The company told employees of its decision Wednesday rather than making a formal announcement, according to ConocoPhillips spokeswoman Natalie Lowman.

But word spread quickly through the community which has suffered other economic downturns in recent years, reaching lawmakers in session in Juneau.

The closing of the plant didn’t go over well at the state Capitol, where lawmakers learned of it late Wednesday afternoon through friends, staff and constituents.

“It’s a sad day when we shut down an export facility knowing that we have 35 known (trillion cubic feet) of gas on the North Slope that’s just 800 miles away and one of the things we’re looking at is importing LNG from some foreign country,” said House Speaker Mike Chenault.

The ConocoPhillips plant is “right down the street” from the Nikiski Republican’s house and he grew up with many of the workers who will lose their jobs, he said.

“I can only imagine what their families are going through,” Chenault said from his Juneau office Wednesday evening.

The plant has been a mainstay of the Kenai Peninsula community for more than 40 years. Lowman said at its peak it shipped 64 billion cubic feet of gas a year to Asian markets, primarily Japan. But in recent years shipments have dwindled as other supplies of LNG have flooded the Pacific Rim and the company has only been sending out a single ship.

The Nikiski plant recently received an extension from the federal government for its export license allowing shipments through 2013. But Lowman said the license was contingent on getting contracts and the contracts just weren’t there.

“LNG market conditions have deteriorated so continued operation of the facility for export was not economically feasible,” she said. “There’s a glut of LNG in Asia right now.”

Natural gas production from the company’s Tyonek and Beluga facilities will continue and the company will continue to supply natural gas to Southcentral utilities, she said, adding that it was too early to say whether supplies to the local utilities might increase given that some gas would no longer be exported.

The Nikiski facility is not being abandoned but simply mothballed, she said, and the company intends to keep it in good shape so that it could one day be reopened as an export facility or reconfigured and turned into an import plant.

Utilities and state natural gas experts have recently been studying the idea of importing LNG to make up for shortfalls in natural gas that are predicted to occur as soon as 2013.

The liquid gas would have to be “regasified” for use in the utilities’ generators and one plan that has been talked about involves using the Nikiski plant for that purpose.

The Railbelt has long depended on plentiful supplies of relatively cheap natural gas for electricity and heating. And gas reserves are still thought to be fairly large. But production has been falling because the price of gas was so low that companies didn’t deem it economically viable to sink new exploratory wells and bring new fields into production.

Now the scramble is on to bring more natural gas to the Railbelt, either from the huge North Slope reserves or new Cook Inlet production that the state is trying to spark with tax credits and other incentives. But energy experts say any new projects that might be launched wouldn’t come on line in time to save the region from a gas shortfall expected to hit in 2013. Importing LNG is a reality, they say.

Sen. Bill Wielechowski, an Anchorage Democrat who has specialized in energy issues, says the “silver lining” in the closure of the Nikiski LNG export facility is that it will free up more gas for Southcentral.

“It’s a pretty significant amount of gas that I think will help alleviate some of the problems we’re projecting for Southcentral,” he said.

But the problem, Wielechowski and Chenault say, is the “deliverability” of the gas in winter when the utilities need it most. There is currently no storage facility that allows the companies to produce extra gas in the summer and store it for the winter when utility loads are highest and often spike on the coldest days.

Chenault said the Nikiski plant was a “thermos bottle so to speak” because when the utilities needed extra gas to keep the lights on in Railbelt homes and businesses, they could draw on supplies that were going to the plant.

“The LNG plant provided that backstop on those cold winter days,” Chenault said.

Both Chenault and Wielechowski anticipated that the Legislature would take a close look at what happened in Kenai and the implications for other issues.

Wielechowski said he thinks the plant closure will surface in the debate over whether to revamp Alaska’s oil tax structure because of the lessons to be learned about tax credits and incentives and whether they really help promote more investment and production. He noted that Cook Inlet gas producers have very low taxes and the state subsidizes 65 percent of the expenditures in Cook Inlet yet the plant was deemed to be uneconomic.

“I think what it says is there’s a lot more to the oil and gas business than just taxes,” he said.

Chenault said he has asked the House Resources Committee chairman to “dig into” the situation ConcocoPhillips was facing with the LNG exports, the administration’s role and what the state has done or could have done to help keep the plant in business.

Gov. Sean Parnell issued a prepared statement through his spokeswoman regarding his focus on helping the displaced workers. “While we understand the LNG export market to Japan is a tough one, our first concern is for the Alaskan families who have lost jobs,” the governor said. He added that the state Department of Labor will be working with the company and the community to assist with job information and referrals.

U.S. Sen. Lisa Murkowski also issued a statement expressing concern for the workers and underscoring her oft-repeated theme of the need to break open new development on the North Slope.

“The closure of the LNG plant will leave a huge hole in Kenai’s economy and my first thought is for the employees and their families, many of whom are wondering what they’re going to do now,” Murkowski said. “This announcement highlights the urgent need we face to find a way to commercialize our North Slope gas reserves and create the kind of economic growth that will keep families in Alaska.”

Chenault said the community is still suffering from the closure of the Agrium fertilizer plant three years ago that took about 300 jobs.

“It’s bad news upon bad news. Over the past few years, to take that amount of jobs out of a community our size.”

He pointed out the ripple effect that begins with money spent by the company and the workers in the community and carries through to donations to local civic groups and charities.

“This is not a very good day for the state,” Chenault said.

Contact Patti Epler at patti@alaskadispatch.com.

Link to Original Article

Parke couple feeling burned by pipeline company
Year after gas explosion, Earls are still waiting for settlement

Howard Greninger
The Tribune-Star

ROCKVILLE — It was a year ago this week that Gary J. and Sharon L. Earl saw a huge cloud of smoke near their Parke County home, as flames reached as high as 700 feet into the air and were visible for miles.

“It was a horrifying experience. I was just coming home with the grandkids in the back seat. You could see it from Bellmore and even [Indiana] 47,” Sharon Earl said, recalling May 5, 2009.

It was about 4:22 p.m. when a 24-inch natural gas pipeline exploded not far from the Earls’ house, about 3.6 miles northeast of Rockville, releasing about 7.4 million cubic feet of natural gas, according to the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration.

It caused a section of pipe about 10 feet in length to be blasted out of the ground, leaving a crater. The ensuing fire torched hundreds of trees and 49 homes were temporarily evacuated within a 1-mile radius of the blast.

The PHMSA indicated a possibility of external corrosion in its corrective action order to Panhandle Eastern Pipeline Co., issued May 13, 2009.

The Sunday prior to the explosion, Gary Earl was on a hill in a vehicle with his grandchildren near where the explosion happened. “Just 48 hours prior to the explosion, I was on that hill. I wouldn’t be here today if I was there when it exploded,” he said.

Since that blast, the Earls have documented costs to their restore their property to pre-blast conditions and have been trying, unsuccessfully, to get Eastern Panhandle to cover those costs plus other damages.

Dark, burned trees can be seen along the back end of their property. While they own 200 acres, about 8 acres were engulfed in flames. Those trees now pose a potential danger of falling, especially along a road the couple uses to access a private lake on their property.

In addition, the Earls would often search for mushrooms or ginseng roots among those trees.

“We can’t go in these woods; it’s too dangerous,” said Sharon Earl.

The Earls are seeking to have Panhandle Eastern cut down the burned trees, with new saplings planted in their place.

Another concern comes from large chunks of concrete, used on the original natural gas line from the 1940s, which are strewn across their property. The Earls have spent $12,000 to $15,000 to re-side their house, as siding on the west side melted from the blast, as well as adding rock on a road to access their property.

In addition, the trees that burned had been placed in a state timber management plan. The trees were to be maintained for a future timber harvest.

“We will never see a dime of profit off the trees that were burnt,” Gary Earl said. “That was part of the program that makes the land work for you. That was part of our retirement program.”

Gary Earl said he was more than accommodating in allowing Panhandle Eastern access to repair the damaged line shortly after last year’s explosion.

“They led us to believe they would repair all of this, but once the gas was flowing again, they said it was too rainy and then three days later, they took everything out,” he said.

Panhandle Eastern, in a Nov. 18, 2009, letter, declined to accept an offer for settlement from the Earls and offered to go to a non-binding mediation. The Earls say they have an original right-of-way agreement from the 1930s, which calls for a binding mediation, with each side showing costs. If an agreement is not reached, a third party, selected by both the landowner and company, makes a final decision.

It was in such a meeting that Sharon Earl said the gas company’s attorney simply ended the session and walked out.

“Our attorney was outgunned,” Sharon said. “We are hiring a different attorney. We are pursuing it.” The Earls meet with the new attorney in early June.

“They are bullies, that is how I see it,” Sharon Earl said. “We don’t need their money to live. It is just making right what they have destroyed and abiding by an agreement they made” in the original right-of-way agreement.

In addition, the Earls said they have notified the gas company of another potential problem, a spot about 350 feet from their home where land has subsided next to what is called the “400 line.” The company has since put up an orange-colored fence around that spot.

John Barnett, spokesman for Panhandle Eastern Pipeline Co., said he could not specifically comment on any action involving the Earls as they “have their own legal counsel. We have tried to be a good neighbor since the pipeline was built in that area and work with all of the neighbors to resolve any conflict,” Barnett said.

Barnett said the pipeline was reopened on May 26, 2009, initially at a 20 percent reduction in pressure as required by the PHMSA.

“The line is now in service operating at a 10 percent reduction in pressure, at 90 percent of our operating pressure as we continue to work with the PHMSA, which oversees that,” Barnett said.

“We replaced a lot of pipeline in that area. We replaced 634 feet of pipe, which included the damaged section,” Barnett said.

On the 400 line, Barnett said, “There is nothing wrong with the 400 line. There is some subsidence in that area and that is why we put the safety fencing up, to try to block it off so that somebody didn’t accidentally drive some machinery, a tractor or a car over that and cause some problems.

“We did have a geophysics firm into look at that site and they are currently evaluating it. They took all sorts of measurements and they will propose whatever remediation measure they feel is appropriate,” Barnett said.

The Earls said they are accustomed to having pipelines cross through their land, which has been in Gary Earl’s family for three generations. The property now has five natural gas lines that cut through their property.

“We understand that it is part of living in the United States to have utilities and we understand the risk, but the obligation and legal responsibility is to make us whole again. We’re the injured party here. It’s sad. It makes you disillusioned about how you think things are done, which should be the right, moral, ethical way,” Sharon Earl said.

Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com

http://tribstar.com/news/x1341935857/Parke-couple-feeling-burned-by-pipeline-company

NorthernStar Natural Gas suspends development of its Bradwood Landing LNG import terminal

           
PORTLAND, Ore. – NorthernStar Natural Gas has suspended development of its Bradwood Landing liquefied natural gas import terminal near Astoria, Oregon.
 
“The extended delays in the processing of state and federal permits for Bradwood Landing and the difficult investment environment have forced us to suspend development,” said NorthernStar Natural Gas President Paul Soanes. “In particular, the challenging regulatory environment gives investors pause, especially considering that Bradwood Landing would have such a positive impact on the Northwest’s economy and environment while supporting the region’s transition to renewable energy by providing a new source of reliable and affordable natural gas.”
 
Since its inception, Bradwood has worked to ensure it will provide a significant and sustainable net benefit for the lower Columbia ecosystem, and serve as a model of sustainable development. Using best available science and recovery plans, the project included innovative measures to avoid and minimize impacts, robust mitigation, and a $59 million voluntary (but legally binding) Salmon Enhancement Initiative: the largest private investment of its kind ever proposed for the region.
 
“While we’re disappointed, we are truly grateful for the tremendous support the project received from citizens in Clatsop County and Oregon’s business and labor communities,” said Mr. Soanes. “Bradwood Landing is a great example of a project that business and labor came together to support. Not only would it have created hundreds of jobs, but it would have provided a needed new source of natural gas, which would have helped stabilize energy costs for thousands of businesses.”
 
Initial development work on Bradwood Landing began nearly six years ago. Bradwood is the site of the former Bradwood lumber mill, company town and has a natural deep-water port. Bradwood Landing received its FERC certificate order September 18, 2008 after an extensive scientific and technical review, which took three and a half years and included an official record in excess of 50,000 pages. On March 20, 2008, the Clatsop County Board of Commissioners approved Bradwood’s consolidated land use application on a 4-1 vote after a nine-month public process.
 
Earlier this year, Bradwood reached a key milestone when formal consultation began under the Endangered Species Act with the National Marine Fisheries Service and the Federal Energy Regulatory Commission. Previously, the U.S. Coast Guard determined that the Columbia River could be made suitable for the LNG marine traffic associated in its record of decision dated April 24, 2009, provided full implementation of the risk mitigation measures detailed in the Waterway Suitability Report are accomplished. Those measures were included as conditions when FERC issued its Certificate Order for the Bradwood Landing LNG terminal in September 2008.
 
Bradwood Landing’s coalition of supporters included the Oregon AFL-CIO, the Columbia Pacific Building Trades Council, the Washington State Building and Construction Trades Council, the Oregon Machinists Council, the Washington Machinists Council, Carpenters Local 1707, the International Longshore Workers’ Union (Columbia River Oregon Area), and the Steamship Operators Association.
 
Bradwood Landing and its associated 36.3-mile pipeline would have provided a new source of natural gas directly into the Oregon and Washington natural gas market. It would have created more than 450 jobs over three years of construction and 65 permanent jobs while contributing more than $7.8 million annually in taxes to Clatsop County. An analysis of the effects of increased natural gas supply by former University of Oregon economist Dr. Phil Romero, showed that Bradwood Landing could reduce the wholesale cost of natural gas by 13 percent. Dr. Romero’s analysis showed this decrease in energy costs would help support the creation of between 5,100 and 20,300 jobs.

###

Charles H. Deister || Director, Media and Government Relations || NorthernStar Natural Gas || (503) 949-5762 || CDeister@NSNG.com

http://www.bradwoodlanding.com/content1103

By Guest Columnist

February 03, 2010, 7:05AM

By Nick Engelfried

Suppose you had one month to address Oregon’s biggest challenges, from raising education standards to maintaining our competitiveness in the increasingly crowded green economy. This month the Oregon Legislature has just such a chance before it, as lawmakers meet in a special  session.

Given the stakes, you’d hope legislators would use the limited time of the special session to make concrete deliverables in the realms of education, economic vitality and environmental safeguards. You might not want your elected officials devoting the session to a resurrected version of a bill that failed to pass in 2009, and which redefines the language in relatively obscure land-use codes.

But then, you probably haven’t given thousands of dollars’ worth of campaign contributions to your legislators. You’re not Northwest Natural Gas.

Last year, House Bill 3058 failed in the Oregon Senate, but managed to make a name for several legislators as allies of the controversial liquefied natural gas industry. Dubbed the LNG fast-track bill by environmentalists and landowners, it would have speeded up the process by which LNG companies and other corporations apply for permits to begin environmentally destructive work on private land.

HB 3058 went down in flames, but not before The Oregonian published an investigation of the gas industry’s power in politics, reporting that Northwest Natural donated $210,000 to political candidates since the beginning of 2008. With the Legislature poised to take up a new version of the LNG fast-track Bill this month, it’s time to ask just how long the gas industry will be allowed to guide Oregon politics.

-Like last year’s fast-track bill, this month’s Senate Bill 1020 has been presented as unrelated to LNG. Yet the truth is SB 1020 is a windfall to the LNG industry and would directly benefit Northwest Natural. Along with out-of-state energy giant TransCanada, Northwest Natural is backing the controversial Palomar LNG pipeline through Oregon. With environmental and land- rights activists opposed to the project, the future of Palomar is far from certain. SB 1020 could give it a shot of adrenaline. With big money sitting on the outcome, the gas industry has set its sights on passing an LNG fast-track bill.

As a member of the steering committee for the Northwest Natural Accountability Project, I’m  concerned about the company’s undue influence in politics. Through the project’s “Hey! NW Natural” campaign, environmentalists, landowners, students and stakeholders are pushing Northwest Natural to protect the interests of its customers, who are adversely affected when a corporate lobby decides which bills the Legislature takes seriously. In the wake of a U.S. Supreme Court ruling that corporations can give unlimited funds directly to political candidates, this cause has become all the more important.

So as lawmakers assemble for the special session, take a moment to ask yourself who your elected officials are representing. They should be serving you and the countless other Oregonians who voted them into office. Anyone got $210,000?

Nick Engelfried lives in Hillsboro.
http://www.oregonlive.com/opinion/index.ssf/2010/02/high_stakes_lng_and_the_legisl.html

SAN JUAN, Puerto Rico – Coast Guard Marine Investigators are investigating the cause that led to the grounding of the 920-foot double-hulled Liquefied Natural Gas (LNG) tank ship Matthew Tuesday.

The Norwegian flag tank ship grounded at 6 15 a.m. and was later refloated Tuesday morning, approximately a half nautical mile southeast of Cayo Caribe near Guayanilla, Puerto Rico. There are no reports or sightings of pollution at this time.

The vessel was later refloated whent the tank ship crew transferred cargo from the vessel’s forward to its aft cargo tanks allowing the vessel to successfully float free. The Matthew is now moored at the Eco Electrica facility, where underwater hull integrity assessments are scheduled to be conducted by contract divers.

Sector San Juan Coast Guard command center controllers were alerted Tuesday morning after receiving a report that the vessel had grounded onto rocks during their inbound transit to Guayanilla.

Coast Guard marine inspectors and pollution investigators from Regional Inspection Office Ponce and Sector San Juan are providing support on scene. Coast Guard controllers launched an Air Station Borinquen, Puerto Rico, HH-65 Dolphin helicopter crew to assist.

http://coastguardnews.com/coast-guard-responds-to-a-lng-tank-ship-aground-near-guayanilla-puerto-rico/2009/12/15/