Jordan Cove will provide economic benefits to Southern Oregon
by Todd Goergen
Those who have lived in Southern Oregon for most of their lives know that $10 billion private investments don’t come along very often. Well, never, to be exact. Slightly less rare is a business investment that has the ability to provide economic benefits to so many Oregon communities for generations to come. Jordan Cove is that investment.
Many Oregonians have been following the Jordan Cove Project since 2005. Since then, we’ve seen project owners come and go, global LNG markets shift, permitting processes seemingly succeed and others fall through and multiple waves of community engagement. Southern Oregonians hungry to restore timber-based economies rode a roller-coaster. But this time around, things are different.
Pembina took ownership of the project in late 2017 after acquiring Veresen, who owned the project, and since then, has been distinguishing is culture and approach from predecessors and made great progress toward making Jordan Cove a reality. If the recent Federal Energy Regulatory Commission (FERC) hearings in Coos, Douglas, Jackson and Klamath Counties were any indication, support for the project is growing as more Southern Oregonians are learning about the company, and the benefits the project will have for communities in the four impacted counties (Coos, Douglas, Jackson and Klamath).
The economic benefits of Jordan Cove are unlike anything Southern Oregon has seen for many decades. With a pipeline asset stretching across 229 miles, this project has the potential to generate new funding for public services like fire departments, schools, and county government and infrastructure to the degree that many of these communities haven’t enjoyed since the peak timber years in the 1970s.
Pembina is expected to pay approximately $48 million annually in state corporate taxes, roughly 5% of the recently passed Corporate Tax Package and roughly equal to the total amount that all manufacturers in the state of Oregon pay annually.
According to an independent analysis by Portland-based economic consulting firm, ECONorthwest, Jordan Cove will add $1.87 billion annually to Oregon’s GDP, the equivalent of 0.89% of the state’s current total GDP, creating a major new infusion of much-needed revenue.
On a local level, had Jordan Cove been operating in 2017, it would have paid an additional $60 million in annual property taxes across Coos, Douglas, Jackson and Klamath Counties, making it the largest property tax payer in each of them. This revenue would include an estimated $10.6 million in annual property taxes to K-12 public schools in the four counties, which could fund an additional 112 new, full-time teachers, in addition to providing funding for public safety and firefighting. All through new investment. All without raising taxes.
Coos County, where the LNG terminal would be built, expects to see $2.8 million each year for public schools, more than $300,000 each year for community colleges, more than $350,000 each year for libraries, more than $280,000 in tax revenue to local fire districts – the equivalent of paying five new firefighters – and more than $600,000 each year for county government and infrastructure. Coos County will also benefit from Jordan Cove’s proposed Community Enhancement Plan, which will direct more than $500 million in Enterprise Zone tax savings to local governments, keeping tax revenues local and ensuring local communities benefit from the Project.
Douglas County is expected to receive $4.6 million in permanent tax revenue from Jordan Cove each year, including more than $280,000 each year for community colleges, more than $170,000 each year for public safety, fire and hospitals and more than $700,000 each year to county government and infrastructure.
Jackson County will receive an estimated $5.3 million in permanent tax revenue for Jordan Cove annually, including $1.1 million annually to county government and infrastructure, more than $350,000 each year for community colleges and more than $230,000 in tax revenue to local fire districts. This increased revenue will help Jackson County fight one of the largest threats facing Southern Oregon today – wildfires – by providing funding for the equivalent of four new firefighters.
Klamath County is also expected to receive from Jordan Cove an estimated $5.3 million in permanent tax revenue each year, including more than $1.3 million to county government and infrastructure, more than $600,000 each year for public safety, fire and hospitals, and more than $230,000 each year for community colleges. This includes more than $410,000 in tax revenue to local fire districts, the equivalent of seven new firefighters.
In addition to the tax revenue that Jordan Cove will contribute on a state and local level, the Project is estimated to significantly contribute to local spending both during construction and after start-up. ECONorthwest estimates that Jordan Cove and its contract employees will contribute $95 million to local spending during construction and $14 million each year during operations. This influx of local spending will benefit local businesses in Southern Oregon in sectors like grocery, retail and hospitality, providing a much-needed economic stimulus to distressed rural economies. Throughout the duration of the Project, Jordan Cove itself plans to spend $2.88 billion directly with Oregon businesses.
On a county level, Coos County expects to see $70 million in annual local spending from workers during construction and $29.5 million in annual local spending from workers during operations. Similarly, Douglas County expects $18.7 million during construction and $1.3 million during operations, Jackson County anticipates $38 million during construction and $1.2 million during operations, and Klamath County expects to see $7.7 million during construction and $390,000 during operations.
An additional public benefit to the entire region and to Oregon, is that the pipeline can originate at a gas transmission intersection near Malin and be shipped from the Oregon International Port of Coos Bay, making use of one of Oregon’s most underutilized state assets.
The Project also represents additional investment in, and modernization for the Port. Once the largest timber export port in the world, the Port of Coos Bay has seen utilization and investment steadily decline over time. The Jordan Cove Project would directly invest in improving marine-related infrastructure, capacity and capability, such as the procurement of four state-of-the-art tractor tugs with firefighting capabilities, active ship escort and emergency towing and rescue capability, and procurement and set up of a private vessel traffic information system. Demonstrating how business investment multiplies, Jordan Cove will require about 110 new vessel calls to the Coos Bay harbor (more than a 300% increase), one of only two state ports in Oregon. Each vessel call generates approximately $603,000 in direct benefit and over $1.3 million in indirect or total economic benefit. That means that every year, vessel calls at the JCP terminal will generate an additional $150 million in positive economic impact. (Source: Oregon International Port of Coos Bay, Federal Navigation Channel economic analysis). Further, the U.S. Army Corps of Engineers allocates funding for channel and ocean bar maintenance based upon cargo tonnage and a cost/benefit ratio. The significant additional tonnage will help ensure federal maintenance of a safe navigation channel and ocean bar crossing, benefit ships, commercial fishing boats, and recreational boats alike.
In addition to the tax revenue and local spending that will result from Jordan Cove, the project will provide much-needed jobs to Oregonians in areas that have long faced high levels of unemployment. During peak construction, Jordan Cove will provide 6,000 construction jobs, in addition to 8,500 spinoff jobs during each year of construction. During operations, the Project will provide 215 permanent, family wage jobs and is estimated by ECONorthwest to contribute 1,500 spinoff local jobs during operations. These jobs will directly benefit local labor and trade organizations, who have helped conduct surveys and projections for available works, prioritizing local and Oregon first for recruitment, followed by the northwest as a priority.
Pembina also has demonstrated it doesn’t prioritize jobs over the environment. In addition to exporting low-carbon LNG to coal-burning Asian countries to help decrease global greenhouse gas emissions, Pembina has purchased significant land parcels for wetland mitigation, restoration and enhancement, as well as Old Growth forestland for preservation.
Jordan Cove would be a game changer for communities in need of economic stimulus, in addition to providing statewide economic benefits. The Project is currently working through the local, state and federal regulatory process and expects to receive its FERC permit in January 2020.
A Boost for Local Businesses
The construction and operation of the facility will create temporary and long-term revenue for local businesses, either as official suppliers to the Project or through increased business from a growing workforce.
North Bend business owner and off-road vehicle enthusiast
Co-president, Boost Southern Oregon
Having lived and worked all his life on the Southern Oregon coast, Todd knows well the concerns for the area’s economic future. As long-time business owner of Arctic Ice (now Reddy Ice) and a part of the family-owned Box Car Hill Campground, he has dealt with the problems of lack of skilled labor and skilled employees leaving the area for better situations. He considers the Project an opportunity for the local economy and employment, while at the same time maintaining what is special about the area.
Based on our County’s Comprehensive Land Use Plan, I believe the Project and preexisting recreational activities associated with the area are compatible and adequate space separates these uses.