March 1, 2009

Palomar’s pipeline project
Annual taxes: $2.3 million locally

By Rodger Nichols
The Chronicle

     Even against the backdrop of ever-more staggering statistics from Washington, the numbers from the proposed Palomar pipeline project remain impressive.
     Proponents plan to build approximately 210 miles of 36-inch diameter natural gas pipeline in two main sections, at a cost of $600-700 million in current dollars. The project would employ up to 1,800 workers during construction, and the 55 miles of pipeline in Wasco County would generate an estimated $2.3 million in annual tax revenue.
     The eastern section would connect with an existing Gas Transmission Northwest (GTN) pipeline just north of Shaniko and run west past Maupin and Pine Grove, through the Mt. Hood National Forest over the Cascades and hook up with NW Natural’s main Willamette Valley distribution hub at Molalla.
     The western section would run southeast from a proposed LNG ship terminal at Bradwood Landing on the Columbia and also connect to Molalla.
     The pipeline would be constructed and operated by Palomar, a wholly-owned subsidiary of Palomar Gas Holdings, LLC, which is owned 50 percent by GTN and 50 percent by Northwest Natural Gas Company (NW Natural).
     GTN, which itself is a subsidiary of Trans-Canada, has been working with NW Natural, in one form or another, on the eastern section of the proposal for nearly 10 years.
     Currently, NW Natural, which serves 641,000 customers, gets two-thirds of its gas supply from a pipeline that runs down the Washington side of the gorge.
     “It was built 52 years ago in what now has been determined to be active landslide areas,” said Henry Morse, Jr., Palomar project manager. “And every couple of winters, when it rains a lot, the land slides and the pipeline has to be taken out of service and repaired.
     “If something like that had happened in December when we had the cold snap, NW Natural would not have had enough gas and there might have been hundreds of thousands of customers that would have been shut off.
     “As it was, it was so cold they had to shut off all their interruptible customers, which they haven’t had to do for years.”
     The first purpose for Palomar, he said, is to provide another way to get gas from the Rockies or Canada to Molalla, which is the hub of the NW Natural system in the Willamette valley.
     It wasn’t until GTN and NW Natural announced they were building the Shaniko-to-Mollalla connection, Morse said, that the LNG developer asked them to add a western section connecting Molalla to Bradwood Landing.
     The existing GTN line that comes in from the northeast with gas from Canada and the Rocky Mountains flows only one direction, southwest to California.
     But the Palomar line would be bi-directional. In the wintertime, when demand in the Willamette Valley is high and so are the prices, NW Natural would get additional gas from the GTN line west from Shaniko.
     But in the summer, the demand and price are higher in California, which has many natural gas-fired electrical plants feeding millions of air conditioners.
     Then the flow would be reversed in the eastern section, and gas from the LNG terminal would flow southeast from Bradwood Landing to Molalla to Shaniko and south through the GTN line to California.
     If the plan is ultimately approved, Palomar plans to hire up to 250 timber-related employees to remove trees along the route through the Mt. Hood National Forest in 2010, and 1,800 employees, half of them skilled pipeline workers, to construct the entire pipeline in 2011.
     Morse said he had been involved with an 87-mile pipeline construction project in Southern California through agricultural and desert terrain with two water crossings, and the crew was able to complete the job in two and a half months.
“A good crew in open terrain, once they get going, can do two miles a day,” Morse said. “That’s welding together 80-foot pieces of pipe.”

SAFETY
     Morse outlined a number of safety features associated with modern natural gas pipeline construction.
     Design: The pipe is designed so the expected gas volume will be no more than 72 percent of the pipe’s capacity.
     After installation, the pipe is tested with water or some other inert substance at 25 percent above the maximum operating pressure, or about 90 percent of the pipe’s rating.
     “Once you’ve done that, you’ve got really two ways that you can have problems,” said Morse. “Either there’s a corrosion problem that diminishes the thickness of the steel and you lose that margin of safety or there is an external problem, most often being a bozo with a backhoe.”
Cathodic protection: The pipe is coated with an epoxy to prevent rust, but that can get nicked in the construction process, so the company adds what’s called “cathodic protection.” A small voltage potential is placed between ground and the pipe, in such a way that electrons can only go from the ground to the pipe. Rust won’t happen in that environment.
     Depth: To prevent bozo- with-backhoe problems, the pipe is buried at least three feet deep, and there are markers along it. There’s a law that requires anyone digging more than just garden depth to call utilities so they can locate underground utilities before they are dug up.
     Sniffing: Once the line is installed, operators take periodic surveys, including walking the route with a hydrocarbon sniffer.
     Pigging: An instrument is put inside a pipe, moved through by the moving gas. It’s able to measure the wall thickness of every inch of pipe in a full 360 degrees for 100 miles and record any anomalies.
     “There are many many layers of safety, because a pipeline rupture is a very, very bad thing,” Morse said. “Our company, Gas Transmission Northwest, have been operating pipelines in this environment since 1960 and we have a perfect record. We plan to do everything in our power to keep it that way.”
compensation
     One of the other major concerns for people in the pipeline corridor, Morse said, is compensation.
     He said people in this part of Oregon have some idea of the process, since the company expanded its nearby GTN line in 1992, and mentioned one farmer who came to an early meeting in Maupin and was disappointed that the new pipeline wasn’t going to be routed over his property.
     Morse asked the man why, and said the man replied, “I farmed some property that your GTN line goes through, and I was around when you put that line in 1992. You paid all my damages, you made everything the same as it was beforehand. You gave me a big pot of money for an easement for property that I get to use exactly the way I was using it before. And I used that big hunk of money to go buy a new tractor. This time, I was hoping to get a new tractor.”

RIVER CROSSING
     One potential problem is crossing the Deschutes.
     Mores said it would be physically possible to put the pipeline underneath the Deschutes River, but it would be both difficult and expensive.
     “You can’t do a directional drill, which would be the cleanest, because the canyon’s too steep and it’s all fractured rock,” Morse said.
     He also said that if they could get permission to lower the river by impounding more water at the dam upstream, they could dynamite a path across the river bed, lay the pipe, and cover it with crushed rock in three or four days, but it was highly unlikely that it would be allowed.
     The solution is a bridge across the river, set 30 feet or more above the high water. It could be a footbridge with the pipe underneath, he said, or the pipe could be carried in a triangular enclosure with the point of the triangle on top to discourage anyone from crossing.
     Neither of those solutions appealed to Maupin City Councilor Lynn Ewing.
     “It creates an eyesore,” he said. “If you build a bridge, you’re also providing access to the railroad tracks, additional property and everything else. They’re all going to want to throw water balloons off of it.
     “The other option is to build the triangle. That is far worse than the bridge because if it’s there, they’re going to try to climb it. If I were younger, I might try to climb it myself.”
     The problem is the Lower Deschutes Management Plan limits crossing of the Deschutes to a utility corridor which is located just north of Maupin. Power lines already cross the river at that point.
     Mayor Dennis Ross says he will have to stay neutral and recuse himself from any city action because he has about a half-mile of property on the pipeline route.
     “If it comes through, it comes through,” he said. “If it doesn’t come through, it’s no skin off my nose, except the city could use as much money as they’re willing to give.”

TAXES
     At a time when Wasco County is forced to cut back services, the idea of a new revenue stream has its appeal.
     But Judge Dan Ericksen was cautious Friday. “From a tax revenue standpoint, we’re looking at an opportunity like wind generation where there is a significant revenue issue to support some services we’re being forced to cut,” he said.
“But we would want to examine it carefully.
     “In case of something catastrophic, how would this impact other agencies? Would fire districts have to have special equipment?
     “We’d love to have the revenue, but we’d want them to pay any additional costs above the revenue. If there’s no net gain, we’d have to look at all the negatives and say this may not be good for Wasco County.”

Westside opposition strong

By Bethany Monroe
The Molalla Pioneer

Editor’s note: Reporter Bethany Monroe of our sister newspaper, The Molalla Pioneer, has been covering reaction to the western arm of the pipeline, which would run from Molalla to a new proposed liquid natural gas terminal on the Columbia. Excerpts from her stories follow:

April 16, 2008 — The Molalla City Council voted 5-2 last Wednesday to approve Resolution 2008-11 opposing construction of LNG (liquefied natural gas) terminals or pipelines in Oregon.
     Molalla followed the lead of the Forest Grove City Council, which adopted a similar resolution in March.
      Molalla’s resolution will be sent to FERC, county commissioners and the Governor’s office. The resolution states that the city of Molalla is in opposition to terminals being constructed on the Columbia River and accompanying pipelines in Molalla and throughout the state.

May 21, 2008 —A representative from the Federal Energy Regulatory Commission met with officials from the city of Molalla and area residents last week to discuss the proposed TransCanada/Palomar natural gas pipeline project that would run through private properties outside Molalla.
     The meeting was intended to be a dialogue between FERC environmental project manager Douglas Sipe and the city council, but due to vacations and conflicts with other meetings on the same night, most of the councilors were unable to attend.
     Area residents who own land that would be impacted by the pipeline were granted their request to ask questions...
     “I felt like it was a combination of total chaos and amazing opportunity to get information from the horse’s mouth,” landowner and Molalla Oregon Citizens Against the Pipeline (OCAP) member Sha Spady said...
     Sipe was joined at the meeting by Michael Burke, project development manager for TransCanada, which gave some, including Leighton, the impression that FERC was working with the pipeline companies to see the project through, rather than serving as a neutral party.
     Sipe responded that FERC is committed to following the proper public process, but has no commitment to the project itself...
     Some Washington County landowners filed a lawsuit last Thursday against Northwest Natural Gas, claiming the company has repeatedly trespassed illegally on their properties to do survey work for the Palomar pipeline.
     None of the Molalla-area landowners are part of the lawsuit, but Molalla OCAP is listed as a plaintiff, Spady said.

Aug. 13, 2008 — Concerned citizens met with Federal Energy Regulatory Commission outreach manager Doug Sipe last Tuesday evening at Molalla High School to voice their opinions on Palomar Gas Transmission’s proposed natural gas pipeline.
     FERC held similar scoping meetings last November, but decided to hold another this August so that citizens impacted by a new alternative pipeline route proposed after the last scoping meetings would have a fair chance to share their views, Sipe said...
     Palomar plans to install an underground steel pipeline that would run approximately 220 miles long and have bidirectional capabilities, meaning it could transport natural gas either east or west.
     Two routes have been proposed that would pass through private lands near Molalla...
     City manager John Atkins was the first to approach the microphone. He expressed concerns that both pipeline routes cross earthquake zones and presented FERC with maps showing where earthquakes had rattled the state.
     “Both the primary and alternate pipeline routes that are proposed by Palomar pass through this seismically active zone, and cross the Canby-Molalla fault, which runs northwest-southeast and is classified as geologically active,” Atkins said. “If a natural gas pipeline one yard in diameter is to be constructed from eastern Oregon to the coast, why route it through the most active seismic zone in the Willamette Valley and across a fault line?”
     Speakers also expressed concerns that the pipeline would cause environmental damage, especially in the Mt. Hood National Forest.

Jan. 21, 2009 — Citizens opposing the liquefied natural gas terminals and natural gas pipeline projects currently proposed in Oregon gathered for an anti-LNG rally on the capitol steps in Salem last Tuesday.
     Local landowner and Oregon Citizens Against the Pipeline member Sha Spady estimated about 20 Molalla area residents attended the rally to voice their concerns about a proposed natural gas pipeline that would run through properties south of Molalla.
     Spady said that most in the crowd were concerned about eminent domain issues or environmental impacts on national forests. The rally was organized by Olivia Schmidt, a member of OCAP, Columbia Riverkeeper and the Sierra Club. A smaller anti-LNG rally was held at the capitol last year.

Jan 28, 2009 — Clackamas County commissioners and staff members met with local property owners at Molalla Adult Community Center on Friday night to answer questions about the Federal Energy Regulatory Commission application process...
     The county organized the informational meeting after hearing that landowners were confused by a notification from Palomar Gas Transmission mailed earlier this month informing property owners that the company had filed a formal application with FERC, hoping to install a natural gas pipeline that may cut through their land.
     County Commissioners Lynn Peterson, Charlotte Lehan and Bob Austin were all in attendance. They were joined by county staff member Karen Buehrig and county counsel Dan Chandler, who discussed the project process and the use of eminent domain. Mike Carrier, the natural resources policy director for Governor Ted Kulongoski, was also in attendance to help answer citizen questions...
     Commissioner Lehan presented a draft version of a resolution that the commissioners plan to sign stating their support of Governor Ted Kulongoski’s stance that liquefied natural gas terminals and natural gas pipeline projects should not be approved until state and federal agencies have thoroughly examined the environmental benefits and consequences and proven a need for the energy source in Oregon. The resolution also states that the county has filed for intervener status with FERC on the project.
     Citizens requested that the county also add safety and economic impact concerns to the resolution, as well as request a list of the landowners whose properties would be impacted by the proposed pipeline.