[Federal Register Volume 77, Number 109 (Wednesday, June 6, 2012)]
[Notices]
[Pages 33446-33449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13679]


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DEPARTMENT OF ENERGY

[FE Docket No. 12-32-LNG]


Jordan Cove Energy Project, L.P.; Application for Long-Term 
Authorization to Export Liquefied Natural Gas Produced From Domestic 
and Canadian Natural Gas Resources to Non-Free Trade Agreement 
Countries for a 25-Year Period

AGENCY: Office of Fossil Energy, DOE.

ACTION: Notice of application.

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SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy 
(DOE) gives notice of receipt of an application (Application), filed on 
March 23, 2012, by Jordan Cove Energy Project, L.P. (Jordan Cove), 
requesting long-term, multi-contract authorization to export as 
liquefied natural gas (LNG) both natural gas produced domestically in 
the United States and natural gas produced in Canada and imported into 
the United States, in an amount up to the equivalent of 292 billion 
cubic feet (Bcf) of natural gas per year, 0.8 Bcf per day (Bcf/d), over 
a 25-year period, commencing on the earlier of the date of first export 
or seven years from the date the requested authorization is granted. 
The LNG would be exported from the proposed LNG terminal to be located 
on the North Spit of Coos Bay in Coos County, Oregon, to any country 
(1) with which the United States does not have a free trade agreement 
(FTA) requiring national treatment for trade in natural gas, (2) which 
has developed or in the future develops the capacity to import LNG via 
ocean-going carrier, and (3) with which trade is not prohibited by U.S. 
law or policy. Jordan Cove is requesting this authorization to export 
LNG both on its own behalf and as agent for other parties who hold 
title to the LNG at the point of export. The Application was filed 
under section 3 of the Natural Gas Act (NGA). Protests, motions to 
intervene, notices of intervention, and written comments are invited.

DATES: Protests, motions to intervene or notices of intervention, as 
applicable, requests for additional procedures, and written comments 
are to be filed using procedures detailed in the Public Comment 
Procedures section no later than 4:30 p.m., eastern time, August 6, 
2012.

ADDRESSES: 
    Electronic Filing on the Federal eRulemaking Portal under FE Docket 
No. 12-32-LNG: http://www.regulations.gov.
    Electronic Filing by email: [email protected].

[[Page 33447]]

    Regular Mail: U.S. Department of Energy (FE-34), Office of Natural 
Gas Regulatory Activities, Office of Fossil Energy, P.O. Box 44375, 
Washington, DC 20026-4375.
    Hand Delivery or Private Delivery Services (e.g., FedEx, UPS, 
etc.): U.S. Department of Energy (FE-34), Office of Natural Gas 
Regulatory Activities, Office of Fossil Energy, Forrestal Building, 
Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT: 
    Larine Moore or Marc Talbert, U.S. Department of Energy (FE-34), 
Office of Natural Gas Regulatory Activities, Office of Fossil Energy, 
Forrestal Building, Room 3E-042, 1000 Independence Avenue SW., 
Washington, DC 20585, (202) 586-9478; (202) 586-7991.
    Edward Myers, U.S. Department of Energy, Office of the Assistant 
General Counsel for Electricity and Fossil Energy, Forrestal Building, 
Room 6B-256, 1000 Independence Ave. SW., Washington, DC 20585, (202) 
586-3397.

SUPPLEMENTARY INFORMATION:

Background

    Jordan Cove is a Delaware limited partnership with its principal 
place of business in Coos Bay, Oregon. The general partner of Jordan 
Cove is Jordan Cove Energy Project L.L.C., a Delaware limited liability 
company. Both Jordan Cove and its general partner are owned by the two 
limited partners in Jordan Cove. The first, Fort Chicago LNG II 
U.S.L.P., a Delaware limited partnership owns seventy-five percent. It 
is wholly owned and controlled, through a number of intermediate wholly 
owned and controlled companies, by Veresen, Inc., a Canadian 
corporation based in Calgary, Alberta, which, prior to its organization 
as a corporation, was Fort Chicago Energy Partners L.P., a Canadian 
limited partnership (although the name of the parent changed, the name 
of the subsidiary owning Jordan Cove did not). The second, Energy 
Projects Development L.L.C., a Colorado limited liability company, owns 
twenty-five percent. It is owned by various private individuals, all of 
whom are U.S. citizens.
    Jordan Cove states that its construction and operation of an LNG 
terminal in Coos Bay, Oregon has already been authorized by the Federal 
Energy Regulatory Commission (FERC) as an import facility.\1\ Jordan 
Cove states that it has developed modified plans for the terminal to 
operate as an export facility. The terminal facilities authorized by 
the FERC Order that will be used for exports include two 160 cubic 
meter LNG full-containment storage tanks, a single marine berth, and 
on-site utilities and services. The modified plans include large 
diameter LNG piping configured for exports and electrically driven 
liquefaction equipment. On February 29, 2012, Jordan Cove filed a 
request for FERC's Office of Energy Projects to commence the mandatory 
National Environmental Policy Act (NEPA) pre-filing review process for 
an application to amend its FERC authorization to add export 
facilities, which was docketed in FERC Docket No. PF12-7-000 and 
approved by letter dated March 6, 2012. Jordan Cove anticipates 
completing the pre-filing review process and filing its application to 
amend in October, 2012.
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    \1\ Pacific Connector Gas Pipeline, LP; Jordan Cove, 129 FERC ] 
61,234 (December 17, 2009) (FERC Order). Rehearing requests of the 
FERC Order was pending before FERC at the time of the Application 
submission to DOE/FE.
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    Jordan Cove states that provided that FERC authorizes the export 
facilities by the end of 2013, Jordan Cove would be able to complete 
construction and commence export service in the fourth quarter of 2017. 
Jordan Cove further states that this service would offer benefits 
unique to the Jordan Cove terminal, because it is the only currently 
proposed liquefaction and export project that will provide customers 
the opportunity to export LNG from the U.S. West Coast with natural gas 
likely to be sources from Canadian and the U.S. Rocky Mountain supply 
basins.

Current Application

    In the instant application, Jordan Cove seeks long-term, multi-
contract authorization to export as LNG both natural gas produced 
domestically in the United States and natural gas produced in Canada 
and imported into the United States, up to the equivalent of 292 Bcf of 
natural gas per year, 0.8 Bcf/d, for a period of 25 years beginning on 
the earlier of the date of first export or seven years from the date 
the authorization is granted by DOE/FE. Jordan Cove requests that such 
long-term authorization provide for export from its LNG terminal to be 
located on the North Spit of Coos Bay in Coos County, Oregon to any 
country with which the United States does not have an FTA requiring 
national treatment for trade in natural gas, which has developed or in 
the future develops the capacity to import LNG via ocean-going carrier, 
and with which trade is not prohibited by U.S. law or policy.
    Jordan Cove states that rather than enter into long-term natural 
gas supply or LNG export contracts, it contemplates that its business 
model will be based primarily on Liquefaction Tolling Agreements (LTA), 
under which individual customers who hold title to natural gas will 
have the right to deliver that gas to the Jordan Cove terminal for 
liquefaction services and to receive LNG in exchange for a processing 
fee paid to Jordan Cove.\2\
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    \2\ Jordan Cove states that under the LTA business model, the 
decision whether to utilize liquefaction capacity will be made by 
the LTA customer: If the marginal cost of producing or purchasing 
natural gas, liquefying it, and transporting the resulting LNG to a 
destination market is higher than other competing source of supply 
in any month, the LTA customer may forego its nomination rights for 
that month.
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    Jordan Cove requests long-term, multi-contract authorization to 
engage in exports of LNG on behalf of or as agent for others, as well 
as on its own behalf. Jordan Cove states that the title holder at the 
point of export, if not Jordan Cove, may be an LTA customer or a party 
that purchases LNG from an LTA customer pursuant to a long-term 
contract. Jordan Cove will file, or cause others to file, under seal, 
executed contracts associated with the long-term supply of natural gas 
to, or the long-term export of LNG from, the Jordan Cove terminal, 
including LTAs, within 30 days of their execution.\3\ Jordan Cove 
states that Jordan Cove's terminal, via the Pacific Connector Gas 
Pipeline (PCGP),\4\ will be connected to the Northwest United States 
market hub at Malin, Oregon, providing access to abundant and diverse 
gas supplies in both the United States and Canada. At the Malin hub, 
PCGP will interconnect with Gas Transmission Northwest Pipeline, 
delivering gas from western Canada, and via its Stanfield 
interconnection with Northwest Pipeline, delivering gas from the U.S. 
Rockies; Ruby Pipeline, delivering gas from western Wyoming, 
northwestern Colorado and northern Utah; and, PG&E Redwood Path, 
serving northern California.
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    \3\ Jordan Cove states that when any such agreement is executed, 
and the transaction specific information required under 10 CFR 
590.202(b) becomes available, Jordan Cove will comply with that 
provision.
    \4\ Jordan Cove states that PCGP is a new interstate natural gas 
pipeline also certificated by the FERC Order (PCGP, together with 
the Jordan Cove terminal, the Jordan Cove Project).
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Public Interest Considerations

    In support of its Application, Jordan Cove states that in DOE/FE 
Order No. 2961 (Sabine Pass Liquefaction, LLC) \5\ authorizing LNG 
exports to non-FTA nations, DOE/FE acknowledged its longstanding 
position that ``Section 3(a) creates a rebuttable presumption that a 
proposed export of natural gas is in the

[[Page 33448]]

public interest, and DOE must grant such an application unless those 
who oppose the application overcome that presumption ``by making an 
affirmative showing of inconsistency with the public interest.'' \6\
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    \5\ Sabine Pass Liquefaction, LLC, DOE/FE Order No. 2961, FE 
Docket No. 10-111-LNG (May 20, 2011).
    \6\ Id. at 28 and n. 38, citing Phillips Alaska Natural Gas 
Corporation and Marathon Oil Company, 2 FE ] 70,317 (1999) (Phillips 
Order).
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    Jordan Cove states that the LNG export authorization will serve the 
public interest in multiple ways. It will permit exports when 
competitive and otherwise promote healthy domestic and international 
natural gas markets. Jordan Cove states that the exports will not pose 
any threat to the security of domestic natural gas supplies, but to the 
contrary, they will result in significant economic benefits. Jordan 
Cove states that the demand created by the exports will stimulate 
increased revenues and jobs in upstream industries, which in turn will 
benefit the overall U.S. economy. Jordan Cove states that the 
construction and operation of the Jordan Cove Project will also create 
jobs and produce revenues to the benefit of the local and regional 
economies. Jordan Cove states that exports will have positive 
international trade impacts for the United States. In sum, Jordan Cove 
states that the Jordan Cove Project's economic benefits advance the 
Administration's efforts to expand exports, create jobs, and otherwise 
stimulate the beleaguered U.S. economy.
    Jordan Cove commissioned independent experts to conduct studies and 
prepare the following reports that Jordan Cove claims demonstrate these 
public interest impacts:
    1. Jordan Cove LNG Export Project Market Analysis Study, January 
2012 by Navigant Consulting, Inc. (Navigant) analyzing gas supply and 
demand outlooks and modeling potential price effects of the proposed 
exports for the North American natural gas market to 2045 (Navigant 
Study).
    2. Whitepaper: Analysis of the EIA Export Report `Effect of 
Increased Natural Gas Exports on Domestic Energy Markets' Dated January 
19, 2012, February 2012 by Navigant commenting on the EIA Report \7\ 
(Navigant Whitepaper).
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    \7\ In January 2012, the U.S. Energy Information Administration 
(EIA) released Effect of Increased Natural Gas Exports on Domestic 
Energy Markets (EIA Report), a case study, prepared at the request 
of DOE/FE, evaluating the impact of increased natural gas demand 
reflecting exports of LNG on domestic energy consumption, production 
and demand under four scenarios. The EIA Report is addressed infra 
at 16-18.
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    3. An Economic Impact Analysis of the Construction of an LNG 
Terminal and Natural Gas Pipeline in Oregon, March 6, 2012 by 
ECONorthwest examining impacts on the states of Oregon and Washington 
of the construction of the Jordan Cove Project (Construction Study).
    4. An Economic Impact Analysis of Jordan Cove LNG Terminal and 
Pacific Connector Gas Pipeline Operations, March 23, 2012 by 
ECONorthwest examining impacts on the local communities of the 
operations of the Jordan Cove Project (Operations Study).
    5. Upstream Economic Contributions of the Jordan Cove Energy 
Project, February 29, 2012 by ECONorthwest quantifying direct and 
indirect contributions of the Jordan Cove Project to the United States 
economy (Upstream Contributions Study).
    6. Effect of the Jordan Cove Energy Project's LNG Exports on United 
States Balance of Trade, March 20, 2012 by ECONorthwest analyzing the 
impact of the Jordan Cove Project on the nation's balance of trade 
(Balance of Trade Study).
    Copies of the complete reports are appended to Jordan Cove's 
application. Jordan Cove provides further discussion on their views 
that the proposed export authorization is in the public interest, 
discussed briefly below.
    (1) Jordan Cove Exports Will Benefit Natural Gas Markets--Jordan 
Cove claims: (a) That natural gas supply is more than adequate to serve 
the projected domestic demand and proposed LNG exports; (b) that the 
effect of Jordan Cove exports on natural gas prices is minimal; and (c) 
that LNG exports will strengthen the U.S. natural gas market.
    (2) Jordan Cove Exports Will Cause Economic Benefits--Jordan Cove 
claims: (a) That construction of the Jordan Cove Project will benefit 
the regional economy; (b) that operation of the Jordan Cove Project 
will benefit the local economy; (c) that exports from Jordan Cove will 
foster upstream industry growth and stimulate the U.S. economy; (d) 
that Jordan Cove exports will provide trade benefits; and (e) that 
Jordan Cove exports will provide additional international benefits.
    (3) Jordan Cove claims that exports will offer unique advantages 
due to its location.
    A more complete discussion of the above public benefits claimed by 
Jordan Cove is highlighted in Jordan Cove's application. Based on the 
reasoning provided in the Application, Jordan Cove requests that the 
DOE/FE determine that Jordan Cove's request for long-term, multi-
contract authorization to export LNG to non-FTA countries would be 
consistent with the goal of the DOE Policy Guidelines to ``minimize 
regulatory impediments to a freely operating market.'' \8\
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    \8\ DOE Policy Guidelines at 6685.
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Environmental Impact

    Jordan Cove states that FERC has found that the proposed Jordan 
Cove LNG import terminal is environmentally acceptable if constructed 
and operated in accordance with the environmental mitigation measures 
set forth in the FERC Order. Jordan Cove also states that the potential 
environmental impacts of the terminal as modified to permit exports of 
LNG will be reviewed by FERC under NEPA when Jordan Cove's application 
to amend its certificate to authorize liquefaction and export is filed. 
Jordan Cove requests that DOE/FE issue an order authorizing exports of 
LNG conditioned upon satisfactory completion of the environmental 
review process by FERC.

DOE/FE Evaluation

    The Application will be reviewed pursuant to section 3 of the NGA, 
as amended, and the authority contained in DOE Delegation Order No. 00-
002.00L (April 29, 2011) and DOE Redelegation Order No. 00-002.04E 
(April 29, 2011). In reviewing this LNG export Application, DOE will 
consider any issues required by law or policy. To the extent determined 
to be relevant or appropriate, these issues will include the impact of 
LNG exports associated with this Application, and the cumulative impact 
of any other application(s) previously approved, on domestic need for 
the gas proposed for export, adequacy of domestic natural gas supply, 
U.S. energy security, and any other issues, including the impact on the 
U.S. economy (GDP), consumers, and industry, job creation, U.S. balance 
of trade, international considerations, and whether the arrangement is 
consistent with DOE's policy of promoting competition in the 
marketplace by allowing commercial parties to freely negotiate their 
own trade arrangements. Parties that may oppose this Application should 
comment in their responses on these issues, as well as any other issues 
deemed relevant to the Application.
    NEPA requires DOE to give appropriate consideration to the 
environmental effects of its proposed decisions. No final decision will 
be issued in this proceeding until DOE has met its NEPA 
responsibilities.
    Due to the complexity of the issues raised by the Applicants, 
interested persons will be provided 60 days from the date of 
publication of this Notice in which to submit comments, protests,

[[Page 33449]]

motions to intervene, notices of intervention, or motions for 
additional procedures.

Public Comment Procedures

    In response to this notice, any person may file a protest, 
comments, or a motion to intervene or notice of intervention, as 
applicable. Any person wishing to become a party to the proceeding must 
file a motion to intervene or notice of intervention, as applicable. 
The filing of comments or a protest with respect to the Application 
will not serve to make the commenter or protestant a party to the 
proceeding, although protests and comments received from persons who 
are not parties will be considered in determining the appropriate 
action to be taken on the Application. All protests, comments, motions 
to intervene or notices of intervention must meet the requirements 
specified by the regulations in 10 CFR part 590.
    Filings may be submitted using one of the following methods: (1) 
Submitting comments in electronic form on the Federal eRulemaking 
Portal at http://www.regulations.gov, by following the on-line 
instructions and submitting such comments under FE Docket No. 12-32-
LNG. DOE/FE suggests that electronic filers carefully review 
information provided in their submissions and include only information 
that is intended to be publicly disclosed; (2) emailing the filing to 
[email protected] with FE Docket No. 12-32-LNG in the title line; (3) 
mailing an original and three paper copies of the filing to the Office 
Natural Gas Regulatory Activities at the address listed in ADDRESSES; 
or (4) hand delivering an original and three paper copies of the filing 
to the Office of Natural Gas Regulatory Activities at the address 
listed in ADDRESSES.
    A decisional record on the Application will be developed through 
responses to this notice by parties, including the parties' written 
comments and replies thereto. Additional procedures will be used as 
necessary to achieve a complete understanding of the facts and issues. 
A party seeking intervention may request that additional procedures be 
provided, such as additional written comments, an oral presentation, a 
conference, or trial-type hearing. Any request to file additional 
written comments should explain why they are necessary. Any request for 
an oral presentation should identify the substantial question of fact, 
law, or policy at issue, show that it is material and relevant to a 
decision in the proceeding, and demonstrate why an oral presentation is 
needed. Any request for a conference should demonstrate why the 
conference would materially advance the proceeding. Any request for a 
trial-type hearing must show that there are factual issues genuinely in 
dispute that are relevant and material to a decision and that a trial-
type hearing is necessary for a full and true disclosure of the facts.
    If an additional procedure is scheduled, notice will be provided to 
all parties. If no party requests additional procedures, a final 
Opinion and Order may be issued based on the official record, including 
the Application and responses filed by parties pursuant to this notice, 
in accordance with 10 CFR 590.316.
    The Application filed by Jordan Cove is available for inspection 
and copying in the Office of Natural Gas Regulatory Activities docket 
room, Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585. 
The docket room is open between the hours of 8:00 a.m. and 4:30 p.m., 
Monday through Friday, except Federal holidays. The Application and any 
filed protests, motions to intervene or notice of interventions, and 
comments will also be available electronically by going to the 
following DOE/FE Web address: http://www.fe.doe.gov/programs/gasregulation/index.html. In addition, any electronic comments filed 
will also be available at: http://www.regulations.gov.

    Issued in Washington, DC, on May 29, 2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2012-13679 Filed 6-5-12; 8:45 am]
BILLING CODE 6450-01-P