A state agency’s denial on Monday of a critical water permit under federal law and the lack of support from state energy offices in western states could threaten to shut down a liquefied natural gas export terminal meant to draw the fuel from western states and ship to customers across the world, including Asia, resulting in billions in missed economic gains and the loss of critical rural jobs.

The decision by Oregon’s Department of Environmental Quality to not certify the proposed Jordan Cove liquefied natural gas terminal using the Clean Water Act could halt or delay the production and further development of resources in the Uinta basin in Utah and the Piceance Basin in Colorado.

“DEQ does not have a reasonable assurance that the construction and operation of the Project will comply with applicable Oregon water quality standards,” the decision letter read. However, the agency made the decision “without prejudice” meaning that the developer, Pembina Pipeline Corp., could re-apply and address the DEQ regulators’ concerns.

Supporters of Jordan Cove blasted the decision to deny certification based on Section 401 of the Clean Water Act, saying that the regulators not only blocked the project from proceeding but deny the ability of states and tribal nations to foster self-determination, promote economic development, and mitigate environmental concerns like flaring by providing a market for the area’s natural gas resources.

“Opportunities to export natural gas to global markets supports access to clean, affordable supplies of energy while continuing to build robust outcomes for our rural communities,” said Laura Nelson, Energy Advisor and Executive Director of the Utah Governor’s Office of Energy Development. “Creating a west coast option for LNG exports can provide a clear pathway to realizing these values.”

Colorado’s Rose Pugliese, a Mesa County Commissioner and another member of the Western States and Tribal National Natural Gas Initiative (WSTN) agreed.

“Decisions made on Jordan Cove in Oregon impact rural economies in western Colorado,” she said. “For us, this is an issue of job creation and rural economic development,” she added.

This year, other states like New York have used the Clean Water Act to prevent natural gas pipeline projects, like the Constitution pipeline, from moving forward by denying water quality permits, including projects approved by federal regulators and neighboring states, like Pennsylvania. The decision to deny permits has put heavy constraints on natural gas supplies for customers and driving up costs.

In April the White House launched an executive order meant to clarify Section 401 of the Clean Water Act from both the Department of Energy and the Environmental Protection Agency. The move came in response to the blockage of the Constitution Pipeline that crosses Pennsylvania into New York. The Federal Energy Regulatory Commission (FERC) had already given approvals in 2014 and 2016, before New York’s water permit denials held up the project.

A similar Section 401 denial with prejudice in Washington State halted a coal export terminal in 2019.

In addition to the Oregon rejection, a lack of support among some Democrats in the region, including Colorado Gov. Jared Polis, have created uncertainty for the Jordan Cove project and the prospect of natural gas development overall.

The Polis administration has adopted an official position of neutrality on the liquefied natural gas project projected to bring billions in economic benefits and hundreds of thousands of jobs to western states like Utah and Colorado, a leading state official said last week.

Polis tapped Will Toor to become Colorado Energy Office Executive Director in January, a cabinet-level position. Toor was speaking at the Society of Environmental Journalists’ “Straddling the Climate and Policy Divide” event last week at the Colorado State University Denver Center.

“This is referring to a project called Western States Regional Natural Gas Initiative [WSRNGI] that was really focused on the export of natural gas from the west coast, sort of building how you would get natural gas from the west slope to the west coast, and it was very supportive of building export infrastructure, things like Jordan Cove,” Toor said.

“The Polis administration position on that export infrastructure is one of neutrality, so the administration is not supporting or opposing that export infrastructure and because of that we thought that it would be inappropriate to be part of a report specifically advocating for that,” he added.

Toor previously served as a Boulder County commissioner from 2005 to 2012 and the Mayor of Boulder from 1998 to 2004.

WSRNGI’s broad stakeholder groups included industry (Anadarko, BP), the Colorado Department of Natural Resources, Colorado Oil and Gas Association, Environmental Defense Fund, Gov. Jared Polis’ transition team, the Navajo Tribe, the U.S. Departments of Energy and Interior, and Western Energy Alliance.

Western Wire is a project of Western Energy Alliance.

Despite broad bipartisan support across the west, Polis hesitated to endorse Jordan Cove during his 2018 gubernatorial bid.

The 2019 report, “Natural Gas Markets for the Western States and Tribal Nations,” released by the Consumer Energy Alliance and co-written by Research Partnership to Secure Energy for America and Mercator Energy, found that liquified natural gas exports could add nearly $93 billion per year to Gross Domestic Product and provide nearly 433,000 jobs.

An earlier 2013 report estimated $6 billion in economic benefits and 38,000 jobs for Colorado and $4 billion and 15,000 jobs for Utah.

Released in April the report was commissioned under former Gov. John Hickenlooper’s Colorado Energy Office, along with the Utah Governor’s Office of Energy Development, Colorado Mesa University’s Unconventional Energy Center, the Ouray and Uintah Utes, and joined by Garfield, Mesa, Moffat, and Rio Blanco counties in Colorado and the LiUNA Local 720 trade union.

“Through the construction of liquefied natural gas pipelines and a west coast export terminal, such as the proposed Jordan Cove LNG export terminal, Ute Energy can gain access to new energy markets that will alleviate the ongoing marketing and sales inefficiencies,” the Ute Tribal Business Committee said upon the report’s release. “This would also increase the Ute Indian Tribe’s income and assist in its ongoing efforts of economic development and providing essential services for its tribal members,” they added.

According to the report, the Coos Bay, Oregon export terminal would be the best way to bring the natural gas of the west to the export markets located in Asia.

“The most promising U.S. LNG export option on the U.S. Pacific Coast is the proposed Jordan Cove LNG liquefaction facility located in Coos Bay, Oregon. The Jordan Cove LNG project, if completed, will become the best-positioned LNG export terminal in the U.S. to serve markets in Asia. The key advantage that Jordan Cove enjoys is a significantly shorter shipping distance to Asia relative to other LNG export terminals in the U.S.,” the report authors wrote.

In 2016 the United States Geological Survey (USGS) released a report upping its estimate of technically recoverable natural gas in the Mancos Shale deposit from 1.6 trillion cubic feet of natural gas to 66.3 trillion, a staggering forty-fold jump.

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