Bishop told The World (C33b) that:
"As to financing, the port would apply for and pay for all permits for construction of the LNG facility and docking terminal. It would obtain and award bids for construction work. The agency would have to consult with Jordan Cove and would invoice costs to the company, the agreement says."and in response to the question "Would the port obtain all capital or loans for the projects?" Bishop replied:
"Yes. The port, as a public entity, has access to lower loan rates, as much as 2 points lower than Jordan Cove could achieve, Bishop said. Jordan Cove, in turn, would pay off those loans for its portion of the LNG storage area and docking facility. It is making a monthly payment to cover all loan and fee charges."
Is Jordan Cove paying for Port staff time to do this?
Former State Senator Ken Messerle became a lobbyist for the Port of Coos Bay in April 2005 and identified himself as an individual at the 11 July 2006 FERC and U.S. Coast Guard hearing, where he was the first to speak in favor of the Jordan Cove LNG terminal (see Messerle). He may have helped the Port get the State loan needed for the Weyerhaeuser and Jordan Cove LNG land deal (see Messerle). What is the source of Port funds to pay for Messerle's consulting? The Port's General Fund that includes taxes?
In addition, contracts for financial arrangements between the Port and Jordan Cove for infrastructure costs such as dredging a turning basin for LNG tankers, maintenance dredging of the channel for tankers, and special tug operation have not been signed (Port-A11, C33b). So it is not clear if local, state, or federal funds will be used to facilitate the Jordan Cove LNG terminal operation.
Although it does not appear that it was legally necessary to include taxpayers in the process of the Port Commission's making a decision about their deal with Jordan Cove Energy Project, it does not seem very prudent to have excluded taxpayers because Port District or State taxpayers contribute money to the Port of Coos Bay. Further, by including the Port District taxpayers in the decision-making process, it also would have truly made this a Port of Coos Bay project rather than a Port Commission/staff project.
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This section is not a comprehensive compilation of citizen involvement. It only serves to show that citizens have tried to provide input about the proposed Jordan Cove LNG terminal since it was first publicly announced in late August 2004 (C1da, C1db). On 14 September 2004, The World reported (C1e):
"Coos County Citizens for Representative Government, created nearly two years ago to by a diverse group of residents who wanted to bird dog county government, has turned its focus on a proposed $150 million LNG import terminal being considered for Jordan Cove. Member Richard Knablin said the group will begin hosting a series of public forums in November and hopes to attract experts to discuss how other communities have addressed LNG proposals." 'The history here has been that jobs at any price prevails and all these plans, from Nucor to (Daishowa Paper Products), they never involve citizen involvement,' Knablin said. 'All they do is go to the same people - the South Coast Development Council, Friends of New and Sustainable Industry - and here they are making decisions for everyone. We want to represent independent citizens.' ... CCCRG already has uploaded LNG links and information on its Web site at www.cccrg.com [this web site is no longer active]."
In late September 2004, about a dozen members of CCCRG met with Jordan Cove LNG developer Bob Braddock (C1ha), and Jody McCaffree also spoke in opposition to the LNG terminal during Braddock's presentation to the North Bend City Council (C1hb). The World reported about McCaffree's input to the Council meeting (C1hb):
" 'It's not right to have non-elected people decide these things when we taxpayers are paying for this, ' McCaffree politely but firmly told Braddock. 'I think this is all being done without any public input.' "
An incomplete list of some other ways that citizens or citizen groups concerned about the Jordan Cove LNG terminal and Pacific Connector pipeline have been involved:
But local citizen opposition has also waxed and waned. In early February 2006, The World reported (C6b),
"The North Bend resident [Monica Schreiber] characterizes herself as a concerned citizen, but also a spokeswoman for Coos County Citizens for Representative Government. The group went to work early on when Colorado investors announced they wanted to build a $150 million natural gas terminal on the North Spit. From day one, CCCRG's concerns have been community safety and accountability. That hasn't changed, Schreiber said. The group has lost some steam in recent months in its efforts to interest people on learning more about the potential angers of a natural gas facility. 'The community just didn't want to pick up on it,' she said.
...
"The Coos County group has not spoken out in opposition to the LNG facility. Schreiber said it represents residents with varying viewpoints from those in opposition to those who are undecided. Overall, she said, they are united in believing there needs to be a lot more information released to the community."
After the February 2006 Pacific Connector Gas Pipeline announcement (C7, C8a), it seems that opposition increased because many more people would be impacted as they would be along the new pipeline route (see Figure 1).
Local citizens or groups may have been more effective in communicating with the news media and local and state governmental officials by using better communication, such as press releases (see Tools for Citizens To Express Their Opinions).
Pro-LNG and pro-pipeline interests have much more effectively communicated their side. On 3 December 2006, the Register-Guard's Winston Ross (C48a) reports that Energy Projects Development has already spent $10 million for the LNG terminal project and Williams $15 million for the proposed pipeline. Over $1 billion is projected to be spent on these projects (Table 1), so energy companies have a large stake in winning approval of their projects. They have public relations staff and put out effective press releases (e.g., Fort Chicago Energy Partners 2005, Fort Chicago Energy Partners 2006, C7, C8b) and the savvy to only give information to the news media that will favor or not hurt their side. Their control of information given to news media was revealed by The World's Drew Atkins (C31):
"Michele Swan, communications director of Williams Northwest, said that she would not provide detailed information on any pipeline routes to the media unless she could approve of the story's 'angle.' 'When you figure out exactly what you want to write, then we'll talk,' said Swan. When
Swan was asked to provide the number of property owners in the county who had been sent requests for surveying permission, Swan said, 'I don't want to.' "
Jody McCaffree and others in Coos County opposed to the terminal and pipeline do not have the resources to match the energy companies. The Register-Guard states (C48a):
"McCaffree and her supporters are writing letters and e-mails in the hopes of making it just hard enough that the project's proponents will get frustrated and give up. But, without the money to pay lawyers to fight the siting and the pipeline route in court, they know they're gnats against the elephant of tens of millions of dollars the energy companies have to spend on the project."
The target destination for natural gas from the Jordan Cove LNG terminal is California (see Target Market), and the Register-Guard reports about Coos County residents opposed to the terminal (C48a):
"If the gas is for Californians, they ask, why shouldn't the terminal be built there? It's not being built there, McCaffree said, because California and California cities where recent terminals have been proposed spent millions of dollars on lawyers to fight them in court. That's an unlikely prospect in blue-collar Coos County, which watched 4,000 manufacturing jobs depart in the past 30 years and where annual wages today are at least $9,000 below the statewide average."
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The Coos Bay newspaper, The World, is not the only news medium in Coos County. Other news media include KCBY-TV Channel 11 (http://www.kcby.com/), Koos News (http://www.koosnews.com/), radio stations (http://en.wikipedia.org/wiki/Coos_Bay,_Oregon#Radio), and perhaps other news media.
Below, I examine coverage of The World and KCBY-TV because these news media may reach the most people.
The South Coast Development Council Inc. (SCDC) was instrumental in attracting the Jordan Cove LNG developers (see Timetable for Port's LNG Land Deal). I do not know if The World's president and publisher Greg Stevens' board membership in the SCDC (http://www.theworldlink.com/staff_directory/, http://www.scdcinc.org/about.htm) is a factor in why The World has not done investigative reporting about the proposed LNG facility and associated Pacific Connector Gas Pipeline or has favorably announced the SCDC commissioned report supporting the Jordan Cove LNG facility (see CB-SCDC.htm).
There appear to have been efforts to influence The World's coverage of the LNG and pipeline issues. Some efforts have not been subtle. For example, The World's Drew Atkins wrote in July 2006 about the proposed new pipeline from the Jordan Cove LNG facility to near the California border (C31):
"Michele Swan, communications director of Williams Northwest, said that she would not provide detailed information on any pipeline routes to the media unless she could approve of the story's 'angle.' 'When you figure out exactly what you want to write, then we'll talk,' said Swan. When
Swan was asked to provide the number of property owners in the county who had been sent requests for surveying permission, Swan said, 'I don't want to.' "
The World sometimes seem to have reported only what it has been told. For example, it reported the major findings of the ECONorthwest economic "white paper" commissioned by the pro-LNG South Coast Development Council Inc. (SCDC, http://www.scdcinc.org/), without indicating that the SCDC is pro-LNG and without closely examining the findings (CB-SCDC.htm). The World also has twice reported Braddock's promise that Coos County would have the cheapest natural gas in the West, if the Jordan Cove LNG facility was approved, without reporting if this promise was realistic (see Braddock's Promise). The World's reporting of the 6 December 2006 LNG demonstration paid for by Jordan Cove Energy Project and co-hosted by the Port of Coos Bay served pro-LNG interests but was not balanced.
In March 2005, The World editorialized about the Port Commission's lack of public involvement in its decisions to raise the pay for Port managers (C1n). But since the summer of 2005, The World, in my opinion, has written about the Port of Coos Bay too unquestioningly. The World has editorialized about including the public in making decisions (B1, B34), yet has remained silent since October 2005 about the Port Commission's lack of including the public in the decision-making process for the Commission's land deal for the Jordan Cove LNG project.
In an October 2006 editorial (C41d), The World dwelled on the decorum of the first balanced, informational meeting about the Jordan Cove LNG facility and the Pacific Connector Gas Pipeline the week before rather than why it took local residents to organize and moderate it because the Port had failed to do so. It seems that The World's editorials about the importance of local governments involving citizens throughout the decision-making process (B1, B34) may be designed to win prizes for being so civic rather than pointing out the failure of the Port of including or even of informing citizens with balanced information.
The World was also silent about Port Commission Vice-President McKeown's statement that it was appropriate for the Commission to deliberate on land deals until the "deal's done" (see Oregon Policy).
The World has edited at least one Letter to the Editor so that the Port's too short, two-day notice in The World for a shipbreaking forum was not even mentioned (B12).
The World's choice of words has even changed to reflect Port language. Prior to 16 February 2006, The World used a variety of terms to discuss shipbreaking and rarely used "recycling" (see Euphemistic Use of "Ship Recycling"). However, in reporting the Port's February 16 statement about an interest in "ship recycling" (Port-A2b, Port-A3), The World's Elise Hamner also used "ship recycling" almost exclusively (B2; see Euphemistic Use of "Ship Recycling").
Has The World knowingly or unwittingly become a public relations agent for the Port of Coos Bay and the Jordan Cove LNG terminal?
KCBY-TV's broadcast stories are not available for analysis, but some of their stories are available at their web site.
In my opinion, KCBY-TV reporters have reported what they have been shown or told and not done any investigative journalism. KCBY-TV reported the benefits projected by the ECONorthwest report commissioned by the pro-LNG South Coast Development Council Inc. without any analyses that the projections may have been over-optimistic (CB-SCDC.htm).
KCBY-TV also reported a LNG demonstration that was designed to "allay fears" as stated in their story title (C48c) but failed to note that the demonstration was paid for by Jordan Cove Energy Project and was by invitation only. KCBY-TV also did not do any investigative reporting to do a balanced report about LNG spill risks (see LNG Demonstration).
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
The Port's handling of "Project TK" also shows that the Port Commission may try to make a deal before including meaningful public input.
The Port named Project TK in January 2005, and TK's officials visited the Port in February 2005 (C22b). The Oregon Economic and Community Development Department (OECDD) had recruited Project TK to Coos Bay (Port-A2a: Item 6C, C2b). The OECDD may also provide tax breaks to financially assist this deal (C22c).
An April 2005 article in The World first publicly revealed Project TK, reported that it involved an "Asian firm," and stated that the Port's Executive Director Jeffrey Bishop "would not release the firm's name or area of industry, saying all that information was 'proprietary' " (C2b). The Port and OECDD continued to not identify the company because of confidentiality agreements (Port-A6: Item 5A, C22a, C22c). The Port also did not identify the size of the "Asian" firm's investment or what environmental, aesthetic, or other concerns that residents may have about this type of facility (e.g., Port-A2a: Item 6C, Port-A5: Item 5A, Port-A6: Item 5A, Port-A9: Item 10, and Port-A10: Item 4D).
In August 2005, Governor Kulongoski indicated that he was willing to go to Japan personally to close the deal for Project TK, and this was the first time that the country of the company was known (C4c, C22b). At that time, Port Executive Director Bishop indicated that (C4c): "We are not in negotiations," Bishop said. "There has been a general discussion of costs for services and real estate. But no letters of intent. No contractual negotiations."
In March 2006, Port staff prepared materials for the Port Executive Director's "presentation" in Japan to the TK company (Port-A5: Item 5A). Minutes from the Port Commission's April 2006 meeting state (Port-A6: Item 5A)(boldface added):
"The Executive Director's trip [to Japan] also included a visit with representatives of the Project TK. TK has slowed their process of site selection down; it may now be another two years out. The Port presented a very attractive proposal to them and during this presentation, almost all of their questions related to LNG. ... The staff is going to place our efforts on other projects and put this on the back burner for now. We still cannot release the name of the Company due to confidentiality agreements."
These Minutes indicate that the Port had made a "very attractive proposal," but that the company was not currently interested, so the Port's interest had waned. Again, it looks like the Port was trying to make a deal without informing or including the public in the decision of whether the company's facility would be advisable for Coos Bay.
The World's Elise Hamner reported that Port staff indicated (C22a): "Talks never progressed to the point of negotiations." Many citizens would think that discussing "costs for services and real estate" as revealed in August 2005 (C4c) and presenting a "very attractive proposal" in March 2006 (Port-A6: Item 5A) is negotiating.
On 16 June 2006, an article by The World's Elise Hamner was published (C22a) that suggested that The Oregonian's June 16 article by Richard Read (C22c) would "dash" the hopes for the deal because the company had requested confidentiality. The Oregonian's article revealed that the company's name was Tokuyama (which has a web site http://www.tokuyama.co.jp/eng/) and some information about the Coos Bay proposal such as it was a $500 million project. It also revealed environmental and aesthetic concerns about the facility.
It does not appear that The Oregonian's Read broke any confidentiality agreements in his story. The Oregonian's sources of information included Jordan Cove Energy Project's Bob Braddock and Pacific Power's spokesperson Bekki Witt, who were not bound by confidentiality agreements (C22c). Read's investigative reporting also uncovered notes about Project TK in the Minutes of Port of Coos Bay Commission meetings as well as Oregon Economic and Community Development Department's grant to the Port for exploring the construction of a cogeneration plant (C22c). These sources of information together with information from governments in Washington enabled Read to identify Project TK as being for the Japanese company Tokuyama (C22c).
But The World's article by Elise Hamner appears to have broken the Port's confidentiality agreement. As if she was present in the executive session, Hamner discussed the Port Commission's June 15 executive session "when port staff closed the double wood doors to the public and the commissioners met in private session" (C22a). Hamner reported that the Commissioners were upset at The Oregonian article that would be published the next day because they thought that the disclosure of the company's name could kill the deal (C22a). The Commission's Minutes for the meeting show no discussion of Project TK during the public meeting and state that after the executive session (Port-A9: Item 10):
"Caddy [Commissioner Caddy McKeown] wanted to thank Elise [Hamner] and The World, for respecting the agreement we had with Project TK for confidentiality on this long road; she appreciated the partnering. Caddy is pretty devastated with the article the Oregonian put out but The World did their part in keeping the confidentiality and she is very grateful for that. The rest of the board agreed."
These Minutes did not note that the name of the company was Tokuyama--the two June 16 articles in The World did so (C22a, C22b). The World also reported information about Project TK that was not in The Oregonian and that was apparently only discussed in the Port's executive sessions (C22a, C22c). So The World's stories might be more likely to stop Tokuyama's interest than The Oregonian's article.
The World's Hamner also reported (C22a):
"[Port Commission Vice-President Caddy] McKeown defended the port's secrecy in trying to recruit Tokuyama and other prospective industrial companies. In executive sessions, allowed under Oregon's 'open meetings laws, we can deliberate on the sale of property until the deal's done,' she said. 'In my mind, that's the way it should be done. It's all about the land.' "
Commissioner McKeown's statements that everything can be negotiated in executive sessions until the "deal's done" does not allow an opportunity for public input into the decision (see Oregon's Open Government Policy) or developing a community consensus in deciding a plan, like Governor Kulongoski requested the Port of Coos Bay Commissioners to do. So, which is more important--a Japanese company's imagined culture of secrecy or Oregon's culture of democracy in governmental decisions? If the deal could only be made in secret, would it also not be likely that the company would continue to act in secrecy and dismiss or not reveal issues of concerns about its operations?
After reading Hamner's article in The World (C22a), it is a fair question to ask whether the Port of Coos Bay Commissioners and The World consider multinational companies much more important than the Port's own constituents. The Oregonian article raised questions about the adequacy of electricity supply, the discharge of lots of salt, and that the plant might be an "eyesore" (C22c)--these are issues that need to be publicly discussed before deals are made and Letters of Intent signed by the Port. The World did not disclose these issues that would be very relevant to residents of the Coos Bay area, but chose to defend the Port's secretiveness and blame The Oregonian for the loss of a company that the Port had apparently already given up on (Port-A6: Item 5A, C22a).
The World editorialized on June 15 (B34) that it was important to include the community in "every step of the decision-making process." But the next day, The World printed Hamner's article (C22a) that shows that the public is not included in Port decisions. The World's article tacitly supports the Port's secrecy.
As it turns out, Tokuyama evidently was not as concerned about secrecy and as tradition-bound as the Port of Coos Bay appears to be in Hamner's article (C22a) or in Commission Minutes (Port-A9: Item 10). Minutes for the Port Commission's July 20 meeting (Port-A10: Item 4D) state:
"Mr. Bishop [Port Executive Director] said he wanted to comment on one more item in his report. Sometime back, we had a news article that appeared in the World regarding Project TK because there was an article that ran in the Oregonian regarding the Tokuyama Corporation. The Port had been concerned that because of the breach, we would be removed from consideration. We have received word that they will not remove us from consideration, in fact earlier this month we had a visit from them for a site tour of the property. However, the Port did receive news that due to internal planning activities, they were slowing down their site selection process. It would probably be upwards of a year before they made a siting selection. They have enlarged the project over what it was originally and as a result they are going back and reevaluating the engineering and some of the other sites that they had considered and eliminated in the event that one of those sites would be better suited. We continue to work with them and they did say that they are still very much interested in the site from a long term standpoint and will continue to work with us. This company deals in a lot of different things and they make a lot of different products. The facility was originally proposed to make one product. But a lot of different products can branch off from a core process and they are looking at maybe doing one of those other processes here.
"Commissioner McKeown asked if the slow down was possibly to find out if the LNG terminal was going to be permitted. Won't they have to have some kind of partnership with them for power? Commission President asked if the power requirements had changed. The Executive Director said that yes it had. Originally the company had looked for about 40 megawatts of electrical power in the first phase. In the second phase, it would have been 80 megawatts. If they were to look at the other processes, their ultimate build-out could be up to 160 megawatts of electricity. Without the inclusion of an energy source, such as LNG, we couldn't make it. We were also surprised to see where some of the sites are. The Port thinks there is a site in Australia, a site in Canada and they are now also evaluating potential expansion inside Japan."
An August 19 article in The World that has been removed from The World's web site (C35) indicates that Coos Bay City Councilor Jeff McKeown, the husband of Port Commission Vice-President Caddy McKeown, commented:
" 'One of the things that gave me a sense of comfort about the [Jordan Cove LNG] project originally, was the Japanese company that's considering locating on the North Spit,' McKeown said. 'That is a $600 million project, and if the LNG facility goes in there that company plans to use the natural gas to produce its energy. That company wouldn't locate there if they didn't consider this to be a safe location.' If the LNG facility and Japanese Tokuyama Corp's polysilicon manufacturing plant are sited on the North Spit, McKeown said the Bay Area would see a huge influx of family-wage jobs."
I have not seen the $600 million figure before for Project TK. The Oregonian reported that it was $500 million in June 2006 (C22c), but that was before the Project has apparently grown after disclosure of the company's name and details about its proposed facility.
Tokuyama seems to be awaiting the approval or construction of the Jordan Cove LNG terminal to provide low cost natural gas that could be used by Tokuyama (Port-A10: Item 4D, C2b, C35).
In October 2006, The World's Elise Hamner revealed that another undisclosed corporation has contacted the Port about the property that Tokuyama was interested in, so there may be competition for the site (C43).
In January 2007, the Port's Jeffrey Bishop reported that Project TK "is dead" because Tokuyama had notified the Port that it had chosen to expand its facilities in Japan (C52).
There was no discussion by the Port Commission of possible environmental, aesthetic, or other concerns or any apparent interest by the Port to involve the public in Tokuyama or the undisclosed competing company.
Given the Port Commission's handling of Jordan Cove LNG and Project TK to exclude public information and/or public involvement in the decision about making the deal or not, it is reasonable to assume that the Commission may also make a deal with other companies without including the public.
Addition: Proposed Coos Bay Shipping Container Facility (APM Terminals) and Jordan Cove LNG Terminal (July 2007)
The Port's new "Home" web page that was put up sometime between August 26 and September 2, 2006 now has a link to the "Oregon Gateway" project (http://www.portofcoosbay.com/orgate.htm). However, details about this project other than developing "a multi-purpose cargo facility" are not mentioned as of 3 September 2006.
However, the Port's plans to be a Gateway Port depend upon the successful siting of the Jordan Cove LNG facility that would provide most or all of the financing (Port-A1c, Port-A10: Item 4A, Port-A10: Item 5, Port-A10: Item 6F, C8b, C44, C45a). The Port's Executive Director Jeffrey Bishop says that the costs would be shared 85% for Jordan Cove and 15% by the Port, but that the Port's costs would also "theoretically be born by Jordan Cove," so that "in essence, there is no tax dollars involved in any of this action" (A10: Item 6F). Minutes of the Port Commission's July 2006 meeting (A10: Item 5) indicate that the Port's feasibility study for a "general cargo terminal" in 2003 estimated that the cost would be $40 million.
Jordan Cove Energy Project (2006d) writes:
"The construction and operation of the Jordan Cove Energy Project will have direct, positive impacts on Port of Coos Bay operations. The physical improvements to the Port environment, such as the construction of a multi-purpose, multi-user marine berth, the addition of tractor tugs and the development of an adequately-sized turning basin, will enhance the Port's ability to attract other marine dependent industries. These infrastructure improvements will be accomplished as a direct result of the financial investments made by the Jordan Cove Energy Project."
In October 2006, it was announced that the Port had signed a nondisclosure and confidentiality agreement in July with a new company interested in 800 acres of land on the North Spit (C43) that is called Project April (C46a, C46b). Details about the company have not been given, but it appears related to container shipping, which the Port is studying (C43, C44, C45a, C46a, C46b). In October 2006, The World's Elise Hamner wrote (C43):
"Attachment A in a port confidentiality statement contains information about the 'Oregon Gateway.' It's just a document, but it outlines the port's plan for development of an intermodal marine terminal. The terminal would include cargo and container facilities, with the emphasis on containers. The port already has produced a site drawing. The schematic includes building a container yard at what's known as Henderson Marsh next to the proposed LNG facility. All along, port officials have said they intend to use the LNG project as leverage to build a first-ever North Spit general cargo dock at the same time the LNG berth goes in. But west of the proposed LNG site, there would be two channelside berths for container ships and a yard for rows and rows of containers with a rail transfer area."
...
"[Port Executive Director Jeffrey] Bishop has his eyes on one unique segment of a market, though he's not saying what. Ultimately, he sees Coos Bay with three berths, with specially designed cranes, to handle containers. All three would accommodate post-Panamax vessels. Post-Panamax vessels are too large to fit through the Panama Canal and take a draft too deep to sail into any Oregon port - at least right now. 'There isn't another port in Oregon that has the ability to handle this type of ship. They don't have the land, water or linkages,' Bishop said. This new generation ship would be 100 feet wide, 1,300 feet long and have a 49-foot draft, [Port Communications and Freight Mobility Director Martin] Callery said."
In Nov. 2006, The World reported (C47):
"The Gateway Project is mostly concept. Yet, the port has announced it is talking with an international firm interested in developing an intermodal container shipping facility at Coos Bay. The port signed a nondisclosure and confidentiality agreement with the company, which is looking at about 800 acres of land. As a result, port officials say they no longer are marketing any of their North Spit land for sale.
"Theoretically, such a company would bring in products packed in containers from Asia for shipment by specialized railcar for distribution centers in the Midwest."
The Port has been trying to purchase 221 acres of the Bureau of Land Management's (BLM) land on the North Spit that is zoned for industrial use for over a year (C46a, C46b). Evidently, the Port needs more than Weyerhaeuser's 1,300 acres for Project April, so the Port now has an even greater interest in purchasing the BLM land (C46a, C46b). But the Confederated Tribes of the Coos, Lower Umpqua, and Siuslaw are trying to have the BLM's land returned to them, so the BLM has postponed selling acreage to the Port (C46a).
To handle container shipping, Coos Bay would need infrastructure improvements in a turning basin and improved railroad facilities (C43, C44, C45a, C47). Funding could come from federal, state, and the Port's General Revenues (C43, C44, C45a, C47).
In November 2006, it was reported that BST Associates of Washington is doing an economic impact analysis for the Port's proposed cargo/container shipping facility (C47). The World states (C47)(boldface added):
"The port released one page from its agreement with BST. The scope of services says the company will review operating plans for each terminal component, including a look at cargo volumes and operations. Its job is to estimate the number of direct and indirect jobs, income and taxes for Coos County and the state. The document also says BST will estimate avoided highway trucking costs and environmental benefits of reducing truck volumes.
"Container shipping projects have brought hundreds of jobs to ports around the country, but they also require hefty investments - and sophisticated railroad systems.
"There's no guarantee any such developments will materialize here, and port officials have said railroad, shipping channel and other upgrades will require public and private money. 'If we're going to move in that direction, we need to be thinking about the impacts not just to Southern Oregon and the Oregon Coast, we need to be thinking about the impacts to the state transportation system,' Callery [the port's communications and freight mobility director] said."
In January 2007, the Port announced that it was hiring consultants to determine if the Henderson Marsh wetlands in part of the former 1,300 acres of Weyerhaeuser property could be filled in, so that the property could be listed in the Governor's "Industrial Site Certification Program" (C52). The State could reimburse the Port for up to 85% of the Port's costs for hiring consultants (C52). The World reported (C52):
"Henderson Marsh has been tied to a concept the port has dubbed the Oregon Gateway. The port wants container/cargo import facilities right next to the proposed liquefied natural gas import terminal. An unidentified, big, foreign company is studying whether a container shipping terminal might be feasible. The company's interest in 800 acres has prompted the port to stop marketing all of the North Spit property. It's also led to a confidentiality agreement for port officials."
In reference to Henderson Marsh, the Port's Jeffrey Bishop indicated that "If you can't fill it, there's no project" (C52).
Some residents are concerned about the future of Coos Bay as a Gateway Port. For example, Jaye Bell wrote in June 2006 (B33):
"To top it off Rep. Susan Morgan from Douglas County is pushing to create a five-county regional strategy board, to include Douglas, Coos, Jackson, Josephine and Curry counties, to develop our Coos Bay! If this sounds good remember how little control we have now and add regional non-elected control. Additionally, Morgan suddenly wants to revive our railroad. If this sounds good be aware Washington and California already have said no several times to bringing toxic and nuclear wastes through their ports and on their railroads to a Nevada dump site! Are they now looking at our bay?"
At first glance, this may seem far-fetched, but the Port's secretiveness and apparent "back-room" deals lead to distrust of the Port.
There is an interest in making Coos Bay a Gateway Port, but it does not appear that citizens are being included in discussions or planning. The Commission's Minutes for March 2006 (Port-A5: Item 5A) state (boldface added):
"Last Monday, Mr. Callery, [Port] Director of Communications and Freight Mobility and the [Port] Executive Director attended a task force in Roseburg, organized by Representative Susan Morgan on Freight Mobility planning for Southwestern Oregon. It is a group that consists of statewide legislators and business leaders from our region. There was a lot of brainstorming done and they also worked on a mission statement. These meetings will be continuing through the remainder of the year, every other month, proceeding up to the Legislative session. ... There is a great deal of interest around Medford, the Rogue Valley and Roseburg regarding the potential development with the Port as the gateway."
The July 2006 Commission Minutes (Port-A10: Item 4C) state:
"Martin [Callery, Port Director of Communications and Freight Mobility] continues to meet with Southwest Oregon Trade and Transportation task force which was called into session by Rep. Susan Morgan. At last meeting in Roseburg on Monday, Sen. Verger, Rep. Roblan and quite a few other representatives attended from the regions. There were presentations by Roseburg Forest Products and Harry & David Fruits and Specialty Food and a couple of other local industries talking about their transportation needs and the opportunity they have for growth in their market. Roseburg is very interested in seeing if there are opportunities to move commodity through Coos County that they aren't currently moving through there. They would like to explore moving commodity by barge to the Southern California market."
The Port's lobbyist, former State Senator Ken Messerle, may help with getting State funding for the Gateway Project (see Messerle).
If Coos Bay is being proposed to be a Gateway Port for Southwestern Oregon, it would certainly help if Port constituents were included and that there is a public discussion before decisions are finalized. I have seen no evidence that the Port is trying to have a public discussion about Gateway Port or Project April issues. What, if anything, will prevent toxic or nuclear waste materials from being transported through Coos Bay? Will the Port Commission only include constituents in decision-making if the Port needs tax money directly for a project?
At Port Commission meetings during February-March 2005, members of the public raised about the openness of Port of Coos Bay Commission decisions (C1lb, C1m, C1n, C1o). In February, Marvin Caldera questioned the Commissioners about a proposed raise to a Port executive, but the Commissioners approved the raise without answering, and Port Commissioner Brady Scott stated (C1lb):
"There's nothing written in stone saying we have to respond to somebody's comment in the public comment period. We had all the information we needed."
In March 2005, The World reported (C1o):
"At last week's port meeting, critics charged actions including authorizing a pay increase for a high-level official, were done secretly and without regard for the district's taxpayers. Commissioners responded by approving an external study aimed at reviewing the port's compensation practices. The charges came in the public comment session of the meeting, one month after the commission approved a $15,000 pay raise for then-Director of Operations Mike Gaul. With the move, Gaul also became deputy executive director, the second-highest ranked official on the port staff. Those moves were protested by Marvin Caldera, president of Local 12 of the International Longshore and Warehouse Workers, who accused commissioners of raising executives' pay while allowing maintenance workers to languish on food stamps. At the time, the commission approved the move without responding to Caldera's protest. During Thursday's meeting, two other community members said they thought the board was arrogant for failing to address Caldera's comments.
...
"[Commissioner Jerry] Hampel also vigorously defended the board's integrity and disputed accusations the commissioners operated in secret. 'We have never, ever, broken the code of ethics,' Hampel said after the meeting. 'That's absurd. We've done everything in the open.' ... Yet the board does have the legal right to private meetings, [Commission Vice-President Caddy] McKeown said. While members have to approve motions in public, board members can hold some discussions in closed executive sessions. 'People don't always see the things we're working on, because we can't discuss them,' said McKeown."
Also in March 2005, The World editorialized about the new Port Commissioners' decision about the pay issue (C1n)(boldface added):
"There's no doubt previous port commissions were fractious. Meetings often were colored by fiery debates and disagreement. There was plenty of discussion and when the smoke cleared, it was usually apparent why they took action. It's distressing the new commission members made these important - and expensive - decisions with little public dialogue. ... When they received the oath of office, the commissioners were charged by the governor with establishing a vision and moving the port into profitability. With little explanation, the board took a step that is costing nearly a quarter of a million dollars annually for two employees."
In spite of this controversy, the Port Commission voted a 10% pay increase and a $3,000 increase in car allowance to Executive Director Bishop in March 2006 (C9).
In Minutes for the July 2006 Port Commission meeting (Port-A10: Item 4A), Commission Vice-President Caddy McKeown indicates that the Port "may have one to four different industries to partner with to use" the former Weyerhaeuser property that the Port is purchasing. The industries or the countries of origin for the companies are not specified--perhaps it includes the shipbreaking company Environmental Recycling Systems.
Where is the public involvement in the decision-making process for these other businesses?
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
Shipbreaking at Coos Bay is an issue that could affect Port and state taxpayers. The one ship recycling company that has been identified, Environmental Recycling Systems, wants local and state investment in a Coos Bay facility (B25). Ship salvaging may negatively affect property values as well as negatively impact the Coos Bay oyster industry (e.g., CB-Oysters). It may also harm the Coos Bay estuary environment through the introduction of invasive species (CB-Invasive Species), chemical contamination (e.g., Ship-Hazardous Materials, General Environmental Concerns) or a towing accident (CB-Towing, Towing), an issue particularly poignant to Coos Bay residents because of the New Carissa accident. It could also lead to job loss by established employers. Further, there are significant economic risks in this industry (e.g., see my May 8 letter to the Port and my May 23 letter to Rep. DeFazio). Consequently, this is a public issue that deserves full, meaningful public involvement in deciding whether to have it or not. Ideally, it would be approved or rejected by a vote of citizens in the Port District to determine if there is a community consensus for or against it.
In October 2006, The World's Elise Hamner reported that the Port does not now seem to be interested in ship recycling (B39).
An article in The World based on a Port's Press Release stated (B4): "The port's goal is for the community to assess the benefits that could occur by creating jobs through ship recycling, Wednesday's [March 8] press release said."
Further, the Port's second forum about shipbreaking was to be about its "economic opportunities and potential job creation" (B4). As of 13 November 2006, this forum has not been held.
If the Port is objective, why is the Port already so sure of benefits? The economic risks of ship scrapping are quite evident (e.g., see my May 8 letter to the Port and my May 23 letter to Rep. DeFazio).
However, most everyone is in favor of recycling--it is in the details of how, where, and when it will be done that items of concern arise (B12). By holding forums before significant details are publicly released, the public does not have the opportunity to ask informed questions.
These warning signs suggest that the Port Commission of Coos Bay may not include the public in the decision-making process of approving shipbreaking at Coos Bay.
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
Environmental Recycling Systems (ERS) is a good public relations name for a company interested in scrapping ships. Its name could blunt opposition from environmentally sensitive people. How could environmentalists be against environmental recycling?
ERS is reportedly a Seattle-based company (B2, B25, B30), though in 2005 it was noted as being in Turkey. ERS appears to have had a short history in the State of Washington. Records of the State of Washington's Secretary of State Office indicate that Environmental Recycling Systems LLC was first incorporated into the State of Washington in February 2005.
In February 2006, I emailed The World's Elise Hamner that ERS in 2004 and 2005 was trying to negotiate to scrap all obsolete U.S. Maritime Administration (MARAD) ships overseas in Turkey and Mexico and that I could not find anything on the Internet to indicate that ERS had done any shipbreaking in the United States. The World has not written about ERS' interest in scrapping ships in Turkey or Mexico prior to its interest in Coos Bay.
The World has indicated that Vaughan has only been involved in ship recycling for about two years (B2), which is about the same length of time that ERS was reported to have been trying to export MARAD ships to scrap. Part of his minibiography as a member of the "Bush-Cheney '04 National Veterans Steering Committee" states: "He [Denny Vaughan] was also president and founder of a boat works company; president of the real estate division of a corporation; and program manager of major defense and aerospace programs." Thus, Vaughan appears to have Navy and political connections.
After the Port announced the interest of ship recycling companies in Coos Bay on Feb. 16 (Port-A2b, Port-A3), The World has reported extensively about shipbreaking with 25 news articles and one editorial (B7) during February-June. However, The World has not reported about what business operations ERS has in the U.S., if any. Has ERS recycled any ships in the U.S.? Does ERS continue to do shipbreaking overseas?
In news articles about proposed ship recycling at Coos Bay, The World has reported about the personal background of ERS' president (B30) or senior partner, G. Denny Vaughan. The World has several times written that he is a native son of Coos Bay and a retired Navy rear admiral. This reporting is favorable public relations for ERS because communities feel closer to and more supportive of a native son and successful leader. Excerpts from and links to some of the news articles in The World relating to ERS' G. Denny Vaughan:
B2 (Feb. 17). "[Environmental Recycling System's G. Denny] Vaughan, who's based in Seattle, isn't ready to discuss his idea in great detail. ... Vaughan's familiar with the shipping industry on several fronts. He grew up in Coos Bay. He graduated from Marshfield High School, moved on to Oregon State University and eventually found a career with the U.S. Navy. ... The retired rear admiral said Thursday that he entered into the ship recycling business two years ago. And ironically it seems, his enterprise is steering him back to Coos Bay. There are about 150 former U.S. military vessels anchored awaiting recycling. Congress set what appears to be an unlikely deadline that those ships be safely disposed of by the end of this year. That doesn't include the potentially thousands of other privately owned ships, tankers and barges that are and will become obsolete. ... Vaughan would like to see his company and his hometown to get some of that business."
B9 (April 8). "Now, Denny Vaughan has stepped in. The Coos Bay native sailed off into a career with the U.S. Navy decades ago. Years later the retired rear admiral wants to get into the business of 'recycling' his former employer's mothballed ships and other vessels. He is proposing a facility with specially-built graving docks to isolate potential pollutants. He wants it built in Coos Bay."
B25 (May 20). "Scrap metal prices are climbing and so is the number of companies seeking MARAD's [U.S. Maritime Administration] business. The challenge is outcompeting the others to get a piece of it. Dennis Vaughan thinks he has the answer. He set a course for hometown Coos Bay. He hopes to build state-of-the-art graving docks here. The retired U.S. Navy rear admiral is partnering with Namik Idil, a New Yorker, who spent 25 years in Turkey, working his way up the ladder in the ship recycling business. Vaughan said the pair has lined up investors from Turkey and Japan to help their Seattle-based company, Environmental Recycling Systems, hook into MARAD's business."
B30 [May 25]. "Ecomar [a Mexican company interested in ship recycling] would partner with Environmental Recycling Systems, the Seattle-based company studying Coos Bay for a similar facility, according to ERS President Denny Vaughan, a retired U.S. Navy rear admiral."
The apparent "native son returning home" storyline in The World about Vaughan is marred upon close examination because:
"The federal government is moving forward with a tentative deal to send all the remaining obsolete James River Reserve Fleet ships to recycling yards in Turkey or Mexico at a reduced cost. All the rotting ships in the James River ghost fleet could be gone in two years if the proposal succeeds, said Denny Vaughan, senior partner with Environmental Recycling Systems, a shipyard in Turkey that is coordinating the plan.
"The James River fleet currently has about 55 obsolete ships. Vaughan's group is also offering to dismantle 77 ships in reserve fleets in Texas and California.
...
"Environmental Recycling Systems is offering to dismantle the ships in the Texas and California fleets for free, and charge only preparation, pre-cleaning and towing costs for the James River fleet ships, Vaughan said.
"The Turkey-Mexico proposal has been in the bidding process for about two years.
...
"Environmental Recycling Systems is a shipyard near the Aegean Sea in Aliaga, Turkey, and has a coalition of 29 additional yards interested in taking American ships. Dismantling ships in developing countries is cheaper because of lower labor costs and high demand for the ships' metal, boilers and generators, said Vaughan, a retired Navy rear admiral.
"Vaughan would not disclose the exact locations of the Mexican shipyards in the proposal, other than saying they were on the country's east and west coasts."
Has The World made this too much of a personal, favorable public relations story about Denny Vaughan rather than reporting about ERS' stability, experience, and operations that are more appropriate for evaluating his ship salvaging company? The World's lack of reporting about ERS is similar to its lack of reporting since at least June 2005 about other large companies that may come to Coos Bay. For example, I have found no investigative reporting articles in The World about Fort Chicago Energy Partners of Canada that became the majority partner in the Jordan Cove Energy Project L.P. in July 2005 (Fort Chicago Energy Project 2005), Energy Fundamentals Group Inc. of Canada that has a deferred right to become an equity partner in the Jordan Cove Energy Project (Fort Chicago Energy Project 2005), or Tokuyama (see Project TK). It was The Oregonian that did some investigative reporting about Tokuyama (see Project TK).
In October 2006, The World's Elise Hamner reported that the Port now does not seem to be interested in Vaughan's ship recycling facility (B39).
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
CB-Coos Bay Shipbreaking Issues Starting in February 2006
Articles in Coos Bay World about Ship Scrapping Starting in Feb. 2006 (not including Editorials or Letters to Editor)(N=25 articles as of June 25):
..........B2, B3, B4, B6, B8, B9, B10, B11, B13, B14, B15, B16, B17, B18, B19, B20, B21, B22, B23, B25, B26, B28, B29, B30, B31, B39
Articles in Other Newspapers about Ship Salvaging at Coos Bay Starting in Feb. 2006: B37
CB-Bay Bridge Enterprises (BBE) at Coos Bay (shipbreaking company) (also see OR-BBE): B9
CB-Economic Benefits/Risks: A2b, A7, B4, B8, B15, B16, B17, B28, B29
CB-Editorials about Shipbreaking: B1, B7
CB-Environmental Recycling Systems (ERS) (shipbreaking company)--see CB-Vaughan
CB-Euphemistic Use of Term "Ship Recycling"?: A2b, A7, B2, B9
CB-Forums about Shipbreaking: A2b, A5, A7, B2, B3, B4, B5, B6, B7, B8, B9, B12
CB-Invasive Species that May Be Brought to Coos Bay with Shipbreaking (also see Ship-Invasive Species): B2, B3, B5, B8, B22, B32, B38
CB-Letters to the Editor about Shipbreaking: B5, B12, B24, B27, B32, B33, B35, B36, B38
CB-Oysters as Possibly Affected by Shipbreaking: B8, B15, B16, B22, B24, B35
CB-Politician's Statements about Shipbreaking: B17, B31
CB-Port of Coos Bay Actions about Shipbreaking: A2b, A3, A4, A5, A6, A7, A8, B2, B4, B6, B8, B15, B34
CB-Shipyard Contamination and Cleanup in Coos Bay: B15, B19
CB-Towing Specifically to Coos Bay (also see Ship-Towing): B21, B32, B39
CB-Vaughan, Denny of Environmental Recycling Systems (ship recycling): B2, B9, B25, B30, B39
OR-Oregon Shipbreaking Issues Not Specifically for Coos Bay
OR-Bay Bridge Enterprises (BBE)-Newport: B1, B2, B9, B19
OR-DeFazio (Rep. Peter DeFazio): B25, B26
OR-DEQ (Oregon Dept. of Environmental Quality) Inspections or Requirements: B8, B12, B15, B19
OR-Kulongoski (Gov. Ted Kulongoski): B1, B9, B19, B29
OR-Wyden (Senator Ron Wyden): B26
Ship-Shipbreaking of U.S. Maritime Administration (MARAD) or Navy Ships in California
Ship-BAN (Basel Action Network) Statements: B10, B20
Ship-California Shipbreaking (including Mare Island) (also see section D-2 in May 8 letter to the Port): B18, B28
Ship-Exporting Ships for Scrapping (also see section D-4 in May 8 letter to the Port): B10, B13, B20, B26, B29, B30, B39
Ship-Hazardous Materials (also see Environmental Concerns): B10, B11, B13, B20, B28, B39
Ship-Invasive Species that may be brought with shipbreaking (also see CB-Invasive and Invasive Species): B3, B5, B8, B22, B23, B37, B39
Ship-MARAD Statements (also see MARAD's Objectivity): B20
Ship-Navy: B28
Ship-Scrap Steel Prices & Shipbreaking (also see scrap metal price variability in May 8 letter to the Port): B9, B10, B13
Ship-Suisun Bay (California) Ships in MARAD Fleet (also see Suisun Photos): B3, B9, B11, B18, B20, B21, B22, B39
Ship-Texas Shipbreaking of MARAD Ships in Suisun Bay (also see domestic shipbreaking competition in May 8 letter to the Port): B9, B10, B18, B21, B22, B39
Ship-Towing Ships to Be Scrapped (also see Towing): B18, B20, B21, B22, B28, B32, B39
Ship-Worker Safety (also see Job Safety Concerns): B13,
B14
Other--Port of Coos Bay Issues Not Directly Related to Shipbreaking
Other-Container Shipping: C43, C44, C45a, C46a, C46b, C47
Other-Coos Bay as Gateway Port: A1c, A5, A10: Item 4A, A10: Item 5, A10: Item 6F, B33, C8b, C43, C44, C45a, C46a, C46b, C47
Other-Fish Processing Plant Purchase: A10, C25
Other-Liquefied Natural Gas (LNG)(incomplete listing of many articles and Letters to Editor--search for "LNG" in the Archives of The World for more articles)
..........Also see Timetable for the Port Commission's Land Deal for the Jordan Cove LNG Facility
..........General items about Jordan Cove LNG:
Jordan Cove Energy Project 2004, Jordan Cove Energy Project 2006a, Jordan Cove Energy Project 2006b,
...................Jordan Cove Energy Project 2006c, Jordan Cove Energy Project 2006d, Jordan Cove Energy Project 2006e,
...................Jordan Cove Energy Project 2006f, A1b, A1c, A2a, A6, A8, A9, A10, A11, A12a, A12b,
...................B1, B15, B17, B31, B33, B34, C1da, C1db, C1e, C1f, C1g, C1ha, C1hb, C1ia, C1ib, C1ic, C1j, C1k, C2a, C3a, C3b, C3c,
...................C4a, C4b, C4d, C4e, C4f,
C5, C6a, C6b, C7, C8a, C8b, C8c, C8d, C9, C10, C11, C12, C15, C16, C17, C18, C19, C20, C21,
...................C22d, C23, C24a, C26, C27, C28, C29, C30,
C32a, C32b, C32c, C32d, C33a, C33b, C35, C36, C37, C38, C39, C40, C41a,
...................C41b, C41c, C41d, C42, C45b, C48a, C48c, C48d, C48e, C48f, C48g
...........Citizens Ask Port Commission at Commission Meetings for Independent Study or Public Debate before Approving Port Commission's Deal with
...................LNG Developers: Jan. 2006 (Port-A2a: Item 3, C6a), March 2006 (C9), July 2006 (Port-A10: Item 5, C32a)
..........Jordan Cove Energy's Estimated Investment in LNG Facility:
....................Before Port's Land Deal in Oct. 2005--$150-200 Million: Jordan Cove Energy Project 2005:41, C1da, C1db, C1e, C1g, C1ia, C1ic, C1j
....................After Port's Land Deal. Estimate in July-August 2006--$500 Million: C32a, C32b; "more than $500 million": Jordan Cove Energy Project 2006d
..........Jordan Cove's Bob Braddock Predicts in Feb. 2006 Only 1 LNG Facility in Northwest: C7
..........Jordan Cove's Bob Braddock Promises that if Jordan Cove LNG facility is built that "Coos County will have the lowest natural gas prices
...................on the West Coast": C8d, C11
..........Jordan Cove LNG Project Initiated by Colorado-based Energy Projects Development, LLC (Jordan Cove Energy Project 2004:2) and Created
.............................Specifically for This Project: C1da, C1f, C1g
....................Canada-based Fort Chicago Energy Partners Joins Project: Fort Chicago Energy Partners 2005, C4b
..........Jordan Cove LNG Facility Capacity:
....................Before Port's Land Deal Would Have Been Smallest LNG Terminal in U.S.: C1da,
C1f, C1g, C1ia, C1ic, C7
....................Before Port's Land Deal, Peak Daily Production of 200-250 Million Cubic Feet of Gas Per Day: Jordan Cove Energy Project 2005:7, C1f,
.............................C1g, C1ia, C2a, C7
....................After Port's Land Deal, Daily Capacity of 1,000 million cubic feet (1 billion cubic feet): Jordan Cove Energy Project 2006b,
.............................Jordan Cove Energy Project 2006e:1-4, Oregon DEQ 2006; C32c
..........Jordan Cove LNG Facility Acreage:
....................Before Port's Land Deal Was for 93 Acres of Roseburg Forest Products Wood Chip Terminal:
Jordan Cove 2004:9, C1k, C2a, C4a. (This
.............................was apparently rounded off to 90 acres in C1f, C1g, C1ia, C1ic, C4d.)
....................After Port's Land Deal, Lease/Sale Option of Up to 200 Acres of Former Weyerhaeuser Land: Port-A1c, Port-A6: Item E
....................After Port's Land Deal, 173.2 acres (163.2 acres from the Port plus 10 acres from Roseburg Forest Products)
.............................(Jordan Cove Energy Project 2006e:1-11, Table 1.2-1; "170-acre Parcel" Jordan Cove Energy Project 2006c. (But the Port says
.............................Jordan Cove LNG will use 145 acres of Port's land: Port-A9: Item 6A, so the Port's publicized figure differs from that officially given
.............................by Jordan Cove Energy Project in their filing to the Federal Energy Regulatory Commission [FERC].)
..........LNG Ships Per Month to Jordan Cove LNG Terminal:
....................Before Port's Land Deal in Oct. 2005--about 2 Ships per Month: C1da, C1db, C1e, C1f, C1g, C1ic, C9
....................After Port's Land Deal--"... on the order of 80 ships per year. The actual number of LNG ships will be dependent on the capacity
.............................of the LNG ships": Jordan Cove Energy Project 2006e:1-5; if small LNG tankers are used, there would presumably
.............................be more trips. About 6-7 ships/month (80 per year): Oregon DEQ 2006, Port-A5, C9, C11, C32c
..........Public Surveys about Jordan Cove LNG Facility: 12 June 2006 Informal Survey Found That Just 7 of 36 People Favored It (C21);
....................11 July 2006 Public Hearing with Only a Handful of about 90 People Speaking in Favor (C27); 18 October 2006 Public Forum "clearly had a majority of LNG opponents" (C45b)
..........Purchase of Weyerhaeuser Land by Port Depends Upon Jordan Cove LNG facility: Port-A1c, Port-A6, Port-A9, B15, C4f, C5, C13, C19
....................Coos County Urban Renewal Agency--North Bay Pledged Future Tax Revenues to Meet the Debt Service of OECDD State
.............................Loan: Port-A1c, Port-A2a, Port-A6
....................Oregon Economic & Community Development Department (OECDD) State Loan Enabled Land Purchase and Jordan Cove LNG Facility:
.............................Port-A1c, Port-A2a, Port-A6, Port-A8, Port-A9, C13
....................Rep. Peter DeFazio Supported Coos Bay LNG Facility & Helped Port's Purchase of Weyerhaeuser Land: Port-A1c, C1e. DeFazio told
.............................audience to contact Port Commission about LNG approval C36. He upset with change from small to big project: C42
Other-Pipeline from Jordan Cove LNG facility (incomplete listing--to see more, search The World's Archives for "pipeline"):
..........Prior to Port's Land Deal--Use Coos County's 12-inch Pipeline: C1da, C1db, C1e, C1g, C1ia, C1ic, C1k, C2a, C4a, C4d
....................NW Natural gas' 5 Mile Pipeline Connects North Spit and Coos County Pipeline: C1g
..........After Port's Land Deal--Construction of "Pacific Connector Gas Pipeline," a 36-inch Pipeline to near California Border Announced in Feb. 2006:
....................Pacific Connector Gas Pipeline 2006a, Fort Chicago Energy Partners 2006, Port-A10, Port-A11, B33, B34, C6b, C7, C8a, C8b, C10, C14,
....................C16, C17, C18, C20, C21, C24a, C27, C30, C31, C32a, C32c, C33a, C34, C35, C36, C41c, C41d, C45b, C48a, C48b, C48f, C48g
..........After Port's Land Deal--Law of Eminent Domain to Acquire Easements from Landowners Unwilling to Grant Easements to
...................."Pacific Connector" Pipeline: C10, C21, C31, C48a
..........After Port's Land Deal--Pacific Connector Gas Pipeline Estimated to Cost $750-$850 Million: C8b, C32c
..........After Port's Land Deal--Pipeline Would Increase "Western natural gas supplies by 20 percent" according to PG&E: C8b, C32c
Other-Project TK (Tokuyama)(This only includes Port Commission meetings starting in November 2005. This was also mentioned as "TK" in Minutes of other Commission meetings--see http://www.portofcoosbay.com/minutes.htm for most recent 8-9 meetings): Port-A5, Port-A6, Port-A9, Port-A10, C2b, C4c, C5, C22a, C22b, C22c, C35
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
The Port's home web page is (http://www.portofcoosbay.com/). As of Nov. 11, 2006, the Port does not have any web pages about shipbreaking, although the Port's Martin Callery indicated that they would be doing so "soon" on 7 April 2006 (B8).
See available Minutes of the Port's Commission meetings at Minutes. However, I have saved some of the Minutes of Meetings before they became unavailable. Below, I have included all items related to ship salvaging, but only what I thought were the most important items about other Port projects--the Minutes could be searched for more details.
EXCERPT [boldface added] from Item 5A, Executive Director Management Report (the quotation marks are as given in the Minutes):
He [Port Executive Director Jeffrey Bishop] commented that he would give an update on the strategic planning efforts that came out of the Strategic Planning Workshop in April. As a reference, here is a brief overlook of some [of] the discussion topics from the meeting in April.
April meeting discussion topics were as follows:
THE GOVERNOR'S CHARGE
"VISION. Promote optimal use of Coos Bay's deep-water port for the enhancement of the economy and quality of life in the region."
COMMENTS. Note that the Governor's Charge was given to the Oregon International Port of Coos Bay Commissioners earlier than July 2005, when these were included in the Commission meeting. They were probably given when the Governor gave the Commissioners their oath of office in January 2004, since The World (C1c) then wrote about the "governor's charge" and that the Governor told the new Commissioners that "bickering is not persuasive in Salem or in Washington, D.C." like in his Charge above.
Jeffrey Bishop was hired as General Manager of the Port in January 2005 and proposed to have his title changed to Executive Director (C1la, C1lb).
KEYWORD: Other-LNG.
EXCERPT from Item 5c: "The Director of Communications and Freight Mobility [Martin Callery] commented that he has been working a lot with Bob Braddock and the Jordan Cove Energy Project. Port staff had the opportunity to meet with Mr. Braddock's engineering consultants on what the Port is involved in, and how staff can help with their project."
KEYWORD: Other-LNG.
EXCERPTS [boldface added]: "Oregon International Port of Coos Bay Executive Director Jeffrey Bishop was authorized by unanimous vote of the Port's Board of Commissioners during the October 20, 2005, commission meeting to sign a letter of intent with Weyerhaeuser Company for the option to purchase nearly 1,300 acres of North Spit land, and to execute a lease/sale option with Jordan Cove Energy Project L.P., developer of a proposed Liquefied Natural Gas (LNG) facility, for up to 200 acres of that same industrial property. Port staff and its community partners have been communicating with Weyerhaeuser since last winter seeking information about their plans for the North Spit. Property acquisition discussions started in August, with terms outlined in the letter of intent coming through final negotiations during the past 10-days.
...
"The Port is negotiating with the State of Oregon to borrow $15 million and the Coos County North Bay Urban Renewal Agency board recently pledged future tax increment revenue for debt service of that loan. Port staff is also negotiating a $10 million loan from Umpqua Bank to finance a two-year contingency period, during which staff will perform additional due diligence and which allows cancellation of the transaction and refund of the purchase price after the first year. All debt is contingent on successful siting of the Jordan Cove LNG project.
...
"Dave Kronsteiner, Port Commission President, stated 'Buying the Weyerhaeuser land and leasing or selling a portion to Jordan Cove goes straight to the bottom line of our mission of building a healthy regional economy by productive, aggressive management of local assets. Early on we determined the need to work with public and private sector entities to help us leverage this deal.' "
...
"[Oregon International Port of Coos Bay Executive Director Jeffrey] Bishop said, "By partnering with Jordan Cove, we're able to move forward with our goal of revitalizing maritime commerce in the Coos Bay harbor through future development of a modern multi-purpose cargo terminal.'
...
"In comments praising the many partners that have helped with the project, Kronsteiner said, 'Everyone we've asked to participate has been enthusiastic and supportive. South Coast Development Council, Coos County and the urban renewal district board, the Oregon Economic
& Community Development Department, Umpqua Bank; they have all helped close this deal for us. Congressman Peter DeFazio played an important role expediting the process. He has quietly and enthusiastically assisted when it was needed.'
"Throughout the months of discussion over the land use issue, U.S. Rep. DeFazio was key in facilitating communications between the Port and Weyerhaeuser, and his staff closely tracked the project as it was moving forward. Congressman DeFazio said, 'The Port of Coos Bay has long been an economic driver for the region and acquiring this North Spit property will definitely increase opportunities for job creation and revitalization of the critical marine and industrial sectors in southwest Oregon.' "
COMMENTS. The State of Oregon is a significant part of this deal through their loan that tacitly approves the siting of the LNG facility. Why agree to a $15 million loan if the State will later oppose the LNG facility?
Also see The World's article about this meeting (C4f).
KEYWORDS: Other-LNG, Other-Project TK.
EXCERPT from Item 3, Public Comments: "Daniel Seeres [Serres in C6a] represents Friends of Living Oregon Waters (FLOW). They are interested in the proposed LNG facility and the Weyerhaeuser property purchase. Dan distributed a written statement to all the Commissioners. It is included in the packet; a CD with some written reports was also included. Dan does not want the Port to depend on FERC to do the study of the LNG situation. He feels FERC will readily move forward on controversial projects that others don't like. He is urging the Port to do its own study and make its own opinion. He would also like to have a detailed discussion on public safety issues and security issues of the Jordan Cove LNG proposal. He feels that the whole project will require a second pipeline for natural gas which is not good in his opinion. Dan would also like the Port to put on their web site all the environmental issues they have on the Weyerhaeuser property. He would like the Port to be very clear about what is there -- what chemicals; what clean up may be necessary and whose liability it is."
EXCERPT from Item 6A, Intergovernmental Agreement between the Coos County Urban Renewal Agency -- North Bay District (CCURA) and the Port of Coos Bay (boldface added): "The staff would like to pull this action item as we have not received the State's attorney general's written comments yet and there may be some changes. However, here is some background, so you are aware of what it is and what the purpose is. The Port has been in negotiations with Weyerhaeuser for almost 1300 acres of land on the North Spit. In Phase I the Port intends to borrow $15 million dollars from the State of Oregon and $10 million dollars from Umpqua Bank. Weyerhaeuser will have use of the funds for not less than one year. The Port will pay for the interest of these loans from a series of option payments from Jordan Cove Energy Partners (JCEP). JCEP has the option to purchase 200 acres for the construction of a LNG terminal. JCEP will guarantee its lease/purchase with a letter of credit and Weyerhaeuser, during the two year contingency/due diligence period will issue a Deed of Trust on the property. The State's loan will bridge the acquisition from Phase I to Phase II. During the option period, the payment comes from JCEP. In the Phase II it would come from the tax increment paid by the new terminal. The intergovernmental agreement pledges the tax increment created in Phase II from the CCURA to the Port. This serves as security for the State for the bridge loan. Part of the requirement requires that there is a security instrument, a letter of credit between JCEP and the Port or the State or CCURA, as it is determined in negotiations. The CCURA has no obligations to disperse any funds unless the tax increment is large enough to cover the debt service. We are going to postpone authorization until the February meeting."
EXCERPT from Item 6C, Resolution 05/06-5 Authorizing Executive Director to Apply to the State of Oregon for a Port Planning & Marketing Grant on Behalf of Project TK: "In April, 2005, the Port, in support of Oregon Economic and Community Development Department's (OECDD) recruitment of Project TK to the North Spit, retained CH2M Hill to provide engineering support for key infrastructure. The project was partially completed with support of a Port's Planning and Marketing Grant. Staff would like to develop an energy proposal for Project TK. It will require a second request for Port Planning and Marketing funds from the state. The budget for this project is $32,000. At the request of the State of Oregon, the Port is submitting a request to the OECDD Port Planning and Marketing program for a grant in the amount of $25,000. The other $7,000 will be provided by the Port. Matching funds required are available in the Port's General Fund. On a motion by Commission Scott (second by Commissioner Smith) the Board of Commissioners approved Resolution 05/06-5 Authorizing Executive Director to Apply to the State of Oregon for a Port Planning and Marketing Grant on Behalf of Project TK."
KEYWORDS: CB-Economic, CB-Euphemistic Use of Term "Ship Recycling"?, CB-Forum, CB-Port.
The press release by Jeff Bishop, Executive Director, Oregon International Port of Coos Bay in its entirety:
"During the past several months, there has been a lot of attention focused on the pros and cons of proposed ship recycling - often called ship breaking - operations here in the Northwest. The most recent proposal, which generated a great deal of attention and controversy, was the Bay Bridge LLC proposal in Yaquina Bay at Newport, Oregon. As you know, this proposal was ultimately denied by the Port of Newport. However, the conversation about the feasibility and advisability of ship recycling in the Northwest is far from over.
"MARAD, the U. S. Maritime Administration, currently has more than 150 decommissioned ships that must be disposed of; at least one-third of these ships are located in Suisun Bay near San Francisco. A mandate from the U.S. Congress, which has already been extended once, requires that these ships be disposed of by the end of 2006. Clearly this will be difficult for any firm to achieve. However, ship recycling companies are urgently scouting potential sites in the Northwest. The Oregon International Port of Coos Bay, along with other ports and communities throughout the Northwest, including in some cases private property owners, has been approached by various ship recycling companies.
"In the Port's limited role as a regulatory body, we can play an instrumental part in helping to educate communities and residents throughout Oregon; weighing environmental issues against the potential economic benefits of ship recycling operations. Through information provided by scientists and other third-party experts, we will explore ways to help mitigate environmental hazards and discuss the viability of safely handling and disposing of potentially contaminated materials.
Additionally in our role as an economic development entity for the bay area, we will also assess how our communities and the region could benefit from a significant number of well-paying jobs, if it can be demonstrated that ship recycling can be done in a safe and responsible manner by a firm committed to meeting the standards all Oregonians would demand for protecting coastal estuaries and the environment.
"It will be incumbent on Port staff to provide the community and the Board of Commissioners the information needed to have an open and balanced discussion of all the issues associated with ship recycling; from a broad analysis of possible environmental impacts to a critical look at the opportunity to create local jobs.
"Consequently, I would like to propose that we bring together, in a public forum, several third-party unbiased experts to begin the education process. We would like to pursue an initial forum in partnership with the Oregon Institute of Marine Biology - O.I.M.B. and South Slough National Estuarine Research Reserve and we have talked with the directors of those institutions about working together. In early March we may have the opportunity to hear from Jim Carlton, one of just a few specialists in estuarine ecology in the country, so we would like to schedule our first forum while Mr. Carlton is visiting the area.
"I believe that a public forum such as this will be a solid platform for a community-wide, and even a statewide, discussion of ship recycling. Our intent is to have the first forum launch a series of similar events, each focused on a different aspect of the overall discussion of ship recycling and protecting our multiple-use estuary.
"Although we have been approached by a number of ship recycling companies, we as a port and as a community do not have enough information to make a sound judgment. I believe this process will help facilitate a solid decision-making process. By taking this approach we are not endorsing or criticizing any efforts. We believe that we all need to learn more about this issue. We need to learn what are the assets and liabilities. From that we can establish an open process for assessing whether or not the Port of Coos Bay should, and if so how to, entertain any ship recycling proposals."
Statement by Jeff Bishop, Executive Director
Oregon International Port of Coos Bay
February 16, 2006 (at meeting of Port's Board of Commissioners)
COMMENTS. Note that Bishop chose "ship recycling" 12 times and a synonymous term ("ship breaking") only once. Is he using "ship recycling" euphemistically? Bishop notes the economic benefits of ship recycling but not the risks (e.g., see my 8 May 2006 letter to the Port of Coos Bay and 23 May 2006 letter to U.S. Rep. Peter DeFazio). The Minutes of this meeting indicate that the Commissioners did not discuss this much at the meeting when this was announced (A3).
KEYWORD: CB-Port.
ABSTRACT. In Item 5, Executive Director Jeff Bishop's statement was read (A2b), and the Commission agreed to start the process of learning more about ship recycling. No discussion is included in the Minutes.
KEYWORD: CB-Port.
KEYWORDS: CB-Forum, CB-Port, Other-Coos Bay Gateway, Other-Project TK.
EXCERPT from Item 3, Public Comments: "Bob Braddock of Jordan Cove Energy discussed some issues involving LNG traffic that came up recently. There were several questions listed in the Coos News; five pertain to the Port and Bob will answer them to the extent that they can be answered at this time.
"1. How frequently will LNG vessels be arriving in Coos Bay? At this time, the estimate is for 80 vessel calls a year."
...
"Jody McCaffrey is a concerned citizen who opposes the LNG proposal. She spoke briefly asking the Port to be careful about bringing this industry to Coos Bay. She is going to forward some email addresses to the Commission that have information she feels makes this a dangerous proposal."
EXCERPTS from Item 5A:
"Last Monday, Mr. Callery, Director of Communications and Freight Mobility and the Executive Director attended a task force in Roseburg, organized by Representative Susan Morgan on Freight Mobility planning for Southwestern Oregon. It is a group that consists of statewide legislators and business leaders from our region. There was a lot of brainstorming done and they also worked on a mission statement. These meetings will be continuing through the remainder of the year, every other month, proceeding up to the Legislative session. The next meeting will be a Port meeting and the task force will be discussing the Ports freight needs. The hope is to come up with a vision so that everyone can work together to alleviate the freight mobility situations. There is a great deal of interest around Medford, the Rogue Valley and Roseburg regarding the potential development with the Port as the gateway.
"Staff has been working hard on the latest proposal, Project TK, which will be presented on Monday in Japan. The Executive Director was surprised when the State said that we were going to be copying and assembling the presentation; however, the staff stepped in and worked hard to get it completed and
assembled into notebooks for the Executive Director to take. The Executive Director complimented the staff on a job well done."
EXCERPT from Item 10, the only material about ship recycling: "Martin [Callery, the Port's Director of Communications and Freight Mobility] asked to share something he forgot in his management report. The first meeting to look at the process of ship recycling was sponsored by Oregon Institute of Marine Biology (OIMB) on March 9th. There will be three more of these meetings that the South Slough and the Port will co-sponsor. The next tentative venue will be the North Bend Library in the 1st week of April. Then roughly every four weeks after that there will be another one."
COMMENT. For a different point of view about the freight mobility task force, see discussion of the Gateway issue. This meeting is also reported in The World (C9).
KEYWORDS: CB-Port, Other-LNG, Other-TK.
EXCERPT from Item 5A:
"The Executive Director's trip [to Japan] also included a visit with representatives of the Project TK. TK has slowed their process of site selection down; it may now be another two years out. The Port presented a very attractive proposal to them and during this presentation, almost all of their questions related to LNG. The type of factory they would build would make use of the same kinds of contractors and workers as those constructing the LNG facility. The Port thought that their interest in the LNG was for the energy, but from the questions, it seems that it is because they need this capable work force. Again, Jeff [Bishop, Executive Director of the Port] pointed out that there is no relationship between TK and LNG. The staff is going to place our efforts on other projects and put this on the back burner for now. We still cannot release the name of the Company due to confidentiality agreements."
P. 3, Item E EXCERPT from a "Project Phoenix Summary" (boldface added): "In October of 2005 The Oregon International Port of Coos Bay concluded business negotiations with the Weyerhaeuser Corporation and Jordan Cove Energy Partners [JCEP] to acquire and sell certain real estate assets on the North Spit. That decision was a culmination of many months of process to establish a direction for the Port as was directed by Governor Ted Kulongoski. ... The purchase price is $25M. ... The Port will provide an option lease up to 200 acres to JCEP. ... The Port will begin the permitting process for a berth/slip and a 1600 foot turning basin. The Port will borrow $15M from the State and $10M from Umpqua Bank and the Coos County North Bay Urban Renewal Agency has pledged future tax revenues to meet the debt service of the State loan. All debt is contingent on the successful siting of a LNG terminal."
EXCERPT from Item 7A. Property Acquisition: Intergovernmental Agreement -- Coos County Urban Renewal: "The Port has concluded negotiations with an option to purchase approximately 1300 acres of land from Weyerhaeuser. In Phase 1, the Port intends to borrow $15M from the State and $10M from Umpqua Bank. Weyerhaeuser will have use of the funds for not less than one year. The Port will pay the interest by a series of option payments made by JCEP [Jordan Cove Energy Partners]. JCEP will also have an option to lease or acquire up to 200 acres for construction of a LNG terminal. JCEP will guarantee its lease/purchase with a letter of credit. ... The Intergovernmental Agreement between the Agency [Coos County Urban Renewal Agency--North Bay District] and the Port will pledge tax revenues from the new terminal sufficient to cover debt service for both the State's loan and the Port's refinancing mechanism to secure long term financing for the acquisition."
EXCERPT from Item 7B. B. Resolution 05/06-8 State Loan North Spit Property Acquisition [which was voted on and approved by the Port Commissioners]: "The Port has applied for and received conditional approval for financial funding assistance from the Oregon Economic and Community Development Department's Special Public Works Fund program on behalf of the Coos Bay's North Spit Property Acquisition. The contract has been received for signing authority. The loan is in the amount of $15M for a term of 5 years."
The only mention of ship recycling was Item 8. "INFORMATION ITEMS: A. Letter from Governor regarding ship breaking." [No comments about the letter are included in the Minutes.]
COMMENTS. The Port's Minutes seem to indicate that the Port has given up on Project TK for the present. This seems contradictory to the report in The World on June 16 that an article by The Oregonian (C22c) revealing the name of the company threatened Project TK that they had worked so hard to get (C22a).
There are no comments in the Minutes for this 20 April 2006 Meeting about the 6 April 2006 shipbreaking forum (B6, B7, B8).
KEYWORDS: CB-Economic Beneftis/Risks, CB-Euphemistic, CB-Forum, CB-Port.
In response to my paper copy of my 8 May 2006 letter to the Port of Coos Bay and my email giving the web page link of this letter to the Port's Jeffrey Bishop and Martin Callery, Callery sent the following email:
Date: Wed, 10 May 2006 16:36:08 -0700
From: Martin Callery MCallery@PortofCoosBay.com
To: Range Bayer rbayer@orednet.org
Cc: Jeffrey Bishop JBishop@PortofCoosBay.com, Mike Gaul MGaul@PortofCoosBay.com, Chris CLAFLIN Chris.Claflin@state.or.us, John Bragg john.bragg@state.or.us, Mike Graybill mike.graybill@state.or.us, Craig Young cmyoung@uoregon.edu
Subject: RE: Economics of Ship Recycling in Coos Bay
Mr. Range Bayer
Newport, Oregon
Thank you for providing your webpage link with the letter addressed to the Port's Executive Director and the Board of Commissioners. It is being forwarded to them with this message.
Please let me clarify the issue of ship recycling as it relates to the current activities of the Oregon International Port of Coos Bay.
This agency does not have a specific proposal from any firm to pursue a ship recycling operation on property owned by the Port in the Coos Bay estuary. And the Port itself is not considering venturing into ship recycling as an industrial operation. Shortly after the first of the year, Port staff had brief discussions with a firm that may be interested in ship recycling in Coos Bay, but they have not provided, nor have we requested, a proposal of any type. In October 2005 representatives from Bay Bridge Enterprises toured a few sites in the estuary while they were visiting several coastal communities. Apparently a site in Yaquina Bay was of greater interest to them for ship recycling, rather than any sites in Coos Bay. Additionally, we are aware that similar contacts have been made with private property owners in the area.
In fact, when the topic of ship recycling was first brought to the attention of the Port's Board of Commissioners they directed staff to provide information for their review that would help them understand the many issues related to this type of industrial operation; environmental concerns and potential impacts, the regulatory structure, the scope of industrial activities, worker/workplace safety, job creation and economic impacts, and the present and future multiple use of the Coos Bay estuary.
With that multi-faceted task as the primary focus, the Port is partnering with South Slough National Estuarine Research Reserve and the Oregon Institute of Marine Biology (OIMB) to provide information about the issues to the Board of Commissioners as well as the community. Within that framework OIMB sponsored a lecture by Dr. Jim Carlton, an international authority on invasive species in early March, and the partner group (Port, South Slough and OIMB) held an information forum in early April to receive and disseminate information about environmental concerns and issues, the regulatory structure in place to protect the environment -- specifically the estuary, and an overview of worker and workplace safety as it relates to handling various contaminated and/or hazardous materials.
The partners are currently planning a second forum to discuss the economic and social impacts related to job creation in this type of industrial sector. It will also look at those issues from a perspective of possible jobs impacts resulting from changes that could occur in the local economy as a result of risks from a ship recycling operation. A date has not been set for the second forum due to schedule conflicts with Port commissioners and others.
One of the purposes of pursuing the information forums is to determine if sufficient regulatory oversight and control exists through state and federal agencies charged with protecting the environment; here again with special focus on the estuary. In this case, specifically as the existing regulatory structure would apply to ship recycling. If the Port's Board of Commissioners believes there is a gap in the existing regulatory structure needed to adequately protect the environment, they can enact ordinances through authorization provided in the Oregon Revised Statutes (ORS) that could better protect this estuary. And under the ORS authorization those ordinances would apply throughout the Port District, including on both public and private lands. Taking this type of action is not something the Commissioners would enter into without serious consideration of all available information.
The Port Commissioners and staff are also aware that Gov. Kulongoski and other elected officials have made it quite clear that if ship recycling is proposed for some location in Oregon it will have to be done in a drydock or graving dock industrial setting.
The observations, opinions and conclusions you have provided are all very interesting and illustrate that considerable work has gone into the research. However, the majority of the material would be primarily applicable to the development and analysis of a sound business plan prepared by a firm or organization that might seek to establish a ship recycling operation in Oregon. It wouldn't really matter whether it was in Coos Bay, another coastal estuary or the lower Columbia River/Portland region. The firm will need to determine what is economically viable in a competitive environment in order to operate responsibly and generate a return on investment. Those are the types of decisions that entrepreneurs are faced on a daily basis when considering new ventures and investments.
If the Port were to receive a proposal for establishing a ship recycling operation on a parcel of leased or purchased Port property or was asked to review the proposed operations procedures on privately-owned land, then Port staff would perform all required due diligence and provide significant input to the Board of Commissioners.
We appreciate your interest in the issue of ship recycling and urge you to continue to monitor this issue and provide information as you feel is appropriate.
Martin Callery
Director of Communications & Freight Mobility
Oregon International Port of Coos Bay
P.O. Box 1215 - Coos Bay, OR 97420-0311
Phone: 541 267-7678 / Fax: 541 269-1475
www.portofcoosbay.com
COMMENTS. Note that "ship recycling" was used 11 times, but no other synonymous term was used. Is Callery using "ship recycling" euphemistically?
Although Callery indicates that economic issues raised in my 8 May 2006 letter are relevant mostly to the shipbreaking company, the Port of Coos Bay would also take a significant economic risk in approving a ship recycling company. Further, the Governor's charge to the Oregon International Port of Coos Bay Commissioners was to "develop a sound business plan" for proposed Port developments. Consequently, it is appropriate for the Port Commissioners to exercise due diligence by investigating the economics of shipbreaking and whether a Coos Bay ship recycling company would have a reasonable chance of success in the unstable and competitive ship recycling industry (see my 8 May 2006 letter to the Port and my 23 May 2006 letter to U.S. Rep. DeFazio).
KEYWORDS: CB-Port, Other-LNG.
Item 6A discusses the Port's acquisition of 1,300 acres from Weyerhaeuser with a loan from the Oregon Economic and Community Development Department and a loan from Umpqua Bank. The Commissioners voted to authorize the Executive Director to sign the contract with Umpqua Bank. The Memorandum of Understanding (MOU) between Jordan Cove Energy Partners and the Port about capital construction and operational costs and services was also discussed.
The only mention of ship scrapping is in Item 8 ("Information Items"): "Letter from Governor regarding ship breaking." There was no mention in the Minutes if there was any discussion of the Governor's letter or if anyone had even read it.
KEYWORDS: Other-LNG, Other-Project-TK.
ABSTRACT. Item 4 includes Public Comments that were mostly about the Jordan Cove LNG facility. In particular, Jody McAffree asked why the Port was able to proceed with the Weyerhaeuser land purchase deal with Jordan Cove Energy without public approval. Further, the Minutes state: "Ms. McCaffrey did not think the Port was doing enough to inform the public of their meetings. She gave a letter to the Port asking that we inform her by phone and email of all meetings and asked that she be sent copies of the minutes as soon as they were complete."
EXCERPT from Item 6A, Jeffrey Bishop's Executive Director Management Report, the Minutes state (boldface added): "Jeff Bishop said that he was going to depart from the report he intended to give tonight in light of some of the comments that were received from the audience. Instead he would go back and recap a presentation that was made at an earlier meeting. He apologized that he did not have the power point presentation tonight that he shared when he originally talked about this. It was circulated on Channel 14 as a power point presentation with graphics. As you know, for the last few weeks the Port has been engaged in considerable negotiations with a number of entities regarding putting together an arrangement to acquire the Weyerhaeuser portfolio on the North Spit. For those who don't know, Weyerhaeuser Corporation has owned for a number of years, approximately 1300 acres of property on the North Spit. Jeff drew the attention to the aerial photograph in the back of the room; he then described the property in question. The large water body on the North Spit (someone pointed it out), is the southern boundary of the property. It stretches back to the peninsula that used to house the pulp mill at the Weyerhaeuser location. For many years the community's entities that are concerned with industrial development have tried to put that property into productive industrial use; however, it has not met the timelines or the needs of the Weyerhaeuser Corporation. This past year when Weyerhaeuser began the process of tearing down the former pulp mill, they came to the point in their history where they thought it was time to divest themselves of property. For the few months Jeff was here before the negotiations started, there were a couple of prospects who were interested in the property, but it wasn't available at that time. The Port currently owns only about 70 acres of industrial land and that is the largest single ownership of land that is available for industrial development that is readily marketable. The property acquisition that has been structured with Jordan Cove, proving to be the financial source of the acquisition, is structured in two ways. The property, 1300 acres, 400 of that being submerged and 900 being upland, is broken into two sections. One is a 145 acre parcel out of the 900 that would be used for the LNG plant site. Just as a point of information, the LNG project was originally proposed to be built on Roseburg property for which they had engaged and entered into a contract with Roseburg and still have that contract in place. The berth that they would have been using would have been parallel with the existing Roseburg ship terminal. The Port's involvement in this deal does not bring LNG to the community; LNG was already proposed and has been proposed for over two years. What is unique about this transaction is it allows the community to leverage this particular facility into the acquisition of the property. Once the deal is consummated, if it is consummated, the Jordan Cove transaction will pay in fee, $11 million for the 145 acres. What would be left over would be a $15 million loan to the State on the remaining property; not on the site of the LNG facilities. The tax increment that would come from Urban Renewal would go to pay the debt service on the balance of the property -- not the LNG facility. That tax increment would come solely from the taxes paid by Jordan Cove; it would not come from any additional taxes, from Coos County. The arrangement that the Port has entered into with Jordan Cove, does indeed require the Port to build a two berth slip. Early on it was envisioned that one side of the slip would be utilized for the LNG facility. The other side would be for a general purpose cargo terminal that would develop into general purpose opportunities to employ local workers. Ms. McCaffree was correct, there was a study done two years that indicated that the initial investment of $40 million for a stand alone terminal was not enough to support debt service. One of the aspects of this particular arrangement that was attractive, is that it allows us to share in the building of two slip berths to reduce cost of the proposed terminal. The Port is actively engaged in pursuing and talking to a number of customers to look at this particular operations dock and we will continue to do so. It is by no means a guaranteed deal at this point. It requires much research and much due diligence to determine whether or not it will be feasible. The Port has two years in this process to work on it. Should the Port build this berth, there is a Memorandum of Agreement that was reached with Jordan Cove that would provide for the payment of what the Port refers to as a tariff. To contrast that with the Federal Tariff, it is not a tariff on the goods and services that are imported to the United States, it is a common terminology used in the Port industry to basically mean rent. The agreement would require that the capital investment and the services and ongoing maintenance of the facility would be paid for through a series of fees. The structure of that would be that the cost would actually go down for the LNG facility in the event that other users such as private industry used the other berth. The purpose behind a public tariff at the facility and the proceeds from that would be to handle the debt and maintenance of the facility. Those are revenue based fees which are not required to be voted on by the public because they are not a general obligation of taxpayers. In other words, if the revenue is not there the bonds do not get paid and there is no recourse to taxpayers for that load. If there was recourse to the taxpayers for that, it would be something that was called a General Obligation bond. Those require a vote of the public. Therefore, since this is self contained and solely paid through fees, it is a revenue structure and therefore not subject to the vote. From a risk litigation standpoint, the deal is protected by a series of Letters of Credit. Jeff apologized for not being clearer earlier as to what a letter of credit is. Letters of Credit are loans that haven't been funded. When the bank issues a Letter of Credit they in essence have agreed that they are going to make a loan to cover an obligation. So when a bank Letter of Credit is established, and the customer defaults, then it becomes an obligation of the bank to fund that Letter of Credit which pays the debt. You structure deals in these particular situations, to where the institution that is pledging the Letter of Credit is very reputable. That being said, no one at any point has ever said that this is perfect and beyond no fault. As you recall during the depression, there were a number of things that did fail. I would submit to you that in the event of that happening, The Port would have a lot more trouble than whether Jordan Cove was paying its tariffs in its facility. That is pretty much the essence of the deal. We will be talking about this at every meeting, from now for the next couple of years. Jeff encouraged everyone to come to the meetings and get information that you want. Jeff's email address is posted on the Port's website as is the phone number. He would be delighted to make himself available for ongoing conversations regarding this particular subject. Jeff understands and fully appreciates that there are opposing views on just about every issue. There are legitimate concerns on both sides. All of the questions have not been completely answered as far as the Port is concerned. The policy and position of the Port, that is the Commission, is that there is a process in place to analyze those issues. There is detailed analysis taking place in regard to the safety issues, in particular to the airport, and the impact on the facility. The Port will continue to monitor those and observe them just the same as everyone else. We are happy that there is interest in pursuing and getting information and we will be right there along with you doing the research."
EXCERPT of Item 10, Comments by Commissioner Caddy McKeown after the Executive Session: "Caddy wanted to thank Elise [Hamner] and The World, for respecting the agreement we had with Project TK for confidentiality on this long road; she appreciated the partnering. Caddy is pretty devastated with the article the Oregonian put out but The World did their part in keeping the confidentiality and she is very grateful for that. The rest of the board agreed."
COMMENT about LNG decision. Mr. Bishop states that the Port's deal does not bring the LNG facility to the community because it had already been proposed--his opinion is debatable.
What Mr. Bishop failed to emphasize is that the Port needs the LNG facility, so that the Port can proceed with the land deal. Consequently, the Port has a very strong vested interest in seeing that the Jordan Cove LNG facility be successfully located on the property that the Port has purchased from Weyerhaeuser.
Mr. Bishop is lawyerly correct that public approval is not legally required for the Weyerhaeuser and Jordan Cove land deal, but developing "community consensus" was part of the Governor's charge to the Port of Coos Bay Commissioners, and they have failed to do so. Further, sound business sense demands that the stockholders (public) be included in such a decision involving a LNG facility because circumventing the public on issues such as LNG leads to distrust of and possible lack of support for the Port of Coos Bay.
KEYWORDS: Other-Coos Bay as Gateway, Other-Fish Plant, Other-LNG, Other-Pipeline, Other-Project-TK.
ABSTRACT. Note that Public Comments were allowed at the start of other Port Commission meetings (e.g., A1a, A5, A6, A8, A9), but at this meeting where there were 14 people who had asked to comment, the public comment period was pushed back, interrupted by the Commission, and each was limited to 4 minutes each.
EXCERPT from Item 4A, Executive Director Management Report (boldface added): "Mr. Bishop [executive director of the Oregon International Port of Coos Bay] went on to say that in lieu of his regular management report, he was going to do a presentation on the history of liquid natural gas (LNG) and answer a series of questions which had been posed to him over the course of working on this project. One of the first questions he was asked was why the Port got involved in the project when there was already a private company and site that Jordan Cove was working with to accomplish their goals.
...
"In the spring of 2005, West Coast Utility became interested in Coos Bay and wanted to set up a second LNG import terminal. This terminal would be much larger than Jordan Cove with over 200 vessel calls per year. Research into this company found they had a reputation for acquiring large acreages and leaving the surplus fallow. Leverage is why the Port was interested in the LNG in the first place. A large energy source is capable of leveraging other industries. They could create significant maritime activity but not to the exclusion of other activity.
...
"In 2005, the Federal Energy Policy Act limited local control in LNG facilities. Both LNG facilities would have been on private property with little or no local control. There is no guarantee that both terminals would not have been built. Accordingly, in entering into negotiations with Jordan Cove to build a slip, the Port took steps to limit the number of terminals by controlling the site the second terminal was being proposed for. In that process, Jordan Cove agreed to move sites; they agreed to leverage their development to secure a large portfolio of industrial land for future industrial development on the North Spit; Jordan Cove agreed to allow the Port to leverage marine facilities to pursue a general purpose cargo terminal for a more diversified maritime business environment; and they agreed to submit to a leased berth with local control. The lease required Jordan Cove to pay taxes; to pay fees to offset costs of services; the lease is binding on Jordan Cove and most importantly it is binding on any of its successors. Without that, it would have been possible that both facilities would have been built with no local control whatsoever. Local control does not give the Port the ability to stop the project; that solely rests with the Federal Energy Regulatory Commission's (FERC) actions. It was a tough decision for the Commission, but because the West Coast Utility's larger project went counter to the mission and values of the Port, the Port stepped in and got involved. So the Port's involvement 1) did not enlarge the project; 2) did not enable the project; or 3) did not insure the project. It simply moved the project. What the community gets out of it is some control; a larger portfolio; and the opportunity to leverage that development and... [ellipsis is from the Minutes] we have a seat at the table. We can use that to influence.
...
"Mr. Bishop said that he has toured two operating [LNG] facilities. He and two Commissioners recently toured one facility that is very similar to the facility proposed here. Mr. Bishop has actually physically examined liquefied natural gas to get a first hand feel of what it looks like. He shared a power point presentation on the recent trip to Japan. The pictures were taken of the visit to Japan with Commissioners McKeown and Smith and their tour of an LNG facility. These pictures show the CEO of the Japanese corporation allowing the Executive Director and Commissioners to get a close up look at LNG; it is shown what happens when you try to light it on fire; or handle it in various other ways; and finally what happened when the gas finally was ignited.
...
"Commissioner McKeown asked the President if she could comment on the trip to Japan. ... She is glad that Mr. Bishop had a chance to comment on the decision that we made a while back between a facility that we had more control over and one that was huge and would have come into the community and sucked the air out because of the massive size. We had an opportunity to stop that development for which we are grateful. We think that Jordan Cove is a good size facility for this Port; it allows the Port to use the land they have purchased to diversify the economy here. We may have one to four different industries to partner with to use that property in an appropriate way. ... Commissioner McKeown commented that after looking at this whole process for two years, personally she is very comfortable with it. She hopes that everyone here will take the time to do the research and get answers from reliable sources and make informed decisions."
EXCERPT from Item 4C: "Martin [Callery, Port Director of Communications and Freight Mobility] continues to meet with Southwest Oregon Trade and Transportation task force which was called into session by Rep. Susan Morgan. At last meeting in Roseburg on Monday, Sen. Verger, Rep. Roblan and quite a few other representatives attended from the regions. There were presentations by Roseburg Forest Products and Harry & David Fruits and Specialty Food and a couple of other local industries talking about their transportation needs and the opportunity they have for growth in their market. Roseburg is very interested in seeing if there are opportunities to move commodity through Coos County that they aren't currently moving through there. They would like to explore moving commodity by barge to the Southern California market."
EXCERPT from Item 4D: "Mr. Bishop said he wanted to comment on one more item in his report. Sometime back, we had a news article that appeared in the World regarding Project TK because there was an article that ran in the Oregonian regarding the Tokuyama Corporation. The Port had been concerned that because of the breach, we would be removed from consideration. We have received word that they will not remove us from consideration, in fact earlier this month we had a visit from them for a site tour of the property. However, the Port did receive news that due to internal planning activities, they were slowing down their site selection process. It would probably be upwards of a year before they made a siting selection. They have enlarged the project over what it was originally and as a result they are going back and reevaluating the engineering and some of the other sites that they had considered and eliminated in the event that one of those sites would be better suited. We continue to work with them and they did say that they are still very much interested in the site from a long term standpoint and will continue to work with us. This company deals in a lot of different things and they make a lot of different products. The facility was originally proposed to make one product. But a lot of different products can branch off from a core process and they are looking at maybe doing one of those other processes here.
"Commissioner McKeown asked if the slow down was possibly to find out if the LNG terminal was going to be permitted. Won't they have to have some kind of partnership with them for power? Commission President asked if the power requirements had changed. The Executive Director said that yes it had. Originally the company had looked for about 40 megawatts of electrical power in the first phase. In the second phase, it would have been 80 megawatts. If they were to look at the other processes, their ultimate build-out could be up to 160 megawatts of electricity. Without the inclusion of an energy source, such as LNG, we couldn't make it. We were also surprised to see where some of the sites are. The Port thinks there is a site in Australia, a site in Canada and they are now also evaluating potential expansion inside Japan."
ABSTRACT of Part of Item 5, Public Comments, p. 8. Steve Jones discussed the Port's feasibility study for a "general cargo terminal" in 2003 that estimated that the cost would be $40 million and that such a facility would not be cost effective at that time. The Port's Jeffrey Bishop noted that the" leverage" provided by the Jordan Cove Energy Project changes the business dynamics of the cargo terminal, so that the Port's costs for the cargo terminal would be greatly reduced. The Minutes state that Bishop indicated that "There will be no slip if the FERC permit is not awarded to the project," so the slip for the proposed cargo terminal depends upon the successful siting of the Jordan Cove LNG terminal.
ABSTRACT from Item 5, Public Comments, p. 10-12. Fred Clark, Phil Keizer, Jody McCaffree, Lee Byer, and Phil LaGesse each independently requested the Port to do an independent study about the proposed LNG terminal.
EXCERPT from Item 6A, "A. Ratification of President's Testimony before FERC and the US Coast Guard on July 11, 2006" (boldface added0: "On July 11, 2006, David Kronsteiner, President, Board of Commissioners of Oregon International Port of Coos Bay gave testimony on behalf of the Port before the Federal Energy Regulatory Commission (FERC) and the U.S. Coast Guard in reference to the Jordan Cove Energy Project L.P. (Docket No. PF06-25-000) and the Pacific Connector Gas Pipeline, L.P. (Docket No PF06-26-000). His testimony spoke to the following four statements:
* Possible environmental impacts
* Preferred routing of the Pacific Connector Pipeline
* Waterway suitability and the facility security assessment
* The commitment of the Port of Coos Bay to cooperatively work with FERC, the U.S. Coast Guard and other stakeholders to support the eventual development of the Jordan Cove Energy Project and the Pacific Connector Gas Pipeline.
Port Counsel, Robert Thomas recommends the ratification of this testimony by the full Board.
Upon a motion by Commissioner McKeown (second by Commissioner Hampel) the Board of Commissioners approved the full Commission ratification of the President's Testimony before the Federal Energy Regulatory Commission and the U.S. Coast Guard regarding Jordan Cove Energy Project.
EXCERPT from Item 6E discusses Oregon Brand Seafood/Peterson Property Sale Agreement--also see C25: "Commissioner Hampel said that at the time the Port took over the fish plant, it was in bad disrepair. If it would have been left abandoned for a couple more years, we would have lost the entire infrastructure. It was really important that the Port and the County partner and now every time you drive by over the bridge, you will see several people with jobs and it is something for the Port and the County to be proud of; thanks to you both."
EXCERPT from Item 6F, "F. Moffat Nichol Professional Services Agreement and Task Order No.1": "The Port of Coos Bay will be the permit sponsor for the marine side channel modifications required to construct a slip, general cargo terminal and turning basin in lower Coos Bay. To stay on track for construction in 2008, permit application should be submitted to the State and Federal Agencies by October of this year.
...
"Discussion: Mr. Bishop said that there are three components to the contract. Jordan Cove is solely responsible for the turning basin and any modifications; there is no Port money involved. For the permitting action related to the slip, because the cost share basis has been identified as 85/15, the cost for that particular segment will be 85% born by Jordan Cove, 15% for the Port. The reason for the 85/15 slip is, and this is where the economies of scale come in, if they were building the slip alone then they would have to build 85% of the structure to begin with. The Port would only bear the cost of 15% because that is the added increment. However, we will get the use of one half of the facility. The float is the difference between 85 and 50. The portion that is directly related to our dock will be totally born by the Port. But all the costs will theoretically be born by Jordan Cove via their option payment that they are paying for the dock that is incorporated into the budget. So in essence, there is no tax dollars involved in any of this action."
This Meeting is also reported by The World in C32a.
KEYWORDS: Other-LNG, Other-Pipeline.
ABSTRACT. This is entirely different than the Questions and Answers about the Memorandum of Understanding between the Port and Jordan Cove Energy Partners in The World on August 2 (C33b).
EXCERPT of top of p. 2 of version available on 19 Oct. 2006: "Port staff is aware of two firms that have shown an interest in the Port of Coos Bay as an inbound receiving point for LNG. Energy Projects Development LLC announced their proposed terminal -- the Jordan Cove Energy Project -- in August 2004. A second potential LNG developer contacted the Port in the fall of 2005 to discuss the availability of North Spit property for a terminal facility. After several brief discussions about the availability of suitable property Port staff had no further contact with the developer. The initial contacts were with the LNG development division of a major western U.S. utility provider. As a standard business practice related to market competition issues, the developer requested confidentiality and the Port is respecting that request."
...
"The size of the industrial site the second LNG developer was seeking would have limited other opportunities for marine or industrial development on the North Spit by removing substantial acreage from the available inventory, and the proposed vessel traffic could have limited development of other commodity movements."
EXCERPT from top of p. 3 of version available on 19 Oct. 2006:
[Question] " 'What if any benefit will natural gas customers in Coos County, the southwest Oregon region or the state receive from having an LNG facility in Coos Bay, especially since it is all going to be shipped out of here via a 36-inch pipeline?'
[Response]"All natural gas consumers in Oregon -- residential, business and industrial -- will benefit from the availability of an additional source of gas for the state. Oregon does not have in-state natural gas resources to meet natural gas-driven energy demand, consequently natural gas consumed in Oregon moves via the Williams Northwest Pipeline system from the northeast British Columbia/northwest Alberta production basin and from gas fields in Wyoming and other Rocky Mountain states. The availability of a significant volume of natural gas from an in-state source should help moderate price fluctuations for all gas users, especially in an increasing demand, tighter supply commodity market.
"However it must be recognized that in Oregon, the Public Utility Commission (PUC) regulates rates and services for residential users and businesses served by investor-owned electric, natural gas and telephone utilities, and a limited number of water companies. The PUC does not regulate people's utility districts, cooperatives or municipally-owned utilities, except in regards to safety issues.
"Since the majority of natural gas customers in Oregon are served by PUC-regulated utility firms, residential and business customer rates will be set by the actions of the PUC as utility firms present proposed rates to the commission for approval/disapproval in rate hearings and then on for eventual adoption and implementation. It should be noted that the PUC bases its approval or disapproval of a proposed rate on the commodity cost, and while increased natural gas availability may not decrease gas prices, that availability could affect future rate increases.
"Industrial natural gas users in the southwest Oregon region and possibly other parts of the state will have the ability to negotiate lower gas prices since their much larger volume purchases of gas are not regulated by the PUC. Industrial users will have the added benefit of lower pipeline transportation costs for long-term gas purchases since the source will be in Oregon."
EXCERPT from bottom of p. 3 of version available on 19 Oct. 2006: "While it is intended that one billion cubic feet (Bcf) per day of natural gas will flow from the Jordan Cove facility via the Pacific Connector Gas Pipeline to interconnect with the Gas Transmission Northwest (GTN) pipeline in southern Oregon near Malin, there will also be an interconnect with the Williams Grants Pass Lateral Pipeline near Roseburg. Additionally, approximately 50 million cubic feet (Mcf) per day of gas is projected to flow via the Coos County Pipeline to also feed the Grants Pass lateral."
EXCERPT of p. 4 of version available on 19 Oct. 2006: "The Port's Vision is to 'promote optimal use of Coos Bay's deep-water port for the enhancement of the economy and quality of life in the region,' and the Port's Mission is as follows: The Port will help build a diversified, healthy, stable regional economy through prudent management of its assets, advocacy for infrastructure improvements and collaboration with other public and private entities."
EXCERPT from p. 24 update added on 19 Oct. 2006:
[Question] "Please tell the people who the experienced LNG and natural gas experts are on Port staff; and what are their credentials?
[Response] "The Port District has never claimed to have LNG and/or natural gas experts on staff. However, the Port does have a competent, experienced and professional staff that has the expertise and skill to perform due diligence on any project. Port management staff has extensive experience in public administration, transportation planning and economic development. The staff also has the ability to secure outside expertise when required. During the past three years various members of the staff have been engaged in extensive research, including ongoing communications with a broad array of people directly involved in the LNG and natural gas industry, maritime safety and security and other related issues. The research and due diligence continues and the information gained is utilized to guide the Port's actions in regards to the Jordan Cove project.
"The Port has long held the position that the FERC permitting process, specifically the Environmental Impact Statement (EIS) and the U.S. Coast Guard coordinated Waterway Suitability Assessment (WSA) will determine if an LNG facility on the North Spit and the transit of LNG tankers are safe and acceptable activities in the Coos Bay harbor. Additionally, the Office of Pipeline Safety of the U.S. Department of Transportation will assess the suitability and safety of any proposed natural gas pipeline route.
COMMENT. This web page was publicized in The World on Sept. 13 (C41a).
KEYWORD: Other-LNG.
KEYWORD: Other-LNG.
EXCERPT: "Recent questions have been raised about whether the Port has the ability to terminate the project simply by denying the property sale. We do not. The option agreement with Jordan Cove, intended to maximize community involvement, allows them to pursue direct purchase of the property from the Weyerhaeuser Company if the Port cannot fulfill the agreement."
EXCERPT from Item 6-G on p. 16: "G. Amendment to Ken Messerle, Coast Consulting LLC contract.
"The Port originally entered into a governmental relations agreement with Coast Consulting and Services LLC in April of 2005. This was to provide governmental relations support for the Port projects at the State level. That agreement was updated in March, 2006.
"Section 2d of the service agreement provides for a mechanism to adjust the monthly retainer fee in December 2006 prior to the coming Legislative Session. Considering the North Spit Development Projects the Port is working on, it is anticipated there will be a large increase in the Coast Consulting work load during the 2007 Legislative Session. Funds are available in the current budget and this adjustment would become effective January 1, 2007.
"Upon a motion by Commissioner Scott (second by Commissioner Smith) the Board of Commissioners approved the amendment to Ken Messerle, Coast Consulting & Services LLC adjusting the monthly retainer of $1,000/mo to $2,000/mo effective January 1, 2007.
COMMENT. There is nothing in the March 2006 Port Commission Minutes (Port A5) about the update of the agreement.
[Return to Table of Contents or go to Proposed Shipbreaking (Ship Recycling) of U.S. Maritime Administration (MARAD) or Navy Ships in Oregon or Washington]
During December 2005-January 2006, Coos Bay's newspaper, The World, had five news stories and one editorial about Bay Bridge Enterprises LLC and their proposal to construct an in-water ship recycling facility at Newport. The World did this in part because Bay Bridge had also considered Coos Bay, and a rumor had surfaced that Bay Bridge was still interested in Coos Bay. Items given below from The World start in February 2006. The World has done extensive coverage of shipbreaking issues with 25 news articles during February-June 2006, mostly by Elise Hamner.
As of July 15, the only articles about shipbreaking/recycling issues at Coos Bay since the Port of Coos Bay announced its interest in February 2006 are in The World, except of a single sentence mention in The Oregonian (B37). Some of the articles also mention LNG and other issues about the Port of Coos Bay and are included as such in the Keyword Index.
B1. Anonymous. 2006. Editorial: Best Government Is an Open One. Feb. 11, Coos Bay World.
KEYWORDS: CB-Editorial, OR-BBE, OR-Kulongoski, Other-LNG.
COMMENT. This editorial came just five days before the meeting in which the Port of Coos Bay announced that shipbreaking companies were interested in facilities at Coos Bay (B2). Also see the June 2006 editorial with a similar message to include the community (B34).
ABSTRACT. At the Port's Feb. 16 meeting, the Port of Coos Bay's Executive Director Jeffrey Bishop read a statement (Port-A2b) about possible "ship recycling" at Coos Bay; "shipbreaking" or "ship scrapping" or "salvaging" are not used. One shipbreaking company interested in Coos Bay is identified in the newspaper article as Environmental Recycling Systems (ERS), but it was not identified in the Port's Press Release (Port-A2b). ERS has a positive sounding name and also a sympathetic story line.
COMMENTS. According to Carlton's Letter to the Editor (B5), this article had originally been published on March 10 and was on the front-page with the headline "Species Invasion Natural." Apparently, the title was changed in the March 13 online version cited here. I do not know if any of the text was also changed. This presentation was organized by the Oregon Institute of Marine Biology (OIMB) at Charleston on the south end of Coos Bay and not in partnership with the Port of Coos Bay (Port-A5: Item 10, Port-A7).
COMMENT. This article reports a March 8 Port of Coos Bay press release that was not available on the Port's web site with the Port's other press releases as of 4 Nov. 2006 or 28 Jan. 2008.
COMMENTS. According to the World's Archives, this Tuesday April 4 article was when the Thursday April 6 meeting was first announced. Two days is a very short notice. The format of using question cards is a way to control the meeting because it does not allow audience members to ask questions directly or to comment.
COMMENTS. This editorial one day before the first April 6 forum about shipbreaking encourages people to attend but does not mention that a longer notification period for the forum is essential for public participation.
COMMENTS. With only two days notice in the newspaper, it is amazing that "almost 100 people" showed up. As of 4 Nov. 2006 and 8 Jan. 2008, I could not find the material that the Port's Callery spoke of in the article on the Port's web site.
COMMENTS. Is the term "ship recycling" being used euphemistically at Coos Bay?
COMMENTS. Scrap metal prices are quite variable and are higher in Texas than on the West Coast, so a shipbreaking firm at Coos Bay would be at a competitive disadvantage in terms of scrap metal sales. Brownville shipbreaking firms also have lower operating costs because they do not use drydocks and have low labor costs, so it is questionable that a Coos Bay shipbreaking company with drydocks would be viable when other shipbreaking drydocks have closed because they were unable to compete (8 May 2006 letter to the Port, 23 May 2006 letter to Rep. DeFazio).
ABSTRACT. Hazardous materials on U.S. Maritime Administration (MARAD) ships to be scrapped include PCB's, asbestos, mercury, residual oils and fuels, ozone-depleting substances, heavy metals, and animal wastes.
COMMENT. Also see General Environmental Concerns about Shipbreaking.
Below is my letter as published in The World with my comment that was edited out by The World in brackets; The World also added "Oregon International" to "Port of Coos Bay' in the first sentence:
The Oregon International Port of Coos Bay's April 6 forum was an important step for the port and citizens to learn more about shipbreaking. It is significant that almost 100 people attended [even though the forum notice was in The World only two days before].
Unfortunately, recycling ships is more complicated than recycling cans. Specially trained and equipped crews need to carefully remove hazardous wastes from ships to avoid injury to themselves and to not contaminate the environment. This can be and has been done, but it also needs to be verified through inspections.
Environmental concerns arose during the Newport ship recycling debate. So Gov. Ted Kulongoski directed the Oregon Department of Environmental Quality to examine shipbreaking operations to ensure that they have environmental protection equal or better than doing ship recycling in a dry dock. However, the DEQ is underfunded and understaffed. So Oregon citizen groups, such as the Northwestern Environmental Defense Center and Columbia, Tualatin and Willamette Riverkeeper groups, monitor permits and test water quality in their areas to supplement DEQ efforts. These citizen groups do this to try to ensure that the Clean Water Act and other laws are enforced.
The Port of Coos Bay is to be commended for holding these forums about shipbreaking in general. But the "devil is in the details." Most people in Coos Bay and Newport probably agree that ship recycling is necessary. Problems arose in Newport about the details of the shipbreaking facility.
Details include the location of the ship salvage site and the history of the ship recycling company. If the Port of Coos Bay decides to proceed in negotiations with a shipbreaking company, it will hopefully hold additional forums. Then details of the proposed operation can be examined and debated.
Range Bayer
Newport
COMMENTS. My submitted statement that the "forum notice was in The World only two days before" was edited out. It surprises me that The World chose to not comment on the short, two-day notice of the forum (B6, B7) and also took this out from my Letter. Does The World condone short notices for public meetings?
COMMENT. The fear of exporting U.S. government ships for scrapping is destabilizing to currently existing U.S. shipbreaking companies because they would be unable to compete (see section D-4 of my 8 May 2006 letter to the Port).
COMMENT. Job safety is a concern in shipbreaking.
COMMENTS. The article states that Port Executive Director Jeffrey Bishop "spent years" at the Port of Tacoma. But Bishop's biography at a Port of Coos Bay web site indicates that he spent only three years there. Readers may mistakenly infer that Bishop was at the Port of Tacoma longer than he was.
ABSTRACT. This article reports statements about the proposed LNG and shipbreaking facilities by candidates for the Coos County Board of Commissioners.
ABSTRACT. This article suggests that it would be difficult or impossible to scrap ships in California because of environmental concerns and permit requirements. Allied Defense Recycling's Gary Whitney is trying to recycle ships in drydocks at the former Navy base at Mare Island near Suisun Bay.
COMMENT. Also see Gary Whitney's efforts at Mare Island in section D-2 of my 8 May 2006 letter to the Port.
COMMENT. In 2003, MARAD gave the contract for recycling 13 ships in England to a company that did not have the necessary permits to do so, and 18 months after the first arrived, the ships are still moored and in legal limbo (see section D-4 of my 8 May 2006 letter to the Port). Shipbreaking company Environmental Recycling Systems that has expressed interest in Coos Bay was working to salvage MARAD ships in Turkey and Mexico in 2004-2005 and is also noted in May 2006 as wishing to partner with a Mexican company to scrap MARAD ships (B30, B39).
COMMENTS. The estimated cost of Eco-docks in Europe was estimated to be $72-79 million in 2005, and there would also be costs for dredging and site preparation. So millions of dollars would be needed from local and the state "levels" (governments?) to construct the Coos Bay facility (see Shipbreaking section in my 23 May 2006 letter to Rep. DeFazio).
COMMENT. This article states that there are currently seven obsolete Navy ships at Suisun Bay that could be recycled. The domestic shipbreaking industry has been unstable (also see Section C of my 8 May 2006 letter to the Port and my 23 May 2006 letter to Rep. DeFazio).
ABSTRACT. Ecomar, a Mexican ship recycling company, is lobbying to salvage U.S. government ships in Mexico.
EXCERPT: "The project has a link to Coos Bay. Ecomar would partner with Environmental Recycling Systems, the Seattle-based company studying Coos Bay for a similar facility, according to ERS President Denny Vaughan, a retired U.S. Navy rear admiral."
COMMENTS. ERS has previously tried to have the U.S. Maritime Administration (MARAD) scrap all their obsolete ships in ERS facilities or partners in Turkey and Mexico, so ERS' committment to constructing and operating a drydock in Coos Bay is debatable, especially since ERS wants local and state funding to construct the drydock (B25).
ABSTRACT. Jeff McKeown, a Coos Bay City Councilor, announced that he would run for Mayor of Coos Bay in November. He indicated that he didn't know enough about ship-breaking, or recycling, to have a definite opinion. Accompanying the article was a picture of Jeff McKeown with his "wife, Caddy McKeown," who is an appointed Port of Coos Bay Commissioner.
COMMENT. Also see B38 about diapering ships at sea to remove invasive species and May Invasive Species Be Introduced into Oregon or Washington Estuaries by Scrapping MARAD's Ships?
COMMENT. Bell's letter does not use "NIMBY" (Not In My Back Yard), and I do not see how The World's choice of title matches the content of Bell's letter. In fact, the content suggests that it would be more properly titled "Next, They'll Come for the non-NIMBY's."
Also see discussion about Timetable for Port's LNG Deal and comments about the Port of Coos Bay becoming a Gateway Port.
COMMENTS. Powerful words, but The World needs to "walk the talk" by holding the Port and the County more accountable than it has. The World criticized the Port of Newport for not including the public soon enough in the shipbreaking issue (B1), yet The World has been silent about decisions by the Port Commission of Coos Bay to approve the Port Commission's land deal with the Jordan Cove LNG developers and with the Commission's attempts to get Project TK with little or no public input before making decisions.
Also see The World's announcements or articles about this meeting (C16, C17, C18, C20, C21).
Only material in entire article about Coos Bay: "An effort to bring ship scrapping to Oregon continues in Coos Bay, but Gov. Ted Kulongoski has made it clear he will not allow ship scrapping except in contained dry docks."
ABSTRACT. Hill had spent 20 years diving under U.S. Navy ships and submarines and comments on Don McMordie's Letter to the Editor (B32) about putting a diaper on ships to be scrapped in the ocean before they enter Coos Bay, so that invasive species would not be brought in.
Please search the Archives of The World for "LNG" or "pipeline" to see many more articles.
COMMENT. This is the first public announcement of the Jordan Cove LNG terminal project
ABSTRACT. Bob Braddock of Energy Projects Development LLC indicates that their company proposes a $150 million LNG terminal and two LNG tankers arriving per month. Concerns about LNG terminals in other areas are also reported at length.
ABSTRACT. Port of Coos Bay executives are paid similarly to other Oregon ports but maintenance workers are paid substantially less than at the Port of Astoria.
ABSTRACT. The Jordan Cove LNG facility was announced in September 2004. Project manager Bob Braddock of Energy Products Development gave a presentation for Coos County business leaders at the South Coast Development Council about the Jordan Cove LNG facility. Plans for the facility changed from one tank to two smaller tanks.
COMMENT. Why didn't Braddock give a presentation to the citizens of Coos Bay before June 2006 (C16, C17, C20)? If Braddock had time for business owners, why not citizens?
Oregon Department of Energy's Liquefied Natural Gas web site states that "On August 8, 2005, President Bush signed the federal Energy Policy Act of 2005 into law. The law contains a provision that the Federal Energy Regulatory Commission (FERC) has exclusive jurisdiction over Liquefied Natural Gas (LNG) import facilities." Also see links.
Grainey, Michael W. 2006. Statement of Michael W. Grainey, Director, Oregon Department of Energy at the US Department of Energy Liquefied Natural Gas Forum, Astoria, Oregon, March 28, 2006. An excerpt:
"Last year at the urging of many in the LNG industry and the Federal Energy Regulatory Commission (FERC), Congress gave sole licensing authority to FERC. The new law explicitly took away the power of the State to make the decision on whether an LNG terminal is sited anywhere in Oregon.
"Oregon had opposed that preemption provision and fought hard the last three years to remove that provision from the bill. However, we were unsuccessful. Congress has made its decision. The sole authority for licensing LNG facilities now lies with FERC."
Waxman, Henry A. Energy Policy Act [EPAct] of 2005 (Pub. L. No. 109-58): Preemption of State Authority over Liquefied Natural Gas (LNG) Terminals. U.S. House of Representatives, Committee on Government Reform, Minority Office, Rep. Henry A. Waxman, Ranking Member. Excerpt:
"[Energy Policy Act] EPAct shifts the authority over siting onshore liquefied natural gas (LNG) facilities from states to the federal government. Previously, states had the authority to site LNG facilities in a manner that guarded the state's interests in land use, public safety, and environmental protections.
"Section 311 of EPAct grants FERC exclusive authority to approve or deny the siting, construction, expansion, and operation of onshore LNG terminals. State efforts to protect public safety or to address ratepayer and environmental concerns are preempted. While the law requires FERC to consult with state and local governments regarding safety concerns, they have no role in the final decision. State and local governments also lose the ability to impose penalties for safety violations at LNG facilities. The Act purports to preserve the rights of states under three specific environmental laws - the Coastal Zone Management Act, the Clean Air Act, and the Federal Water Pollution Control Act - but only to the extent that section 311 does not specifically provide otherwise.
"This provision has significant practical implications for state authority. Sixteen applications for onshore LNG terminals are pending before FERC, and an additional nine potential locations for onshore LNG terminals have been identified by the LNG industry. Each of these applications raise significant safety concerns, including the possibility of a highly destructive explosion in the event of a terrorist attack. Yet state governments now have no authority to require any safety precautions or even to prosecute known violations of federal safety requirements.
"This provision was opposed by state officials from both West Coast and East Coast states, as well as by the National Governors Association."
COMMENT. Although the State of Oregon protested the shift of authority to site a LNG facility to the Federal Energy Regulatory Commission (FERC), the State of Oregon tacitly approved the Jordon Cove facility at Coos Bay with the Oregon Economic and Community Development Department's approval of a loan for the Port of Coos Bay to purchase Weyerhaeuser land that was "contingent on successful siting of the Jordan Cove LNG project."
ABSTRACT. The State of Oregon is unsure of what role it has in siting LNG facilities "since President Bush signed an energy bill giving the Federal Energy Review Commission exclusive oversight of projects such as Jordan Cove."
ABSTRACT. Comments by Governor Kulongoski revealed for the first time that the Asian company interested in locating at Coos Bay is headquartered in Japan.
ABSTRACT. Jordan Cove project manager Bob Braddock spoke at a lunch forum sponsored by the Bay Area Chamber of Commerce Independent Business Operators. The article stated that the planned LNG terminal would be "on 90 acres bought last year from Roseburg Forest Products" and that "negotiations continue with Coos County officials for access to the county's natural gas pipeline to transport gas stored at the terminal."
ABSTRACT. This article reveals that Weyerhaeuser and the Port of Coos Bay were discussing the sale of Weyerhaeuser property.
COMMENTS. The Port Commissioners agreed to sign Letters of Intent with Weyerhaeuser and the Jordan Cove LNG facility without the public or even longshoreman unions knowing about it. But the Governor appointed the Commissioners and directed them to build community consensus for economic development projects (Port-A1a), which the Commission has failed to do (see Timetable for Port's LNG Land Deal).
Also see the Port's Press Release about this meeting (Port-A1c).
COMMENTS. The reference to the Japanese company is to Project TK.
ABSTRACT. Report about meeting of the Oregon International Port of Coos Bay Port Commission on Thursday, Jan. 26 (A2a).
COMMENTS. A Columbia River LNG facility would have better access than a Coos Bay facility to the Portland-Vancouver area and Washington, but not as good of access to the California market. The Coos Bay facility seems dependent on access to the California market.
COMMENTS. The Internet addresses for each of those groups are given in the article, which shows that The World made an attempt to not just give company web sites in favor of their projects. A Feb. 8 press release is Fort Chicago Energy Partners 2006
EXCERPTS (boldface added): "Pacific Gas & Electric announced Wednesday it has joined forces with two other companies to build a pipeline across Oregon to link with a liquefied natural gas terminal now in the planning stages for the Oregon coast. The pipeline could boost tight Western natural gas supplies by 20 percent, PG&E said.
...
"A similar regulatory application and certification timeline was planned for the pipeline, said John Davis, manager of business development for
Northwest Pipeline, a Salt Lake City-based subsidiary of Williams - formerly The Williams Cos. - of Tulsa, Okla. An LNG terminal project cannot file an application unless it has a pipeline outlet to carry the gas away from the terminal, Davis noted, 'so they'll be filing concurrently with us, or maybe a little bit earlier.'
"Williams, PG&E and Fort Chicago Energy Partners of Calgary, Alberta, will be equal partners in the pipeline project, estimated at $750 million to $850 million.
"It will run about 250 miles from the International Port of Coos Bay on the coast through the Cascade Range to the town of Malin in southern Oregon,
where PG&E operates another pipeline running north and south. The proposed "Pacific connector" pipeline would also link to a Williams pipeline that runs through Roseburg, creating a system capable delivering 1 billion cubic feet of natural gas per day to the Pacific Northwest, California and northern Nevada, officials said.
...
"If the terminal and pipeline are approved, they could be completed by 2010 and boost the regional natural gas supply by 20 percent, said Jon Tremayne, PG&E spokesman at the utility's headquarters in San Francisco.
...
"Martin Callery, spokesman for the International Port of Coos Bay, said the [LNG terminal] project will provide the port with new dock facilities and allow it to replace aging and obsolete cargo handling equipment. Port commissioners last October unanimously authorized the purchase of about 1,300 acres of industrial land from Weyerhaeuser Co. with plans to sell or lease a portion to Jordan Cove Energy Project for the proposed LNG terminal. A channel would be dug through the property to provide moorage for ships. The east side would be used for unloading LNG tanker ships while the west side would be used to develop a modern cargo facility for the port."
COMMENT. The LNG terminal deal is tied in with the Port's Gateway project to give the Port modern dock facilities.
COMMENTS. Note that the Port Commission did not move to open the LNG issue for public debate; also see Minutes of Port Meeting (A5).
COMMENT. In addition to this private meeting, it also held at least one other private meeting in April 2005 (C2a).
COMMENT. The State of Oregon by its loan to the Port of Coos Bay for this land purchase as part of Project Phoenix has tacitly given approval for the LNG facility, without the input of Coos Bay residents.
ABSTRACT. Bob Braddock, Jordan Cove Energy Project director, appeared before the Charleston Advisory Committee [Charleston is at the south end of Coos Bay] to advocate a LNG facility on the North Spit of Coos Bay. Although some members of the audience suggested that the natural gas would be "solely" for California, Braddock stated: "All these people talking about the gas only going to California, they're wrongheaded."
COMMENT. The critical word in his statement is "only"; if 0.1% of the gas did not go to California, then it would be true that the natural gas would not be "only" for California. What is relevant is if most of the Coos Bay gas would directly or indirectly go to California, but the arguments seem to be focused only on whether the natural gas would be "solely" or "only" going to California. Indirectly, Coos Bay's natural gas may supply Oregon or Washington and thereby other natural gas that would have been used in Oregon or Washington could be piped to California. The proposed construction of a 36-inch pipeline from the Coos Bay facility to the California border is an obvious sign that a substantial amount of the gas would be going to California (see Keyword: Pipeline).
Atkins, Drew. 2006. Open House to Foster LNG Talks. June 3, Coos Bay World.
These two articles appear to be identical except for the title.
KEYWORDS: Other-LNG, Other-Pipeline.
COMMENT. So this is the first chance for the public to interact with the LNG company? And it is an informational open house, not a debate about whether to construct the LNG facility and associated pipeline or not. Why didn't The World indicate that this was the first and only open house in Coos County for the proposed pipeline (Pacific Connector Gas Pipeline 2006b)?
Also see C17, C18, and C20 for more announcements promoting this meeting in The World--which made a point of publicizing this meeting. Also see the B34 editorial and the C21 article about this open house.
COMMENTS. Like the two articles in C16, editorial C18, and article C20, this announces the open house, not a debate about whether to construct the LNG facility and associated pipeline or not. Also see the B34 editorial and the C21 article about this open house.
COMMENTS. This editorial was two days before the meeting, so it could encourage people to go. It is not a "done deal" yet because federal agencies have yet to approve it, but it is a "done deal" locally as the Port of Coos Bay Commissioners gave their approval to it when they signed paperwork for the purchase of Weyerhaeuser land and Jordan Cove Energy Project paid money for the arrangement. The Port of Coos Bay Commissioners were the best chance that local citizens had to have had meaningful input into the decision about whether the LNG would be approved or not locally, and The World did not point out the lack of opportunity given to constituents by the Port Commissioners.
Also note that The World does not make a point that such a public meeting about the LNG facility should have been held a long time ago. The World writes about the importance of citizen involvement prior to making a decision (B1, B34), but fails in pointing out when this is not done. If citizens don't have a meaningful role in decision-making, can citizens be blamed for giving up?
This editorial also failed to mention that this open house would also be about the pipeline and would be the only one in the Coos Bay area for the pipeline (Pacific Connector Gas Pipeline 2006b).
COMMENTS. Also see C16, C17, and C18 for more announcements promoting this meeting in The World--which made a point of publicizing this meeting. Also see the B34 editorial and the C21 article about this open house.
COMMENTS. The World showed journalistic ability by conducting a survey and reporting the results. But only 7 of 36 people surveyed were in favor of the LNG facility? Is that a majority?
Citizens were not presented with an option of being against the pipeline. If the LNG facility goes through, the pipeline will, too. If the certified route is through their property, the law of Eminent Domain will take away the landowner's choice of not having the pipeline.
The World's June 15 editorial about this meeting (B34) sounded strong in calling for more public involvement, but the Port Commission did not give citizens an opportunity to approve or disapprove the Port Commission's land deal for the LNG facility.
CAPTION FOR STORY on front page but not for online story: "Oregonian: Port fears story will end chance to land polysilicon plant."
COMMENTS. See discussion of Project TK.
EXCERPTS (boldface added): "Japan's Tokuyama Corp. is considering building a $500 million factory near Coos Bay to make the raw material for solar-panel cells, utility and government officials confirm. ... The factory would make polysilicon, a substance also used in microprocessors that is in short supply as global demand soars for solar power.
...
"Two little-known aspects of solar panels drive Tokuyama to consider Oregon: making the raw material requires burning a lot of energy and discharging a lot of salt. Tokuyama is considering the site of a former Weyerhaeuser plant on the Port of Coos Bay's North Spit because it comes with a 4,760-foot pipe that could discharge salt water into the Pacific Ocean. Relatively cheap electricity could come either from Pacific Power or from a cogeneration plant that the Port has scoped out, using natural gas from a proposed transfer station there. 'We've been working with the Tokuyama company for about two years as they have been trying to find a location for this plant,' said Bekki Witt, a Pacific Power spokeswoman.
...
"State economic development officials [who would presumably be from the Oregon Economic and Community Development Department], bound by confidentiality agreements as they offer tax breaks to attract the plant, declined to comment on Tokuyama, as did a Port spokesman. However, Port minutes show that on April 21, 2005, commissioners voted to seek a $25,000 state grant for engineering work related to 'Project TK.' Washington state used the same 'TK' code name for Tokuyama when the company considered a Columbia River site near Wenatchee, said Holly Cushman of the Washington governor's office of regulatory assistance. Despite cheaper hydroelectric power there, officials said, the prospect of seeking a permit to dump salt into the Columbia prompted Tokuyama to drop consideration of the site.
"The Port of Coos Bay received the state grant, which it used to explore the idea of a cogeneration plant producing at least 80 megawatts, according to documents released by the Oregon Economic and Community Development Department. Such plants produce power and steam.
...
"Managers of the proposed liquid natural gas project, which would have its own cogeneration plant, are aware of Tokuyama's site search but have not met with the company, said Bob Braddock, Jordan Cove Energy Project manager. 'If they would come in,' Braddock said, 'we'd love to supply it.'
...
"Unlike box-shaped solar-panel plants or semiconductor factories, polysilicon factories tend to be an eyesore, with steam-spewing cooling towers and piles of raw material. So the Washington site considered by Tokuyama was located out of view near Trinidad, Wash., said Pat Haley, Port of Douglas County director. "I was working very hard to get it," Haley said."
COMMENTS. See discussion of Project TK.
COMMENT. See C27 for a report about this meeting.
COMMENTS. This is another example of actions taken by the Port of Coos Bay Commissioners in executive sessions. However, the Port's discussion of this Oregon Brand Seafood fish processing plant issue is in Port-A10: Item 6E, and the Port appears to have not been as secretive with this issue as the Jordan Cove LNG and Project TK issues.
COMMENT. This five hour long meeting makes it clear that it is very questionable that the Coos Bay community supports the proposed LNG facility. It appears that the Commissioners' actions violate the Governor's charge to them that they were supposed to have "community consensus" for economic development projects (Port-A1a). The Commissioners' actions appear to have divided the community.
EXCERPT: "Captain Patrick Gerrity, the US Coast Guard Captain of the Port for Oregon, emphasized that they have not made up their mind either way in regards to the [Jordan Cove] terminal, and adds that research will be what makes the final determination. 'Is LNG suitable for Coos Bay? I don't know. I really don't know,' said Captain Gerrity. 'Ultimately, we will make a recommendation for the suitability of this project. We'll make the decision from a security and safety perspective factoring in the impact on provisional users of the bay. We'll work diligently to identify and minimize safety and security risks. If we cannot do that, we will advise against the project, I assure you that,' he said."
COMMENT. Will the Coast Guard's idea of minimizing safety and security be adequate? Or will they error on the side of bringing the LNG terminal facility to Coos Bay rather than on the side of safety and security because of the federal government's desire for LNG terminals (see Energy Policy Act of 2005)?
COMMENT. According to Port of Coos Bay staff, this Associated Press story was incorrect and the tanker was a LPG, not a LNG tanker (Port-A10: Item 4A).
COMMENT. This article reports that there is ample opportunity to "comment," but commenting does not mean that citizens have a meaningful role in the decision making process. Will the comments really make any difference to FERC that is under U.S. Congressional instructions to approve natural gas projects in spite of local opposition (see Energy Policy Act of 2005)?
COMMENT. The Communications Director of Williams Northwest knows it can control what information it gives the news media and does so. Under these rules, newspapers merely become publicity agents. Has The World unwittingly become an agent of favorable publicity for the Port of Coos Bay, the Jordan Cove LNG project, and Pacific Connector Gas Pipeline?
ABSTRACT. This article reports a Port of Coos Bay Commission meeting.
COMMENTS. Port Executive Director Jeffrey Bishop's statement is lawyerly true--the Port of Coos Bay does not have any more input than citizens in the FERC process. But if the Port had not signed the sale/lease agreement with Jordan Cove, there would not be any FERC process. The Port tacitly approved the Jordan Cove facility in October 2005 when the letters of intent were signed, in May 2006 when the Port approved bank deals, and in June 2006 when money exchanged hands with Jordan Cove Energy Partners.
The Port has already tacitly approved the LNG deal, but now chooses to be evasive and not take responsibility for its actions. Will The World hold the Port accountable for not including the public in the decision-making process as the The World requested in its June 15 editorial (B34)?
EXCERPT: "The first inkling of the Pacific Connector Gas Pipeline came in February when it was announced that a proposed new gas transmission pipeline would deliver shipped natural gas supplies from Coos Bay through a pipeline system ending about 20 miles southeast of Klamath Falls. The announcement sealed the joining of Williams, Pacific Gas & Electric Corp. and Fort Chicago Energy LP to link a pipeline across southwest Oregon from a proposed liquefied natural gas terminal: the Jordan Cove Energy Project in North Bend. The terminal would convert compressed, liquefied natural gas back to its gaseous form, which could then be delivered through the pipeline at a rate of 1 billion cubic feet per day.
...
"Cost estimates for the proposed 225-mile pipeline range from $750 million to $850 million. PG&E had announced the pipeline could boost Western natural gas supplies by 20 percent.
...
"The Pacific Connector could also bring jobs to Douglas County, said Jeffrey Bishop, executive director for the Oregon International Port of Coos Bay. ... But the boon to the port in terms of shipping, with 80 vessels a year arriving with liquefied natural gas, will be a 200-percent increase in vessel loads, Bishop said."
ABSTRACT. Citizens raised their concerns about the LNG facility and associated pipeline at the Coos Bay City Council meeting. The Coos Bay mayor said it would not be appropriate for them to hold meetings because "This is basically between FERC and the port."
ABSTRACT. This includes questions and answers about the Memorandum of Understanding between the Port and Jordan Cove Energy Partners. This is entirely different than the Questions and Answers PDF document created by the Port's Martin Callery on August 30 (Port-A11).
COMMENT. The Coos County Commissioners joined the Port of Coos Bay (C32a), City of North Bend (C32b), and City of Coos Bay (C33a) governments in failing to take responsibility or to represent their citizens. County Commissioners appear to be more concerned with possible lawyers than real citizens.
EXCERPT (boldface added): "The same day North Bend sent its letter to FERC [Aug. 15], more than a dozen people spoke out against the LNG project at the Coos Bay City Council meeting.
...
"Coos Bay resident, Steve D. Jones, spoke on behalf of Fred Kirby. Jones read Kirby's comments, focusing mostly on [Coos Bay] Councilor Jeff McKeown's support for the LNG project. While Kirby accused Jeff McKeown of making multiple public comments in support of the proposed LNG facility, McKeown said his mind wasn't made up. 'One of the things that gave me a sense of comfort about the project originally, was the Japanese company that's considering locating on the North Spit,' McKeown said. 'That is a $600 million project, and if the LNG facility goes in there that company plans to use the natural gas to produce its energy. That company wouldn't locate there if they didn't consider this to be a safe location.' If the LNG facility and Japanese Tokuyama Corp's polysilicon manufacturing plant are sited on the North Spit, McKeown said the Bay Area would see a huge influx of family-wage jobs."
COMMENT. Jeff McKeown is running for Coos Bay Mayor (B31). In April 2005, he was reported to have asked the project manager of the Jordan Cove LNG facility what could be done to successfully promote it (C2a).
Jeff McKeown may have revealed confidential information from his wife, Port Commissioner Caddy McKeown, about Project TK being a $600 million dollar project. I have not seen the $600 million figure before, and The Oregonian reported that it was $500 million in June 2006 (C22c).
ABSTRACT. This editorial advocates an advisory vote because the public has not been heard.
COMMENT. Also see C37 about the divisiveness about voting. Why didn't The World editorialize back in October 2005 for a public vote when it could have made a difference? After contracts and the Memorandum of Understanding were signed and money exchanged hands is too late. Why didn't The World editorialize about the Port Commission's lack of including the public in the decision-making?
ABSTRACT. The death threat "over the phone from an intoxicated, belligerent woman" was to a Port of Coos Bay official and concerned the proposed LNG facility on the North Spit of Coos Bay.
COMMENT. This publicizes Port-A11.
ABSTRACT. U.S. Rep. Peter DeFazio and challenger Jim Feldkamp met in a debate of the issues held by the League of Women Voters. One of the questions was about LNG.
References are listed alphabetically by the name of the corporation, community organization, or government agency. If there are multiple articles for the same group, then they are put in chronological order. Not all of these references are included in the Keyword Index.
Bradwood Landing LLC. 2006. Resource Report 10, Alternatives. Bradwood Landing Terminal Filings to Federal Energy Regulatory Commission (FERC). Select "display document list" for June 5, 2006, "Bradwood Landing Terminal Resource Reports" and then select "Resource Report 10 Alternatives" at http://www.bradwoodlanding.com/project_status.htm. Or to go to Report 10 directly, select
http://www.bradwoodlanding.com/filing-papers/FERC_PF05-10/t_resource-reports_06-05-06/Resource%20Report%2010.pdf. [This Resource Report and Jordan Cove Energy Project's Report 10 indicate that the proposed Bradwood Landing Terminal on the Columbia River and the proposed Jordan Cove Energy Project are in competition to provide LNG supplies to the Pacific Northwest.]
* Bradwood's web site is http://www.bradwoodlanding.com/.
* The Oregon Department of Energy also has a web site about the Bradwood permitting process at http://www.oregon.gov/ENERGY/SITING/BLLNG.shtml.
Center for Public Integrity. 2006. Hired Guns: Ex-Legislators Registered to Lobby 2005 - Oregon. Center for Public Integrity, Investigative Journalism in the Public Interest. [Ken Messerle was registered in Oregon as a lobbyist for Bandon Dunes LLP, Coos County Airport District, Coquille Indian Tribe, and Oregon International Port of Coos Bay.]
Center for Public Integrity. 2007. Hired Guns: A Comprehensive Look at Lobbying in the 50 States. Center for Public Integrity, Investigative Journalism in the Public Interest. [Also see additional information and links at their "In Your State--Oregon" by selecting Oregon.]
Citizens Against LNG. ("We are the concerned citizens of the South Coast of Oregon who are against the proposed LNG (liquefied natural gas) Import Terminal in this area.")
Daily Astorian: LNG Controversy. (This is a compilation of some, but not all, articles in their newspaper about the LNG controversy in Astoria.)
ECONorthwest. 2006. Forecast of the Net Economic Benefits of a Proposed LNG Terminal in Coos County, Oregon. An Economic Impact Analysis prepared for the South Coast Development Council. Oct. 16.
(See link to "Jordan Cove White Paper" at http://www.scdcinc.org/scdc-studies.htm of South Coast Development Council, Inc.; the direct link to is http://www.scdcinc.org/documents/ECONW-SCDC-LNG-Impacts.pdf. It may also become available at ECONorthwest's web site at http://www.econw.com/)
COMMENT--see How Realistic Is the South Coast Development Council Inc.'s (SCDC) LNG Economic Impact Report?
Federal Energy Regulatory Commission (FERC). For Citizens: How to Get Involved.
Federal Energy Regulatory Commission (FERC). Liquefied Natural Gas (LNG). (Includes links to "Existing and Proposed North American LNG Terminals" and "Potential North American LNG Terminals.")
Federal Energy Regulatory Commission and U.S. Coast Guard. 2006. Scoping Public Meeting for Environmental Issues Related to Proposals by Jordan Cove Energy Project LP and Pacific Connector Gas Pipeline LP. This meeting was at Southwestern Oregon Community College, Coos Bay, Oregon on 11 July 2006. [Patience is required with a slow Internet connection.]
Fort Chicago Energy Partners L.P. 2005. Fort Chicago Announces Investment in Infrastructure Development Firms. July 28, 2005. Web page accessed on 15 August 2006. Their home web site is http://www.fortchicago.com/. According to http://www.canadanewswire.com/en/releases/archive/July2005/28/c5443.html, this Press Release was "NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES" (last accessed on 21 Nov. 2006--it was not available on 28 Jan. 2008.)
Fort Chicago Energy Partners L.P. 2006. Press Release: Fort Chicago Energy Partners L.P., Williams' Northwest Pipeline Corporation and Pacific Gas and Electric Company Propose Major New Gas Transmission Pipeline Project. Feb. 8, 2006. Web page accessed on 3 September 2006. Their home web site is http://www.fortchicago.com/. (Last accessed on 21 Nov. 2006.)
Friends of Living Oregon Waters (FLOW): LNG.
Garner, Bryan A. (Editor in Chief). 1999. Black's Law Dictionary. Seventh Edition. West Group, St. Paul, Minnesota.
Havens, Jerry. 2004. LNG: Safety in Science. January/February 2004. Bulletin of the Atomic Scientists 60(01):30-31. [Not available online on 28 Jan. 2008/]
Havens, Jerry. 2005. Public Hazards of LNG Import Terminal Operations. LNG Review 2005. (Havens is Distinguished Professor of Chemical Engineering and Maurice E. Barker Chair in Chemical Process Safety and the Environmental Fate of Chemicals and Director of the Chemical Hazards Research Center, University of Arkansas. Also Google search "Jerry Havens LNG" to find many more links.)
Jordan Cove Energy Project. 2004. Notice of Intent to Build the Jordan Cove Energy Project Liquified Natural Gas Storage Tank and Importation Facility. Energy Projects Development L.L.C. Nov. 22, 2004.
Jordan Cove Energy Project (Energy Projects Development LLC). 2005. Jordan Cove Energy Project. Presentation at Oregon Energy Facilities Siting Council Information Meeting, January 19, 2005. 43 unnumbered pages that are numbered in PDF file. This is at http://risk.das.state.or.us/ENERGY/SITING/docs/BraddockPresentation.pdf. (Last accessed on 21 Nov. 2006.)
Jordan Cove Energy Project, L.P. 2006a. Jordan Cove Energy Project, L.P. (This is their main web page.)
Jordan Cove Energy Project, L.P. 2006b. About The Project - Terminal Configuration & Design Specifications. Web page accessed on 3 September 2006.
Jordan Cove Energy Project, L.P. 2006c. About the Project-Project Overview. Web page accessed on 15 August 2006.
Jordan Cove Energy Project, L.P. 2006d. Community Benefits. Web page accessed on 15 August 2006.
Jordan Cove Energy Project, L.P. 2006e. Initial Draft Environmental Resource Report: Resource Report 1 - General Project Description. June 2006. Docket No. PF06-25-000. Jordan Cove Energy Project Regulatory Filings to the Federal Energy Regulatory Commission (FERC) are at http://www.jordancoveenergy.com/filings.htm
Jordan Cove Energy Project, L.P. 2006f. Initial Draft Environmental Resource Report: Resource Report 10 - Preliminary Summary of Alternatives - Public. September 2006. Docket No. PF06-25-000. Jordan Cove Energy Project Regulatory Filings to the Federal Energy Regulatory Commission (FERC) are at http://www.jordancoveenergy.com/filings.htm. [This Resource Report and Bradwood Landing's Report 10 indicate that the proposed Bradwood Landing Terminal on the Columbia River and the proposed Jordan Cove Energy Project are in competition to provide LNG supplies to the Pacific Northwest.]
Jordan Cove Retort. (Group opposed to the Jordan Cove Energy Project.)
Messerle, Ken. 2003. Senator Messerle Announces Political Future. October 21 Press Release.
Messerle, Ken. 2006. [Oral testimony listed for Ken "Meserly".] P. 47-48 in Federal Energy Regulatory Commission and U.S. Coast Guard Scoping Public Meeting for Environmental Issues Related to Proposals by Jordan Cove Energy Project LP and Pacific Connector Gas Pipeline LP at Southwestern Oregon Community College, Coos Bay, Oregon on 11 July 2006.
Kronsteiner, David. 2006. [Oral testimony.] P. 53-56 in Federal Energy Regulatory Commission and U.S. Coast Guard Scoping Public Meeting for Environmental Issues Related to Proposals by Jordan Cove Energy Project LP and Pacific Connector Gas Pipeline LP at Southwestern Oregon Community College, Coos Bay, Oregon on 11 July 2006. [See discussion of Kronsteiner's testimony "on behalf of the Port," prior to it being ratified by two other members of the Port Commission.]
Mannan, M. Sam, Jane Y. Wang, and Harry H. West. 2005. LNG Safety, An Update on Recent Issues. LNG Review 2005. (The authors are all with Mary Kay O'Connor Process Safety Center, Chemical Engineering Department, Texas A&M University System.)
Onward Oregon. Liquid Natural Gas Import Terminals in Oregon.
Oregon Department of Energy. 2005. Project Order: Jordan Cove LNG. March 24, Oregon Department of Energy.
Oregon Department of Energy. [2006] Liquefied Natural Gas and Oregon. Energy Facility Siting.
Oregon Department of Environmental Quality (DEQ). 2006. Fact Sheet: Coos Bay Natural Gas Projects Proposed. DEQ 06-WR-005. Their web page was last updated on 5 April 2006.
Oregon International Port of Coos Bay Home Page at http://www.portofcoosbay.com/.
Oregon Legislature. 1999a. House Committee on Commerce, Subcommittee on Trade and Economic Development. March 8 Hearing, Room 350. [Search for "HB 2832"]
Oregon Legislature. 1999b. House Bill 2832: A-Engrossed. 70th Oregon Legislative Assembly--1999 Regular Session.
Oregon Legislature. 2003. Staff Measure Summary: [Senate Bill] SB 321. 72nd Oregon Legislative Assembly--2003 Regular Session.
Oregon Legislature. 2007. Frequently Asked Questions: How Much Are Legislators Paid? [Select "How Much Are Legislators Paid?" link]
Oregon Rural Electric Cooperative. 2003. Status Summary Report: 2003 Oregon Legislature. [SB 0321 is on p. 9.]
Oregon Public Utility Commission. 2005. 2005 Natural Gas Price Factors. (Also see their "How Utility Rates Are Determined.")
Pacific Connector Gas Pipeline. [2006a] Pacific Connector Gas Pipeline. Web page accessed on 1 July 2006. This web page has since been updated with some new information in 2007.
Pacific Connector Gas Pipeline. [2006b] Open Houses Held in June 2006. Web page still available on 28 Jan. 2008.
Pacific Connector Gas Pipeline. [2007] Pacific Connector Gas Pipeline. Web page accessed on 3 February 2007.
Polakovic, Gary. 2006. Huge Baja Project May Chill Others' LNG Plans: Mexico's Easier Permit Process Allowed San Diego-Based Sempra Energy to Get a Head Start Over Those Considering Plants in California. Oct. 9, Los Angeles Times. (This is available at http://groups.yahoo.com/group/LNGsafety/message/3391.]
Public Citizen. Proposed and Recently Approved Liquefied Natural Gas Facilities (by company): Energy Projects Development, LLC. Public Citizen (a national non-profit public interest organization.)
Ramsayer, Kate. 2005. LNG Expert Warns of 'Half-Mile-Wide' Fire. Terrorist Attack Could Cause Devastation, Visitor Says. August 16, The Daily Astorian. (Although they charge for old articles, The Daily Astorian has chosen to keep some of their LNG articles available for free as a public service: LNG Controversy.)
Ratepayers for Affordable, Clean Energy (RACE). (California-based but this web site has information relevant to Jordan Cove Energy Project.)
Sandia National Laboratories. 2004. Guidance on Risk Analysis and Safety Implications of a Large Liquefied Natural Gas (LNG) Spill Over Water. Sandia Report SAND2004-6258. Sandia is a multiprogram laboratory operated by Sandia Corporation, a Lockheed Martin Company, for the United States Department of Energy's National Nuclear Security Administration under Contract DE-AC04-94AL85000.
Santa Barbara Grand Jury. 1997. Buellton Union School District [case at http://www.sbcgj.org/96-97/BUSDl.html. This is the web site of the Santa Barbara (California) Grand Jury at http://www.sbcgj.org/.
State of Oregon. [no date] Membership Handbook for Boards and Commissions. Governor Theodore R. Kulongoski, State of Oregon. [PDF Document Properties for the file indicates that it was created in July 2005.]
Umpqua Watersheds' Natural Gas Pipeline Proposed through Southern Oregon.
U.S. Energy Information Administration. 2001. Natural Gas Markets: Mid-Term Prospects for Natural Gas Supply. Chapter 3: Mid-Term Natural Gas Supply: Analysis of LNG Imports. SR/OIAF/2001-06, Release Date: December 14, 2001. U.S. Energy Information Administration, Office of Integrated Analysis and Forecasting, U.S. Department of Energy.
United States Energy Information Administration. 2006. Oregon Natural Gas Residential Price (Dollars per Thousand Cubic Feet) [for 1989-July 2006]. U.S. Energy Information Administration, U.S. Department of Energy. [Information last updated on 28 Sept. 2006.]
Williams Northwest. 2006. Pacific Connector Gas Pipeline Project. In Connection Northwest, October 25, 2006, Third Quarter 2006. [Link updated on 15 Dec. 2007.]
Williams. 2007. News Release: Pacific Connector Gas Pipeline, LP Solicits Commitments for Pacific Connector Project. February 01, 2007
World, The (Coos Bay newspaper). Search Archives since 2003 for "LNG" and "pipeline."
Yahoo Groups. LNG Safety. (Nonmembers can read messages. "This group is dedicated to sharing Liquefied Natural Gas (LNG) safety and siting information among community activists, local government officials, industry experts, and regulators nationwide." To see material specific to Oregon, Search for "Oregon" in search box below photo of LNG tanker.)
Yahoo Groups. LNG Terminal-Pipeline in Southern Oregon. [This group is concerned with the proposed Liquefied Natural Gas (LNG) terminal proposed for North Bend/Coos Bay Oregon, and the 231-mile long, 36" diameter pipeline from Coos Bay to Malin, Oregon.]
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Email comments to Range (Richard) Bayer, Bayer Research, P. O. Box 1467, Newport, Oregon 97365 USA.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .