(CN) – Federal regulators on Thursday approved a hotly contested natural gas pipeline, with one big catch: the Canadian company behind the project must first get approval from state regulators, who have already denied key permits. Even if the state permits never come, federal approval means the company can begin using eminent domain to seize land along the pipeline route.
The Federal Energy Regulatory Commission voted 2-to-1 on Thursday to approve Pembina Pipeline Corp.’s application for a 229-mile pipeline to take natural gas from Alberta’s oil sands region to a newly built export facility in Coos Bay, Oregon, where it would be shipped to markets in Asia.
Commissioner Richard Glick, the only dissenting vote, said in a statement that FERC’s approval violates both the Natural Gas Act and the National Environmental Policy Act.
He pointed to FERC’s findings showing the project would harm 20 threatened and endangered species, encroach on historic properties important to tribes, strain local housing and cause noise levels in the pristine bay to skyrocket.
“As the order points out, the commission was unable to mitigate several of these significant impacts, but yet the commission finds that these adverse impacts are acceptable and is approving these projects without actually demonstrating how whatever benefits the projects may bring outweigh these adverse impacts,” Glick said. “That is not only irresponsible, but it is against the law.”
The project has drawn fire from state and federal agencies who say the project would harm marbled murletts, whales and the eelgrass beds that serve as nursery habitat for countless ocean species.
It would cause “substantial impacts of an unprecedented scale” to Coho habitat, according to the Pacific Fisheries Management Council. Landowners along the pipeline route object to Pembina using eminent domain to build on their land.
And Senator Ron Wyden of Oregon asked the Justice Department to investigate allegations that Jordan Cove was bullying elderly rural landowners into handing over easements to their properties. Wyden announced his opposition to the project on Thursday.
“The Commission has decided to disregard local private property rights and environmental concerns identified by Oregonians,” Wyden said in a statement.
Oregon has already denied key permits, including a water quality permit and a federal consistency review that the Department of Land Conservation said it couldn’t approve because of the destruction the project would cause Oregon’s coastal environment.
Oregon regulators said that denial made it illegal for FERC to approve the project unless the U.S. Secretary of Commerce overrides Oregon’s objection.
That hasn’t happened yet. But FERC Chairman Neil Chatterjee told press Thursday that despite the commission’s approval, Pembina can’t begin construction until it shows that it has secured “all applicable authorizations,” including state permits.
“It is incumbent on the sponsor to secure all of the necessary permits,” Chatterjee said. “Once a project is approved by the commission, it is up to the company to decide whether to go forward and move ahead with the project based on the market and other factors as well as their ability to obtain the required state permits.”
Chatterjee added that, in his view, economics should be the deciding factor.
“I believe the market, not a state agency, is best positioned to make those determinations,” Chatterjee said.
Market prices for liquefied natural gas have plunged to record lows, but Chatterjee said that fact hasn’t dampened investor interest in building new export facilities.
FERC’s certificate of approval means Pembina can move forward with procedures to take the property of landowners along the pipeline route through eminent domain – something Pembina spokesman Paul Vogel told Courthouse News last June that the company is willing to do.
“If you get right down to it, that tool is always there,” Vogel said. “But we really don’t want to do it.”
Vogel didn’t respond Thursday to repeated requests for comment. But Pembina’s website says it has voluntary agreements with 225 landowners who will allow the pipeline to be constructed on their land. Those numbers are private company information and have not been verified by FERC.
A group of landowners on the route who oppose the project dispute those numbers. They say they have been tracking easements recorded with the four counties where the pipeline would run and have found only 172. The landowners have filed a lawsuit under the Freedom of Information Act in an attempt to verify the agreements and ensure that they were made freely and without coercion.
Under the Natural Gas Act, FERC must find that a project is “in the public interest” in order to justify the use of eminent domain. Opposing landowners question how FERC complied with that requirement, given that Pembina, a Canadian company, would use the pipeline to export Canadian natural gas to Asia.
Chatterjee on Thursday defended his vote, saying liquefied natural gas projects like Jordan Cove meet the public interest criteria.
“U.S. LNG exports have tremendous benefits for America – geopolitically, economically and environmentally as well,” Chatterjee said. “Clean U.S. LNG displacing fossil resource use in other parts of the world, particularly in Asia, will have a positive impact on reducing global carbon emissions.”
David Bookbinder, lead counsel for the conservative Niskanen Center and attorney for landowners fighting eminent domain, told Courthouse News Thursday that FERC’s approval means Pembina can start taking private property now, even if it never gets the state permits necessary to start construction on the pipeline.
And the prohibition on construction means the only thing off the table is laying the pipeline in the ground. Cutting down trees, condemning private property and digging the trench where the pipeline would lay are all fair game, Bookbinder said.
“FERC’s attitude is, ‘We don’t care about landowners. They are not part of our equation. All we care about is building pipeline infrastructure,’” Bookbinder said. “I think the outcome of this would be a little different if the pipeline was going through Chairman Chatterjee’s property.”