|
Q and A with John Burns, Port of Coos Bay CEO
You are the CEO for the Port of Coos Bay. Before you came to Oregon you were the Executive Vice President and General Manager for Hornbeck Offshore Services, which operates primarily in the Gulf of Mexico. What were your duties at Hornbeck? Were you and Hornbeck involved in the clean-up of BP's Deepwater Horizon oil spill in the Gulf of Mexico in 2010?
While working at Hornbeck Offshore Services I held total P & L responsibility for a fleet of ocean going vessels that worked in both domestic US and foreign trade in the oil and gas sector. I remained at HOS until early 2010 and left to start my own consulting firm.
When the Deepwater Horizon incident happened in April of 2010, I worked with British Petroleum as a consultant, along with a team of folks that had accountabilities for management of the vessels that had been brought in to assist in the response effort. I worked on the spill response and clean-up efforts for about two years. At that time, Hornbeck was one of the companies that provided vessels for the response, but I was not working as a member of HOS management.
This is your third year as CEO of the Port of Coos Bay. Canada's Pembina Pipeline Corporation has spent more than $200 million planning to build Jordan Cove, a liquefied natural gas (LNG) export project in Coos Bay. Pembina's investment in Jordan Cove is expected to be close to $10 billion -- or twice the amount that Amazon is investing in its second U.S. corporate headquarters. Do you think Oregon residents understand the scale of Pembina's proposed investment for the south Oregon coast? And is Jordan Cove going to happen? Will construction begin in 2019, as planned?
It is hard to believe, but you are right -- I am in my third year here at the Port of Coos Bay, and it has been a very busy and transformative time. The Jordan Cove LNG enterprise has been a long time in the making. This venture began over a decade ago, and there has been a tremendous amount of time, effort, energy and money expended to make it a reality. I do want to remind people that the Jordan Cove facility was originally designed as an LNG import facility, due to our nations need for more natural gas at that time. Since Jordan Cove was first initiated, North America has become one of the top natural gas production areas in the world, and demand has continued to grow in Asian markets for the LNG produced here.
Unfortunately, I suspect that many people are either totally indifferent, influenced by hyperbole, or hold intractable positions, losing sight of what benefits will result from the creation of a business of this size in this region, the state, and the country. People tend to look only to those elements that are tangible, such as "how many full-time family wage jobs will be created," and don't bother to understand the benefits of helping to alleviate the tax burden that is felt by individuals. They also fail to see that a business like Jordan Cove can be the first step in re-invigorating the economy of a rural area that has, up until this point, been left behind. I truly believe that Jordan Cove will have a snowball effect resulting in further economic development in the Coos Bay area, benefitting Oregon as a whole.
It is my opinion and belief that Jordan Cove will happen. There is a great need globally for natural gas. The LNG product that originates in western Colorado and Canada is among the lowest cost in the market. The delivery time from North America to Asia is most expeditious from the Pacific Northwest, which makes LNG shipped from Coos Bay even more attractive.
From what I understand, we are now looking to the 2nd Quarter of 2019 for a FERC determination on the facility and pipeline. If that holds up, and it is as I suspect a positive outcome, it would seem logical that we will see construction start late 2019, early 2020.
In 2016 during the Obama administration, the Federal Energy Regulatory Commission, which has jurisdiction over siting new liquefied natural gas terminals, rejected Jordan Cove's application. In November of this year, a remade FERC under President Trump is expected to rule again on what will now be Pembina's third application. Do you expect Pembina to get approval for Jordan Cove in the coming ruling?
As I have said many times, I believe that the green light will be given to Jordan Cove. However, regardless of which party holds the majority of commission seats, FERC is an agency with processes and procedures that will be followed. As a Port Authority, we deal with many federal, state and local agencies on a routine basis. These agencies, as well as the Port as a public entity, have an obligation to follow rules that provide the public with assurances that we are protecting their interest. That said, at times these processes and procedures can slow work flow to what seems to be a glacial pace.
In May 2017, Coos County voters rejected, by a margin of 76-24, a ballot measure that would have banned Jordan Cove. Yet in December of 2017, U.S. Sen. Jeff Merkley came out in opposition to Jordan Cove. Meanwhile, Colorado Gov. John Hickenlooper said this about the pipeline: "Jordan Cove represents an important new source of demand for natural gas producers to continue to access markets for natural gas including the Asian Pacific countries which comprise the fastest growing liquefied natural gas (LNG) market in the world." What's going on here? Why the disconnect between these two, both Democrats?
I can't give you any real insight as to a difference in opinion and approach taken by Senator Merkley and Governor Hickenlooper. I can speak in some regards to Senator Merkley and Jordan Cove. While the Senator and I have different views of the effects of the pipeline and the Jordan Cove facility from an environmental standpoint, I think we both see the economic benefits. I will give the Senator credit for reaching out to stakeholders for their input prior to making his decision to express opposition to Jordan Cove. The Senator reached out to both Dave Kronsteiner, our Port Commission President, and myself to engage us in separate meetings to gain insight into our perspective on the benefits and drawbacks of situating this business here in Oregon. He was also forthright enough to call the night before his public statement to let us know about his position, even though it was not what we desired.
In response to Merkley's opposition to Jordan Cove, three Oregon county commissioners, Klamath's Derrick DeGroot, Douglas' Tim Freeman, and Coos' John Sweet wrote an op-ed in the Medford Mail Tribune. "The Jordan Cove liquefied natural gas (LNG) terminal will provide U.S. allies in Asia with a cleaner form of energy while creating thousands of construction jobs and hundreds of permanent jobs in Southern Oregon and paying tens of millions of dollars in taxes to rural counties every year it operates." Have the commissioners won the argument against Sen. Merkley in Oregon and in Coos Bay about American natural gas being a better energy source for Asia than coal-burning power plants?
I believe that the Commissioners made their point quite well and articulated the great need that our rural communities have for the family wage jobs and taxes that Jordan Cove will bring. It is very hard to "win" arguments today as we tend to lock into positions and then shut down the opportunity to engage in discourse which could lead to a change of mind and or heart.
I believe that we tend to be disingenuous regarding how we in developed countries want others to conduct themselves when it comes to climate issues. On the one hand, we demand that they take action to reduce their emissions and improve air quality, yet we oppose opportunities to provide them with the resources to effect change.
350 Eugene is a non-profit whose mission statement revolves around climate change. But their claims about Jordan Cove go quite a bit further. They write, "The Jordan Cove project is WRONG for so many reasons: trampling the rights of landowners by use of eminent domain, damage to the Bay, and other ecosystems, leakage and spills into waterways and public lands, potential for fires explosions, trespassing on tribal lands, putting local jobs in fisheries, tourism, and other sectors at risk, pollutions and carbon emissions from the terminal -- the list goes on and on!"
And of course, they add that LNG is a fossil fuel and would send carbon into the atmosphere when it is burned by the end user.
From this laundry list of concerns from 350 Eugene, do any of them have merit or are they just throwing the "kitchen sink" at Jordan Cove, hoping something sticks with the public?
I think with everything that is done, you should always proceed with a certain level of concern that you are working to mitigate the potential for any kind of adverse consequence. However, often you will encounter individuals or groups that will turn to fear-mongering in an attempt to sway opinion. I think that the areas which you have pointed out that 350 Eugene has proffered are just that.
First, let's start with the issue of eminent domain. As far as I know, there have not been any properties that have been affected by the exercise of any form of eminent domain by the Jordan Cove facility or associated pipeline. While a positive FERC decision could empower Pembina with that ability, I know that every effort will be made to come to an amicable agreement with property owners.
As to the environmental disaster that is being asserted as well as the adverse impact on current types and levels of employment, this is not steeped in any reasonable level of probability or likelihood.
I have heard from people that they are concerned that the facility will be sited on the North Spit, and that they are worried about what the impacts would be in the event of an earthquake or tsunami. I try to remind people of the cost of this facility and ask what company would invest $7 billion in a facility that would be subject to devastation in such an event. The extensive permitting and environmental review process Jordan Cove is subject to looks at these risk factors and countless others. This plant has been engineered to withstand the effects of such events and remain intact.
Oregonian reporter Ted Sickinger wrote this about the permitting process for Jordan Cove in November 2017.
"Last month, the Oregon Land Use Board of Appeals rejected Coos County's land use approval of the project, remanding it back to the county for further consideration.
"The Department of Geology and Mineral Industries weighed in last week with a stinging critique of the company's analysis of its earthquake and tsunami preparedness. And the Department of State Lands notified the company last week that its application for a removal fill permit was incomplete."
Gov. Brown remains neutral so far on Jordan Cove during this year's 2018 gubernatorial campaign despite the fact that her top contributor is a building trades political action committee which has given her $150,000 and supports Jordan Cove. Do you think the hostility reported above by state bureaucrats about Jordan Cove is still accurate or was it temporary and anecdotal? Will Gov. Brown eventually support Jordan Cove, or will the fate of the pipeline be determined by the winner of the 2018 Oregon governor's race.
This is a very interesting question, and one that is extremely difficult for me to answer. I do not have line of sight into the minds, motives, or actions of agencies or the individuals working there. I can say that I believe that every application and permit that is filed on behalf of Jordan Cove will receive a great deal of scrutiny and a demand that they be accurate and complete. As you are aware, there will be myriad legal challenges to every decision that is made. I think that the natural instinct for most people with the responsibility of signing off on these permits is to insure the defensibility of their decision.
As to Governor Brown, what I have learned in my discussions with her is that she is keenly aware of the plight of the folks who live and work here in southwest Oregon. She understands the need to improve our educational programs and the development of family wage jobs. She knows that jobs are the answer to many of our problems, but I couldn't say what kind of employment she deems acceptable. I can't provide any conjecture on what position she may take in the future regarding Jordan Cove as only time will tell.
Almost 30 percent of Coos County residents live below the poverty line, more than triple the number of Portland Metro residents living below the poverty line. The three rural country commissioners argued in the Medford Mail Tribune that: "While the Portland area benefits from multi-billion dollar investments from companies such as Intel and Nike and their suppliers, there's a political reality that people don't like to acknowledge: the urban rural divide is very real and actions like Senator Merkley's prove how real it is."
Can you describe what an investment of $10 billion would mean to South Coast, a region that has been economically depressed for decades, and why it is so necessary in helping fight rural poverty?
The construction and operation of a business of this magnitude will be a game changer for this region. This area has relied on the timber and fishing industries for centuries, and felt a tremendous economic blow with the dramatic decline of the timber industry in the late 1980s, early 1990s. The effects of the decline and its subsequent impacts were amplified by the fact that so much of our economy was riding on a single commodity. It has been, and will continue to be difficult to find our way forward without a diversification of industrial interest. Like I said before, the impact of new job opportunities (both short and long term), coupled with a robust tax base increase will give this area the boost it needs.
Besides Jordan Cove, what other projects are you working on for the Port of Coos Bay? What is your vision for the future of this region?
This is an exciting time here at the Port of Coos Bay. We continue to move forward with our efforts to deepen our navigation channel from 37 to 45 feet while widening from 300 to 400 feet. This will afford us the opportunity to accommodate much larger vessels in the near future, increasing our competitiveness in the global marketplace.
We continue to progress rehabilitative efforts on our 134-mile short line railroad. The Coos Bay Rail Line provides a crucial connection for local industry from the coast to Eugene where we tie in to the national Class I rail system. This is a critical part of the total composition of the Port since we aren't located on the I-5 corridor.
We have initiated a feasibility study to aid in the development of our marine dependent land holdings on the North Spit. Developing industrial marine infrastructure is essential to increase the region's ability to tie into the markets around the world.
As to our vision of the future, it is the same as it has been for over a decade -- this Port is the economic engine that drives the economy of southwest Oregon and the state. We are uniquely situated here on the coast. As the largest deep water coastal port between San Francisco and Seattle we are the best alternative to open Oregon to world markets. Our harbor is a mere 15 miles long and provides access to open seas in a matter of minutes. Our unique navigation channel is truly a gem for the state of Oregon that gives Coos Bay a tremendous advantage over other locations throughout the West Coast.
Back to Top
| 
