Huge new oil and gas fields have changed the way energy is
transported across the United States, opening up the prospect of gas
exports to Asia and increasing shipments of oil by rail. As this
happens, the West Coast, from California to Washington, has become a
major focus for energy developers.
Veresen Inc's Jordan Cove liquefied natural gas (LNG) project in
Coos Bay, Oregon, received approval from the Department of Energy on
Monday to export gas to needy importers in Asia. Another project
further north, known as Oregon LNG, is expected to receive similar
approval within two months.
The two developments, both of which still need construction permits,
would be the first of their kind on the West Coast outside of Alaska
and represent a potentially new era for the United States, where a
drilling boom has pushed output to record highs. The outcome of
these projects could also set the standard for other energy
developments in the region.
But opposition remains.
"Jordan Cove still needs a slew of federal and state permits to
begin construction," said Zack Malitz of San Francisco-based
environmental group Credo, which is opposed to exports because it
could lead to more drilling. "We still have time to sound the
Energy projects have long met opposition in West Coast states where
a stronger environmental lobby has made development approvals
tougher to obtain than in other more oil industry-friendly states
like Texas or Louisiana.
The strength of that opposition is being tested again as coal and
oil producers look to the West Coast to broaden their business.
In recent years, mining and shipping industries have tried, and
sometimes failed, to gain permission to move coal through ports in
the Pacific Northwest to reach Asian markets. The Port of Coos Bay
dropped its plans for a coal export terminal last spring after
Now, three more export terminals remain on the drawing board.
Backers of the Morrow Pacific project in Oregon expect to clear
regulatory hurdles in the coming months.
Meanwhile, oil producers looking to tap west coast markets have
proposed a number of terminals to receive and refine crude oil
delivered on trains. Crude by rail has become a major industry in
recent years, as new output overwhelms the existing pipeline
network. But a number of explosive derailments have given pause to
states considering more train traffic, especially loads carrying
grades of crude oil from North Dakota considered more volatile than
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In Washington State, which has the potential to become a major oil
port if all pending projects are approved, opposition to moving more
crude by rail is growing.
Public meetings held in October
regarding a crude by rail terminal in the Port of Vancouver proposed
by Tesoro Corp and Savage Services garnered tens of thousands of
comments, many of which centered on concerns about crude train
crashes and spills.
The project is in the permitting phase, and the final decision lies
with Governor Jay Inslee.
Valero Energy Corp's plan to build an offloading facility at its San
Francisco-area refinery was pushed to the first quarter of 2015 from
late 2013 to allow time for an environmental review after opponents
voiced concerns to local officials.
The surge in the transport of crude oil by rail into California has
caught the attention of lawmakers in Sacramento, who last week held
a hearing to examine whether more resources should be dedicated to
preventing and responding to accidents.
Currently, less than 1 percent of the state's crude oil is delivered
by rail. But with at least six new crude-by-rail facilities planned
or under construction in California, that figure is expected to
reach 25 percent by 2016.
"Regardless of whether it takes two years or four years, this is a
significant change that represents an emerging threat to
California's natural resources," Tom Cullen, administrator of the
Department of Fish and Wildlife's Office of Spill Prevention and
Response, said at the hearing last week.
(Reporting by Edward McAllister in New York, Rory Carroll in San
Francisco, Patrick Rucker in Washington, D.C., and Kristen Hays in
Houston; editing by Joseph Radford)
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