Sustainable Business Oregon: Palomar natural gas pipeline shelved

Sustainable Business Oregon
By Erik Siemers

A proposed 217-mile natural gas pipeline project in Oregon was shelved Thursday after demand for it waned.

Developers of the proposed Palomar Pipeline, a joint venture between Portland-based Northwest Natural Gas Co. and TransCanada Corp. of Calgary, Alta., withdrew their permit applications Wednesday with the Federal Energy Regulatory Commission.

Despite declarations of victory from the project’s opponents, a spokesman for Palomar said the pipeline project is far from dead.

David Dodson, a TransCanada employee serving as spokesman for the Palomar project, said the applications were withdrawn after potential customers said the economic recession has sapped demand for natural gas, downgrading what was an immediate need for a new pipeline.

“These projects are so expensive and take so long that you’re really got to have your commercial support before you get started,” Dodson said.

But once commercial demand returns, Dodson said TransCanda and NW Natural plan to refile their permit application, albeit for a shorter project.

Palomar started out as a 217-mile, 36-inch diameter pipeline stretching from TransCanada’s Gas Transmission Northwest Pipeline in central Oregon to a point on the Columbia River near Astoria, where it was to connect a proposed liquefied natural gas terminal called Bradwood Landing.

In May, Bradwood’s developer, Houston-based NorthernStar Natural Gas, filed for Chapter 7 bankruptcy protection, putting a permanent halt to the project.

NW Natural officials at the time said that if no LNG terminal were developed, they would press on with the roughly 120-mile eastern portion of Palomar, from Madras to Molalla, where it would connect to TransCanada’s pipeline.

Since then, a series of developments has fundamentally changed the design of the project. So Dodson said they decided to withdraw the permit with plans to refile a new one later.

When that happens is unclear, but Dodson said what’s certain is that any new permit will be for a shorter pipeline focused only on the eastern portion of the intial route.

Dodson said the project developers have reached agreements with the Confederated Tribes of Warm Springs to allow the pipeline on tribal lands, shortening its path by 10 miles and avoiding crossing the Deschutes River at a federally designated scenic area, as was proposed in the initial route.

Regardless of the reasons for the permit withdrawal, opponents to the project celebrated the news.

“The withdrawal of the permit for the Palomar gas pipeline today is a huge victory for the people of Oregon,” Ivan Maluski, conservation director for the Oregon Chapter of the Sierra Club, said in a prepared statement.

Maluski said the LNG and pipeline projects posed a significant threat to farms, forests and rivers. The eastern portion of the pipeline threatened old growth forests as well as scenic river areas in the Mt. Hood National Forest.

“With renewed concern over the potential for large-scale earthquakes in our region in coming decades, Oregonians should continue to question proposals to build massive gas pipelines and LNG infrastructure that pose both environmental and public safety risks,” Maluski said.

Dodson, though, believes Oregon — with just a single pipeline serving the region west of the Cascades — will be faced with significant energy needs, making an additional pipeline a necessity.

“It’s just a fact that the Pacific Northwest will need more energy in the future,” Dodson said. “We think natural gas will get a share of that demand growth. If it gets any share, that means more pipeline.”