LNG Draws Fire

Today I read a pretty good (BALANCED) article regarding Liquefied Natural Gas (LNG)

I have to hand it to the hard workers over at Columbia River Business Alliance. They certainly have their brainstorming efforts down.

I don’t like to make a habit out of writing about (LNG), but there were several oddities that I just couldn’t resist.

The first oddity is the reason for shooting the flame thrower – The CRBA claims the lease should be investigated by the Governors office because the lease rate reflected siting a golf course and not an LNG terminal. Well, no, the lease was NOT based on siting a golf course OR an LNG facility. The lease was based on the appraised value of the VACANT land which was ZONED recreational. Governors office – please don’t waste your time AND OUR TAX DOLLARS investigating this.

As a former Port Commissioner and one of 5 who voted to approve the lease, let me tell you what my brain was thinking at the time – 500 construction jobs, $10m per year in property taxes ($250k of that would go to the port), and about 50 full time good paying jobs. I would also call this thinking “The Big Picture”.

Looking back, could we have asked for more money for the lease? Probably. Probably could have gotten it too. Why didn’t I think of that? Because our policy was to lease land based on 10% per year of appraised value. Which is exactly what we did. I would call this “The Small Picture”

This is why I’m so angry about the Oregon AG office’s assault on the former director of the port. It is so misguided in so many ways. Other than gather information from the company, the former port director had NO VOTE on the lease which puts a pretty big hole in their argument.

Another oddity – a quote from the director of CRBA Peter Huhtala stating the port should be charging $1m per year because of other deals struck with Astoria and Coos Bay. I guess I’m out of the loop on this because I am unaware of any LNG companies paying this much per year to either of these jurisdictions. Peter – you need to come forward with proof. I simply can’t believe it.

Yet another oddity – This time it’s a quote from the present Port of Astoria Director Jack Crider in which he states “But the lease was “a bad business deal, ” given hundreds of thousands of dollars the Port has spent in legal costs and staff time”. This one actually caused me to chuckle because based on the nutcase commission Jack has on his hands, we couldn’t have gathered enough in lease income to cover the follies of legal costs and staff time. Jack, if I were you, I would apply for some stimulus money to cover this because I don’t think your commission gets it. After all, it wasn’t our “bad business deal” that caused your legal costs and staff time. It was your comical commission who decided they were smarter than everyone else and voted NOT to approve the lease extension (which in effect caused your legal costs and staff time). And while I’m at it, and since Jack is so good at troubleshooting hindsite, lets see how far taxpayers are out of pocket in 4 years on the Tongue Point deal. Did it ever occur to you why your predecessor didn’t put the “deal” together? You’ll know soon enough.

So, once again Governor Ted, please don’t waste a nickle pursuing this folly. The AG office has already spent enough of our tax dollars on this. Please don’t throw good money after bad.


14 thoughts on “LNG Draws Fire

  1. I see a picture, as it has always been really, of five people(Port Commissioners) following a charismatic and obvioulsy self-proclaimed “Business Man” blindly into oblivion only to find out the man was “Not so big, just tall that’s all” from the old blues sandard, “Big Boss Man”.

    And Peter Hansen?

    He played all of you like a fine violin and sat back, through Peter Gearin, and watched you all stir up your own poison.

  2. It’s probably a good thing I never became active in politics, local or otherwise. I have anger management issues and pepper spray.

  3. The article reflects my memory of how the Port Commission came to the condlusion that it did. I also feel that any “bad business deal” was not the signing of the lease but, rather, the legal suit which the current Commission has initiated.

    Don McDaniel, former Port Commissioner

  4. gackster: the truth is not a lie. as all of this unravels (and it will in all good time) the readers here at the crazy world will learn the emperor has no clothes.

    patrick: we will remain philosophically disjointed. gearin did more good for the port in 5 years than his predecessors did in 80 years. you just believe too much what you read in the media (NOT HERE). see my above comment to the gackster.

    darev: but look at all the fun you are missing out on. politics has cost me dearly thanks to a few people i can no longer acknowledge their existence.

    don: nothing beats being there. and we were. like i said, it wasn’t a bad deal. it’s bigger than anything clatsop county has ever seen. no sense in getting greedy. it appears to be a bigger deal than the current commission can grasp. oh well, we’ll continue to buy them books – think i’ll start a new slogan – “No port commissioner left behind”. Thanks for visiting and give Helen a big hug for me!

  5. G – I just noticed your post. I believe your account of what went on in your mind; you are the authority of that. đŸ˜‰

    The appraisal in question clearly states that it is based upon the highest and best use being a golf course. The lease was for the purpose of an LNG terminal.

    In Coos Bay 147 acres of sand spit is leased for LNG development at $1,920,000 per year vrs $38,400 per year for the Skipanon site. That’s $13,061 per acre vrs your deal at $418 per acre.

    I understand that you saw jobs and tax revenue, but so did Coos Bay. Both situations were speculative to say the least, and explosively controversial.

    Do you think that you erred in any way by voting for that lease?

  6. peter: i didn’t say i saw a flying saucer.

    i tried to find the lease amounts you referred to and couldn’t find any accounting of any leases paid by coosbay or bradwood. you referred to both as being “$1m/year. can you point me in the direction of your source please?

    yes, jobs and tax revenue. there wouldn’t be any controversy if you guys would back off.

    regarding erroring (new word) on my vote for the lease – none. i still believe a facility of this magnitude will create financial benefits to our community that would make more lease pale in comparison. and in hindsite, it’s a good thing the rate is what it is. it may not have survived the bk otherwise. in other words, i stand by my vote.

  7. Try http://www.portofcoosbay.com/lng.htm
    The Jordan Cove LNG option payment has increased from $120,000 per month to $160,000 per month. That’s $1,920,000 per year – 50 times the $38,400 you negotiated for Mr. Hansen’s project.

    I didn’t say anything about Bradwood. There’s a lease option arrangement with Ken, but I don’t know the details or whether there is a provision for participation, etc.

  8. I believe a new mammal has evolved at supernatural speeds in the oregon coastal regions: The Furry Rumped Lease Weasel. Wish i had pictures for y’all but aint no html allowed in this here circus tent.

    G: logic and and bloodless recounting will win the day. Proceed!

  9. peter: if one reads the article that you are quoted in (oregonian) one would assume the port is realizing the lease amount when in fact they are turning it over for debt payment for the property. if the port of coos bay is realizing ZERO and the port of astoria is realizing ZERO, how is it different? ALSO, and because we were such sharp commissioners at the time, there is a blurb in the lease that the property will be reappraised every 5 years. suddenly the port is in the drivers seat.

    regarding Bradwood – this is your comment in the oregonian article – “Huhtala’s group estimates the lease should be bringing in “at least” $1 million a year based on other deals struck in Astoria and Coos Bay” it sounds to me like you are saying the lease agreement w/ken is bringing in a million. what am i missing?

    cworldj: You mention logic. What would Clayton say?

  10. G – With a pass-through lease arrangement at the Skipanon, the losers are the children who would benefit from revenue to the Common School Fund.

    Hmm…your reference to the article was not a direct quote about Astoria. It probably refers to Tongue Point’s current lease, on property DSL sold for $4 million in 2000. I wish that the Port would have been able to buy it then (for something less), although the recent downturn may have been stressful.

  11. peter: you’ve cornered yourself inside the box again. currently it is a pass through lease. with a new appraisal, it doesn’t necessarily need to be a pass through lease. I know you don’t want this to work. But take a look at the other side and see what’s possible to make it work. I did back in 04. It will work well for the POA. You either can’t see it or don’t want to see it. But it’s there.

    I am seriously concerned about the deal the current commission made with WA Group. I hope it works out. It doesn’t seem to pencil to me when you factor in maintenance and overhead. I think they jumped in without seriously crunching the numbers. What was the hurry?

  12. I eagerly await, from inside my box, the outcome of a new appraisal and the arrangement you envisioned. How would you like to see the lease go?

  13. peter: for starters I’d like to see the port to step up, do the right thing, and extend the lease before Oregon LNG sues them (us) into oblivion. This BS about the port laying claim to the land is just that – BS. We have already been down that road and no matter what Floy (can’t speak his name) says, it won’t change the fact the DSL owns the land. Smoke screen that is costing us tax payers dearly.

    As far as an “arrangement I envisioned” – There is no arrangement per-se. There is however an opportunity. For the children.

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