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Illustration: Annelise Capossela/Axios

The Trump administration recently touted its approval of America’s first terminal on the West Coast to export liquefied natural gas. There’s just one problem: It probably won’t be built.

Why it matters: The project in southern Oregon faces political and business hurdles serious enough that those who are following it say it will be shelved. Its problems embody the struggles facing a once-promising sector that's now struggling under the weight of the pandemic and more.

What they’re saying: “It’s not going to be built,” Sen. Jeff Merkley (D-Ore.) told Axios in a recent interview. “I’ve talked to a whole number of folks — several people who have been deeply involved in international finance of energy projects — and they don’t believe that the company can lock down the sales needed to justify the $6 billion investment.”

  • He declined to share who he has spoken with, but independent analysts agree with that general assessment.
  • “The circumstances around Jordan Cove have materially changed and the advancement of this project seems unlikely,” said Rob Rains, senior energy analyst, Washington Analysis.
  • Rains cited permitting problems, including a denial of a vital permit in February, land issues, and growing opposition to the project among the state’s politicians (like Merkley).

For the record: The company behind Jordan Cove, Canada-based Pembina Pipeline Corporation, declined to comment. It will provide an update on the project during its second-quarter earnings call with investors this Friday.

Driving the news: In early July, Energy Secretary Dan Brouillette announced a key federal approval of the project. At that time, Brouillette said it “encapsulates what the Trump Administration has been working hard on for the past three years — providing reliable, affordable, and cleaner-burning natural gas to our allies around the world.”

  • Last week, President Trump announced an Energy Department policy change that would grant export approvals for liquefied natural gas (LNG) projects out to 2050.
  • Although that move could help those already operating, it “doesn’t alter the outlook for a terminal that is trying to get off the ground” like Jordan Cove, said Erin Blanton, who leads the natural-gas program at Columbia University's Center on Global Energy Policy.
  • Industry officials have been trying for the last 15 years to export LNG from America’s West Coast. Its closer proximity to Asia’s energy-hungry markets is a key advantage of Jordan Cove, according to Fred Hutchison, president and CEO of LNG Allies, a trade group representing the sector.
  • The project has faced competition from newly operating LNG export terminals on the west coasts of Canada and Mexico.

The big picture: With America becoming the world’s biggest producer of oil and natural gas, companies have raced to build massive, multibillion-dollar facilities to liquefy and ship natural gas all over the world. Several have begun operating in recent years, leading to a boom in LNG exports.

Where it stands: But more than a dozen projects are still either awaiting government approval or not yet complete, according to government data.

  • Although it’s not uncommon for fewer projects to be built than are initially proposed, today’s circumstances are uniquely bad, analysts say.
  • Trump’s ongoing trade war with China (a huge market for the fuel) together with the pandemic, which is sapping global energy demand, is creating a one-two punch that has deflated a sector that was promising just a couple of years ago.

How it works: Jordan Cove’s struggles reflect the convergence and evolution of two national trends: Democrats and environmental activists increasingly opposed to natural gas, and oil and gas producers drilling their way into abundance — and therefore a glut and financial trouble.

  • Several years ago, the project was supported by most of the state’s leading Democratic politicians. Today, it’s opposed by most of them.
  • It had a window of potential approval in 2014, "but now it is past,” Rains said.
  • Other liberal states have rejected other fossil-fuel infrastructure projects in recent years on similar grounds, including New York and Washington state.

The intrigue: In our interview, Merkley said deciding to oppose the project — which he did in 2017 — was one of his “toughest examinations. I knew how much this infrastructure could do to that part of my state. I knew how many good-paying jobs would be in a $6 billion–$8 billion project.”

  • Ultimately, though, he said his concerns about natural gas’ impact on global warming, along with other concerns regarding the company, outweighed the imminent job creation.
  • The state’s other senator, Democrat Ron Wyden, once praised a federal government approval of the project in 2014, only to oppose it in March of this year.

What we’re watching: Whether the company pulls the plug — more likely when, given what I just laid out here — and which other companies seeking to export LNG do the same.

Go deeper

Ben Geman, author of Generate
Oct 23, 2020 - Energy & Environment

Biden looks to stem oil "transition" furor amid GOP attacks

Former Vice President Joe Biden. ANGELA WEISS / Getty Images

Joe Biden's campaign is looking to blunt attacks in response to his comments in Thursday night's debate about a "transition from the oil industry," as Republicans look to make the remarks a liability in the closing days of the race.

Driving the news: Biden campaign spokesperson Bill Russo, in comments circulated to reporters Friday afternoon, said the former VP "would not get rid of fossil fuels," but wants to end subsidies.

Civil rights leaders plan a day of voting rights marches

Martin Luther King III and Rev. Al Sharpton. Photo: Cheriss May/Getty Images

Civil rights leaders from Washington to Phoenix are planning marches on Aug. 28 to push Congress to pass new protections around voting rights.

Why it matters: A landmark voting rights proposal remains stalled in the U.S. Senate, as Sens. Joe Manchin (D-W.Va.), Kyrsten Sinema (D-Ariz.) and other moderates block efforts at filibuster reforms to advance a bill held up by Republicans.

Latinos twice as likely as white people to die from gunfire

Expand chart
Data: Violence Policy Center; Chart: Will Chase/Axios

Nearly 3,000 Latinos each year have died from gunfire in the United States over the last two decades, making them twice as likely to be shot to death than white non-Hispanics, according to a study from the Violence Policy Center.

By the numbers: Almost 70,000 Latinos were killed with firearms between 1999 and 2019, 66% of them in homicides, according to the center’s data analysis.