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10.15.2008  
 

Willamette growers fight pipeline plans

Proposed natural gas channels would run through prime vineyard acreage

 
by Peter Mitham
 
 
Oregon Natural Gas, Montinore Vineyads
 
Rudy Marchesi's Montinore Estate vineyards, in the proposed path of LPG pipelines, were just certified organic and Biodynamic this year.
Willamette Valley, Ore. -- Rudy Marchesi of Montinore Estate in Forest Grove, Ore., is as much a fan of natural gas as the next person, and thinks there's every need for the infrastructure required to distribute it to customers such as himself.

Unfortunately, plans for two new natural gas pipelines could be bringing Marchesi and several other vineyard owners in the Willamette Valley a lot more than the convenience of natural gas.

Palomar Gas Transmission LLC and Oregon Pipeline are both planning pipelines to carry natural gas from import facilities at the mouth of the Columbia River to Molalla Station in eastern Oregon. The new lines would boost the natural gas available to customers in the Willamette Valley as well as customers in California, which accounts for about 60% of West Coast natural gas consumption.

Marchesi's 230-acre biodynamic vineyard lays in the path of one of those pipelines. Giving up a portion of his acreage for a pipeline right-of-way could wind up costing him hundreds of thousands of dollars.

Marchesi currently is looking at losing four acres of Pinot Noir vines during construction and two acres for the life of the pipeline. While he has 112 acres of Pinot Noir, the block in question is 26 years old and yields grapes that often go into his reserve bottling.

He ran through the calculations and said that his loss might be $25,000 per acre per year. "Two acres of good Pinot Noir is a big deal to me. That's our most high-value product. I don't have enough to sell right now, and that's how I pay my bills," he told Wines & Vines.

While seed grass and field crops such as corn are allowed on the right-of-way, woody plants such as grapevines and fruit trees are not permitted, in case maintenance crews need to access the line. Moreover, the root systems of vines pose a threat to the pipeline itself, which would typically lie at a depth of five feet and carry gas under 1,200 psi of pressure.

While the utility companies compensate landowners for land lost due to the pipeline, it's usually only for fair market value of the property rather than compensation for ongoing production losses. "They figure it as just agricultural land," Marchesi said. "If they're going to cut two acres out of my Pinot Noir vineyard, we're talking hundreds of thousands of dollars in lost income. And they look at farmland values as $15,000 an acre or something. So I don't think there's just compensation."

Marchesi isn't the only grower affected. Steve Wick chairs the Yamhill County LNG Citizens Advisory Committee, which counts several vineyard owners among its supporters. He estimates that between seven and 10 vineyards in Yamhill County could be affected by pipeline construction.

The work would disrupt not only decades-old vineyards, but also critical infrastructure such as drainage systems. Wick fears that some growers could face years of construction, given that Palomar hopes to complete its line in 2011, while Oregon Pipeline hopes to be in operation by 2013.

Wick says about half of the affected landowners in Yamhill County oppose the line, which will probably be subject to eminent domain when land acquisition for the lines start. Any challenges to the compensation the pipeline companies provide must go through the federal courts system.

Confusion regarding the final routes for both pipelines hasn't helped matters, Wick said. It's not only growers who are stymied: Oregon Governor Ted Kulongoski wrote a letter to the Federal Energy Regulatory Commission, which reviews pipeline proposals, expressing "continuing frustration" this past July with the commission's review of pipeline plans. Routing changes were one of the factors complicating matters, the letter said.

Henry Morse, project manager for the planned Palomar pipeline, downplayed growers' concerns (Oregon Pipeline CEO Peter Hansen did not return a call from Wines & Vines prior to deadline). Current routing of Palomar's line through western Oregon is set to impact just 2.9 acres on two properties during construction and a mere 0.9 acres post-construction, Morse said. That total distance amounts to no more than one-fifth of a mile.

Morse added that growers should receive compensation at full market value for the land, because grapes are a high-value crop. "We've made a very conscious effort to avoid vineyard land where possible," he said, noting that an early change added eight miles to the length of the 215-mile pipeline to avoid vineyards. The line was routed further south and west, "primarily to avoid prime vineyard land."

The reassurances aren't likely to soothe the mounting opposition to the line, however, especially as speculation mounts that the import facilities proposed to supply the pipelines could in fact be built to export natural gas to Asia. Gas prices in Asia have followed oil prices skyward, meaning domestic natural gas is now less than half the going price of natural gas from Asia.

A planned import facility in Kitimat, British Columbia, announced earlier this year that it would proceed as an export facility, and Marchesi warned that the fears concerning the two import facilities in Oregon are justified. "It's not in the national interest for us to bring in expensive natural gas when we can get good domestic natural gas at a much lower price," he said.

"Something smells wrong about this whole program," he said. "It's a bad idea all around."
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