Pembina must pay carbon tax for Portland LPG site

OREANDA-NEWS. April 16, 2015. Canadian midstream operator Pembina Pipeline must pay a \\$6.2mn annual carbon tax to comply with amended zoning rules for its planned Portland, Oregon, propane export terminal.

The Portland Planning and Sustainability Commission (PSC) voted 6-4 in favor of amending the zoning code on 7 April, but also chose to adopt a City-Port intergovernmental agreement (IGA) to address some issues raised by local opponents.

The IGA requires Pembina to contribute \\$6.2mn/y to the Portland Carbon Fund to offset greenhouse gas (GHG) emissions from the propane. The fund will be used in support of projects aimed at reducing energy consumption and promoting renewable energy. The \\$6.2mn/y is an estimated calculation based on the market price for GHG emissions in Europe, which the PSC estimated at \\$6.77/mt of CO2e. This price will adjust according to the market value.

The IGA also stipulates that Pembina's onsite operations are run 100pc by Oregon renewable energy sources.

Other requirements include a public forum to address operating issues, implementation of safety measures, replacement of grassland habitat area, and liability insurance to cover a catastrophic event.

The project still requires final approval from the Portland City Council, the public hearing and vote for which are tentatively scheduled for 30 April.

Pembina's \\$500mn project will have the initial capacity of 37,000 b/d of propane, which will be sourced from Canada. Pembina expects to complete the project by first quarter 2018.