Link to Owner Dr. Robert B. Pamplin Jr.



TRIBUNE FILE PHOTO  - Fred Meyer fleet manager Nick Brocato pumps fuel into one of the retailers new LNG-fueled freight trucks in Clackamas. LNG produces fewer pollutants and carbon emissions than diesel fuel. Gregg Kantor, CEO of NW Natural, says these are exciting times to lead a natural gas utility.

But the 156-year-old Portland company’s reputation for providing clean energy is being severely tested, and its longterm future is hazy, as Oregon grapples with climate change wrought by the burning of fossil fuels.

For now, though, NW Natural is in an enviable position.

J.D. Power and Associates just named it best in the West for customer satisfaction among natural gas utilities and tied for second-best nationally.

Thanks to "fracking" drilling methods, the domestic supply of natural gas is so abundant that two companies are jockeying to build export terminals on the Oregon Coast. The ample supply of natural gas makes it one of the cheapest forms of energy.

“Our rates are where they were 15 years ago,” Kantor says, and the company expects to drop prices another 7 percent in November — its fifth rate decrease in seven years.

Crosstown rivals PGE and Pacific Power are looking to dump old coal-fired plants and substitute natural gas, which produces half the carbon emissions. NW Natural is in talks with PGE about expanding its Mist underground gas storage facility northwest of Portland to store gas for PGE, Kantor says.

Garbage trucks, buses, and freight trucks are increasingly shifting from diesel fuel — which produces cancer-causing emissions — to natural gas, which runs cleaner and releases less carbon emissions. And NW Natural is a national leader in modernizing its pipeline system to minimize natural gas leaks.

NW Natural has a good idea where it’s headed in the next five to 10 years, Kantor says.

After that, it’s anybody’s guess.

Despite the utility’s reputation for forward thinking and well-run operations, it’s a monopoly delivering fossil fuel at a time of mounting calls to minimize fossil fuel use to avert the most severe impacts from climate change.

COURTESY NW NATURAL - Gregg Kantor, NW Natural CEO NW Natural should be planning for ever-declining sales of natural gas in the next 20 to 30 years, says Angus Duncan, chairman of the Oregon Global Warming Commission. “I think they have to have an exit strategy,” Duncan says, where they reinvent themselves to play a “much smaller role than they play right now.”

Last month, the Portland City Council and Multnomah County Board of Commissioners passed resolutions barring the city and county from investing in most oil, coal and natural gas bonds.

By year’s end, the Portland City Council expects to approve a fossil fuel export policy, putting the city on record opposed to exporting coal, oil and, potentially, gas through its territory.

“There’s clearly a role for natural gas in helping to accelerate the transition to renewables,” says Michael Armstrong, deputy director of the Portland Bureau of Planning and Sustainability. But for the city, county and state to meet their climate change goals, Armstrong says, there shouldn’t be “huge volumes of gas” being sold down the road.

Part of the solution?

Kantor says natural gas should be viewed as part of the mix of solutions to address climate change.

“We’ve got a sustainability advantage,” he says. “Our product is lower-priced and lower carbon emissions by half compared to coal when used in electrical generation.”

TRIBUNE FILE PHOTO - NW Naturals Mist facility in Columbia County is a vast underground storage site for gas. PGE may contract with NW Natural to store of its gas there as well. “Natural gas is a great complement to renewables,” Kantor says, providing a steady source of energy when the wind isn’t blowing and sun isn’t shining.

Distributing natural gas via pipelines directly to customers is also much more energy-efficient than burning gas to produce electricity, Duncan says. That means NW Natural's product will continue to emit fewer carbon emissions than electricity produced by burning natural gas.

There’s ample science behind the natural gas industry’s claim to be a cleaner form of energy.

“Compared to oil or coal, gas has very little or relatively little of the conventional pollutants,” concedes Fred Huette, a Portland Sierra Club activist who represents the organization in international climate change meetings, including the upcoming Paris talks.

Natural gas combustion releases far less particulate matter, mercury, sulfur oxides and nitrogen oxides than gasoline, diesel or coal. Those pollutants are leading components in smog and a major cause of respiratory and heart ailments.

Heavy-duty trucks that switch from diesel fuel to compressed natural gas or liquefied natural gas release far fewer pollutants and lower carbon emissions. While natural gas prices are low, that also can save companies large sums of money on fuel, which is why companies like Fred Meyer are switching their trucking fleets to natural gas.

NW Natural won Oregon Public Utility Commission approval last year to build a main compression station to serve companies with compressed natural gas fleets, says Bill Edmonds, NW Natural’s director of environmental management and sustainability. Seven of the utility’s customers have put in their own compression facilities, Edmonds says.

In coming years, NW Natural hopes to new markets in apartment buildings, where it is largely shut out, via a new generation of individual fuel cells, Kantor says. Now most apartment tenants rely on electric heat, which in Oregon comes largely from burning coal.

NW Natural also is hoping to win approval to expand into Oregon communities that still lack natural gas service, such as Estacada and Dayton, Kantor says.

Dimmer long-term view

For the parts of the process that NW Natural controls, Armstrong gives it high environmental marks. The utility is working to harness renewable biogas from dairy operations, which generate massive emissions of methane, a highly potent greenhouse gas. And it’s working with the city of Portland to harness biogas from sewage at the city’s North Portland treatment plant, and distribute the gas to customers via its local pipeline system.

“I think NW Natural has been very forward looking in thinking about the future of the gas industry,” Armstrong says.

Environmentalists agree that natural gas is preferable to burning coal, and plays an essential role — for now — in helping utilities assure a steady supply of energy by complementing intermittent solar, wind and hydro power.

But the carbon-reduction benefits from replacing coal only last for about 10 years, Duncan says. After that, he says, emissions will hit a wall — remaining steady rather than continuing to decline as needed.

To move to a clean energy future as quickly as possible, says Huette of the Sierra Club, we need to rely on greater energy efficiency, particularly in buildings, along with more solar and wind energy. By building more wind turbines in different states, he says, that assures there’s more chance of the wind blowing somewhere at any given time, if not in Oregon. What’s essential, he says, is that we not keep relying on natural gas “as a main base load resource for power production.”

One of Duncan’s biggest fears is that utilities like PGE and Pacific Power will take the easy way out by substituting natural gas for coal in their plants, and then having to keep those gas-fired plants in operation another 30 or 40 years to pay off their investments.

In about 10 years, Duncan warns, “We need to have kicked our gas habit pretty much entirely in the power plants.”

Fracking soils land, reputation of nation’s natural gas industry

The advent of “fracking” to extract natural gas in the United States has boosted supply and lowered prices, but makes it harder for the industry to defend its longstanding claim to be a clean form of energy.

Fracking, or hydraulic fracturing, combines horizontal drilling with the massive injection of chemicals and water to release gas from underground shale rock formations. It often results in widespread soiling of land, water and air near the drilling sites, which pockmark several states.

Portland environmentalists’ opposition to fracking helped motivate a successful campaign, so far at least, to prevent Pembina Pipeline Co.’s proposed propane gas export terminal at the Port of Portland this spring.

NW Natural doesn’t do any fracking; it distributes natural gas provided by others. But most of the domestic natural gas produced on land now comes from fracking, says energy expert Fred Heutte, a Portland Sierra Club activist who serves on the group’s Federal and International Climate Campaign.

NW Natural CEO Gregg Kantor doesn’t deny that fracking has caused environmental damage. But he argues that it’s a new technology that only took off in the mid-2000s, and says it’s rapidly improving.

For one, he says, drillers found a way to create one main drilling pad and then use horizontal underground drilling in 20 to 30 directions to tap new shale seams, without having to create new drilling pads each time.

“There is absolutely no reason why it shouldn’t be able to be produced in an environmentally responsible way,” Kantor says. Big companies increasingly “get that,” he says. “They’re already working very hard at changing their operations.”

People in the business tell him they foresee a day when the fracking process no longer requires the use of chemicals or even water.

Kantor acknowledges that states like North Dakota have been lax at regulating fracking practices, but says the New York Times has exposed such practices, serving as a needed watchdog.

Environmentalists aren’t convinced.

The industry tenaciously resists state and federal regulations to clean up fracking, Heutte says.

“Expecting the industry to do that without tight regulation, fully enforced, is like expecting VW to comply with the law on emissions measuring from their vehicles,” says Angus Duncan, chairman of the Oregon Global Warming Commission and president of the Bonneville Environmental Foundation.

Right now the cost and burden of cleaning up pollution from fracking is being passed on to future generations, says Michael Armstrong, deputy director of the Portland Bureau of Planning and Sustainability.

Proposed Coos Bay LNG project could drive up Portland natural gas prices

Fracking has revolutionized the U.S. natural gas supply so much that two import terminals proposed on the Oregon Coast morphed three to four years ago into export terminals instead.

The one closest to Portland, a liquefied natural gas or LNG terminal proposed in Warrenton, has since suffered a string of political and court setbacks. But the Jordan Cove LNG project proposed in Coos Bay passed a key hurdle recently when the Federal Energy Regulatory Commission issued a favorable Environmental Impact Statement.

Environmentalists and some property owners hotly oppose the Jordan Cove terminal and accompanying 234-mile pipeline project, and are pushing Oregon Gov. Kate Brown to reject it.

Many in Coos Bay welcome the multi-billion dollar project, which would amount to one of the costliest industrial developments ever in Oregon.

In the Portland area, the project is likely to drive up natural gas prices, because it will decrease the supply of gas here.

“There’ll be times when we’ll be competing for the same gas,” says Gregg Kantor, NW Natural CEO.

He estimates the project could raise natural gas prices here up to 2 percent.

Putting a terminal in Coos Bay could be risky because of the Cascadia Subduction Zone, a major offshore fault that could cause a huge earthquake and tsunami there, says Fred Heutte, a Portland energy expert and Sierra Club activist. But economic competition could be a bigger issue, he says. Though it’s slated to be the first LNG export facility on the West Coast of the U.S., there are several competing proposals in Canada, he says. “The economics is really the hard one for them.”

Utility tamps down on methane leaks

As much of the world frantically tries to ramp down the use of fossil fuels — the primary cause of global warming — the natural gas industry pins its hopes on the fact that it produces only half the carbon emissions of coal.

But that advantage slips away if too much natural gas escapes into the atmosphere. Methane, the main component of natural gas, commonly leaks during all three stages of the process: at the drill site, in interstate gas pipelines, and local distribution systems that pipe gas into homes and businesses.

Methane is at least 20 times more potent than carbon dioxide as a greenhouse gas, so small leaks have a huge environmental impact.

The Environmental Protection Agency currently estimates that 1.3 percent of methane leaks during the entire process, says Bill Edmonds, NW Natural’s director of environmental management and sustainability. Natural gas loses its emissions advantage over coal when the leakage rate hits 6 percent to 8 percent, he says.

Fred Huette, who represents the Sierra Club in international climate talks, disputes that.

“Roughly speaking, analysts say if the leakage rate is above 3 percent, it really starts to look not much better than coal,” Huette says.

Any methane leak can be dangerous and costly to companies.

In August, President Obama proposed the nation’s first limits on methane leaks, hoping to reduce leaks 20 to 30 percent.

The average methane leakage attributed to local distribution systems like NW Natural is only 0.24 percent, Edmonds says, and its rate is lower than that.

NW Natural, which serves much of Oregon and Southwest Washington, has moved aggressively to replace old cast-iron and bare-steel pipes with plastic and coated-steel pipes, which leak less. It has no more cast-iron pipes and will remove the last of its bare-steel pipes this year, Edmonds says.

“The good news on the NW Natural gas side is we are among the tightest utilities in the country.”

Steve Law can be reached at 503-546-5139 or This email address is being protected from spambots. You need JavaScript enabled to view it., or Twitter at

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