This column originally appeared in The Daily Journal of Commerce in Buildings Bridges and Roads
By: Mike Salsgiver
In the 1970s, the southwestern Oregon economy was thriving due in large part to the presence and performance of such traditional industry sectors as forest products, fisheries, and agriculture. Today, the region remains in the throes of a deep recession that has plagued it for over three decades. In the absence of a huge resurgence in these basic industries, the development of the Jordan Cove Energy Project is an essential and potentially historic opportunity to revitalize the southwestern coast of Oregon.
Jordan Cove is a proposed Liquefied Natural Gas (LNG) terminal and storage facility to be located on the bay side of the North Spit of Coos Bay, Oregon. The project would redevelop and modernize of the Port of Coos Bay’s infrastructure and provide the cornerstone for renewed economic development in an area that has suffered recession for decades.
Jordan Cove consists of three primary projects:
- the Jordan Cove export facility (located on the North Spit in Coos Bay) to liquefy and transfer natural gas to maritime vessels;
- the Southern Dunes Power Plant, which will provide continuous power to the export facility; and
- the 234-mile Pacific Connector Gas Pipeline to deliver natural gas to the facility from North American production sources (Canada and the United States’ Rocky Mountains). Currently, these production sources do not have another way to transport their gas to the marketplace.
The terminal project will immediately boost southwest Oregon with a total capital investment of $6 billion. During 42 months of construction, the project will require an average workforce of 930 workers. The project also will create 200 permanent middle-class jobs.
The Pacific Connector Gas Pipeline Project also will boost the region with a total investment of $1.5 billion that, during 24 months of construction, will tap into the efforts of 1,400 workers along the pipeline route through Klamath, Coos, Douglas and Jackson counties.
Oregon has been fortunate to attract immense private investments in the high-tech industry. While these investments have helped Washington County, economic benefits in other parts of the state are much less clear. During the Great Recession of 2008–14, Oregon was fortunate to see Intel invest $5 billion in its D1X Project. That is an enormous number, and it helped lessen the impact of the worst economic downturn since the Great Depression. And yet, the Jordan Cove project would be 40 percent larger – an $8 billion project.
From a building industry perspective, the Jordan Cove project would provide more than 2,000 construction jobs at its peak, workers would be locally sourced from surrounding areas, the job length would lead to job certainty for many (a rare feat in the construction trades), and apprentices would be able to begin and end their apprenticeships on the same project.
Following construction, permanent employment at the Jordan Cove terminal and the Pacific Connector Gas Pipeline would include 146 direct jobs, 54 indirect jobs paid by Jordan Cove (sheriff’s deputies, firefighters, tugboat crews, and emergency planners), 404 other indirect jobs, and 182 induced jobs, for a total of more than 750 total family-wage jobs along our south coast.
Dave Kronsteiner, president of the International Port of Coos Bay Commission, president of West Coast Contractors, and a long-time board member of Associated General Contractors (AGC), has been working to bring the Jordan Cove Energy Project to life for the past 11 years. He noted that when Coos Bay was the largest lumber exporter in the world, there were 350 ships coming into and going out of the port each year. Today, Coos Bay gets about 50 ships per year. Due to its proximity to Asia (9 days instead of 22 days from the Gulf) and its 90-minute travel time to open waters, Jordan Cove would bring an additional 100 ships per year.
Along with the terminal, power plant, and pipeline, Jordan Cove would build the Southwest Oregon Regional Safety Center (SORSC). The SORSC plans to include a full-time fire station and emergency response crews dedicated to the Jordan Cove facility (paid for by Jordan Cove); a Coos County Sheriff’s Office substation; offices for the port and U.S. Coast Guard; and world-class training facilities.
There is also a plan to partner with Southwest Oregon Community College to create an LNG Fire Training Center, a first on the West Coast. As greater use of LNG as a maritime and surface transportation fuel increases the need for special LNG training, SOCC and Coos Bay will be poised to be the West Coast center for this specialized training.
Additionally, the Jordan Cove terminal itself will be built to withstand a 9.6 seismic event and will likely be the safest location along the southwestern coast should a large seismic event occur as predicted. In an industry where safety reigns supreme, Jordan Cove and Coos Bay residents have worked tirelessly to fashion a plan that respects the safety of workers, benefits the local community and economy, and protects the public should disaster strike.
One of the Jordan Cove project’s most important elements is the proposal to establish a Community Enhancement Plan. Because the proposed location of the facility is in an enterprise zone, Jordan Cove can seek tax exemption for 19 years. Instead, the company has crafted a plan that takes the money it would have paid in taxes and creates a community service fee in the amount equal to the tax exemption. The total fee equals roughly $200 million over 19 years. Of that $200 million, 50 percent would go to school districts in the area, 25 percent would go to public services, and 25 percent would go to waterfront redevelopment.
AGC hopes the U.S. Department of Energy is able to recognize the positive impact Jordan Cove would have on our industry and our state’s economic development. With that recognition, we hope the agency approves it as an LNG export facility to Non-Free-Trade Countries (like Japan and China). With that approval, the men and women of Oregon’s construction industry, and the south coast in particular, can get to work and begin to reverse the devastation caused by 30 years of economic struggle.
Accomplishing this requires no new government program and no expenditure of additional government funds. It simply requires government to unleash the mighty power of private enterprise and put the region on a path to a secure future.
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Mike Salsgiver is executive director of the Associated General Contractors Oregon-Columbia Chapter. Contact him at 503-685-8305 or mikes@agc-oregon.org.