December 6, 2012
By Don Jenkins NewsReview
In a finding that may bolster the argument for building a pipeline across Douglas County, natural gas exports would boost the U.S. economy, according to a report released Wednesday.
The study, commissioned by the U.S. Department of Energy, warned there would be “winners and losers,” but concluded that overall the country would profit as foreign countries bought U.S. natural gas.
The DOE took no position on the study, done by NERA Economic Consulting, but said it may influence regulators considering export proposals, including the Jordan Cove Energy Project in Southern Oregon.
Two companies propose building a 234-mile pipeline through Douglas, Klamath, Jackson and Coos counties to transmit natural gas to a terminal at the International Port of Coos Bay.
Port spokeswoman Elise Hamner said today the port hoped the report will help developers get approval from the Federal Energy Regulatory Commission.
“This is a positive development,” she said. “It’s just an incredibly good economic impact to have a development like that here.”
The port previously had commissioned a study that found extensive economic benefits for Southern Oregon, including 120 permanent jobs paying an average of $82,000 a year associated with the terminal.
The new study takes a broader look at the economic effects of licensing some or most of the 20 active proposals in the U.S.
Two South County landowners opposed to the pipeline said today the new study didn’t take into account many of their concerns and focused too much on the benefits gained by natural gas developers.
“Obviously, this report is slanted toward big industries. Multinational corporations will profit, families won’t,” said Days Creek landowner Francis Eatherington, whose property the pipeline would cross.
Tenmile property owner Frank Adams said questions remain about environmental costs, the loss of his and others’ private property and the long-term effects of not retaining natural gas for domestic use.
“Why should we sell our children’s heritage?” he asked. “Why shouldn’t we utilize that in our own country?”
DOE asked for the report because of the explosion in proposals, a reflection of changing market conditions. Until early this year, the companies behind Jordan Cove, Williams Northwest Pipeline and Veresen Power proposed importing natural gas to meet U.S. demand.
Efforts to reach a Jordan Cove spokesman today were unsuccessful.
According to the study, the country would profit overall as wealth was transferred to the United States from other countries, increasing gross domestic product by as much as $47 billion in 2020. The study concludes that the more gas is exported, the greater the benefits.
Winners would include owners of natural gas resources, their shareholders and workers employed in producing and exporting natural gas.
The study, however, also confirmed earlier findings that exports would increase natural gas prices in the U.S. — by 25 percent over five years if exports increase significantly. The increase in natural gas prices would increase coal consumption, the report found.
The report warned that job losses would occur in energy-intensive industries and that exporting natural gas would not increase, or decrease, the total number of U.S. jobs.
“Impacts will not be positive for all groups in the economy,” according to the report. “Households with income solely from wages and government transfers, in particular, might not participate in these benefits.”
Sen. Ron Wyden, D-Ore., who has been critical of proposals to export natural gas, focused on the potential for rising energy costs in the U.S.
“Broadly speaking, the study appears to confirm that exports of LNG will raise the domestic price of natural gas,” according to a statement released by his office.
Eatherington said the study appears to have given short shrift to the effects of higher energy costs on families. Eatherington, the conservation director for Cascadia Wildlands, also criticized the report for not addressing the environmental costs of climate change or hydraulic fracking, which involves blasting shale rock with water, sand and chemicals to release gas and oil.
The process has increased natural gas supplies, but critics say the process pollutes groundwater and may even trigger earthquakes.
“Clean drinking water is an economic issue that should have been considered,” Eatherington said.
The report, Eatherington and Adams noted, also doesn’t address the financial impacts on landowners who would be being forced to grant right-of-way to pipelines for a small payment.
The DOE will take initial public comments on the study until Jan. 23. A period to reply to comments will be accepted from Jan. 25 to Feb. 25.
Comments may be filed by email, LNGStudy@hq.doe.gov, or mailed to U.S. Department of Energy (FE-34), Office of Natural Gas Regulatory Activities, Office of Fossil Energy, P.O. Box 44375, Washington, D.C., 20026-4375.
The entire report can be read here DOE study