Most of us will never receive stock dividend checks from Canadian company Veresen, Inc., nevertheless we are expected to invest and share in the risk of its proposed Jordan Cove LNG export terminal and the associated Pacific Connector Gas Pipeline.
We are being asked to risk fisheries and more than 400 streams, wildlife habitat, productive timberland, pastures and farms and even in some instances, personal property rights. Public infrastructure like the Southwest Oregon Regional Airport and the bay itself will be under new restrictions to accommodate LNG tankers and we are giving JC a property tax break as well. While not shareholders, anyone who will live within the as yet undisclosed natural gas extraction fields or will be affected by the hundreds of miles of pipeline or will live in the glare of the flares atop the 250-foot storage tanks has a stake in this project.
Stakeholders have a right and a responsibility to conduct the same thorough due diligence and fiscal analysis required of any high-risk investment in order to determine the highest and best use of our common resources. We must weigh the risks against the rewards.
The developers, promoters and proponents of JC claim that upon completion up to $52 million in additional tax revenue will be spread between Coos, Douglas, Jackson and Klamath counties. Condemnation appraisers, however, warn that the presence of a pipeline and easement can reduce by 30-50 percent or more both assessed and resale values of property in a pipeline’s vicinity because of “fear” and “stigma.” That could trigger a net loss of property tax revenue.
Reduced property assessment would result in less property tax revenue dedicated to schools and offset or reduce the promised $25 million annual contribution to a local education foundation.
Stakeholders need to establish if there will be a net gain in jobs and determine the full fiscal impact on existing industries.
The export terminal and 234-mile PCGP takes up an enormous single purpose environmental footprint yet will produce only 146 direct jobs, roughly one job for every fifty acres. Property owners affected by the pipeline route have expressed grave concerns about the loss of value and productivity to their ranches and forests. Former interim commissioner Fred Messerle says that his property along the proposed pipeline route would be worth “a gross value of $240,000 per acre for 40-year-old timber by 2050.”
Seneca Jones Timber Company echoes the same concerns. “We manage our timberland base on a sustained yield basis by local foresters and employees,” writes Seneca Jones’ Monica Jelden in a letter to the Douglas County Planning Department. “The lumber generated from our forests is essential as a supply source to our milling operations and our ability to stay in business…” The company also notes that the PCGP will significantly impair normal forest fire suppression efforts and present an additional hazard to wildland firefighters and may prohibit the use of conventional firefighting equipment.
These parties and others attest that conditions of the pipeline easement will further impair their ability to maintain maximum yield and safe harvest practices on adjacent property and agree that the terminal and pipeline do not meet the goals set by the Coastal Zone Management Act.
Proponents of JC expect stakeholders to gamble existing jobs and resources on the natural gas market. “Supply and Demand Market Assessment and Surplus Evaluation Report”, a study prepared for Jordan Cove LNG L.P. by Navigant dated Sept. 9, 2013, states “the likely development of North American liquefaction capacity for export is in the 8-10 Bcfd range, with 6-8 Bcfd from the U.S. “ Navigant also says “only some portion of incremental international LNG liquefaction capacity will be built in North America” because the seven terminals already approved for export already meet the 10Bcfd projected capacity. In other words, Jordan Cove, if approved, will have no competitive edge.
Should the project proceed stakeholders will have no choice but to place their full faith and trust not just in the company’s local management but also the board of directors. Past and recent local company closures provide strong evidence that the interests of the shareholder will always trump promises to the stakeholder and the project offers absolutely no guarantees.
Finally, there is no exit strategy. Judging from leading economic indicators at similar projects like Sabine Pass LNG in Louisiana, despite the high-level of stakeholder risk the likelihood of a positive return is very slim. There is no secondary use for the terminal or pipeline and their very construction will have a daunting effect on tourism and recreation. Once these common resources and tax abatements are invested to perpetuate a 19th century technology, there will be little left to move Coos County towards a greener more sustainable future.
