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CEO says energy costs headed to stratosphere

by: Rick Swart, Mark Dodson, chief executive officer of NW Natural, tells community leaders in St. Helens that energy prices are going to go up significantly over the next few years as the result of a confluence of factors.

If your pocketbook is smarting from $3.50 a gallon gas, just wait until Oregon's clean energy initiative kicks into high gear. The Oregon law, coupled with proposed climate change legislation at the national level, will likely send energy prices into the stratosphere, according to Mark Dodson, chief executive officer of NW Natural.

'We're at a tipping point between supply and demand,' Dodson told about 40 Columbia County civic leaders last week during an energy summit hosted by his company.

The Portland-based power company chief predicted a dramatic increase in energy prices over the next few years as utilities work to comply with the Oregon Renewable Energy Act. The legislation, adopted last summer by the state legislature, requires Oregon's largest utilities to produce 25 percent of their electricity from renewable sources by the year 2025.

'That's an unbelievable commitment on our part,' said Dodson, who suggested that energy companies will be looking primarily to wind and solar power to make up the gap since coal and nuclear power are politically unacceptable.

'I'm not here to knock renewables,' he said, 'but it's going to be very expensive.'

Several other factors are converging to create a perfect storm, of sorts, for energy prices, which could further strain an already tight economy.

First, rapidly escalating demand in emerging economies is complicating the global energy picture.

If that trend continues and those countries reach the same per capita usage as in the United States, 'It won't be sustainable,' said Gregg Kantor, president and chief operating officer of NW Natural. Additionally, more competition from other regions of the United States, and national consciousness focused on global warming and the need to reduce greenhouse gases, he said, 'is creating a dash to natural gas.'

The NW Natural executives warned that Oregon and the Pacific Northwest protect their energy interests by improving access to gas by building additional pipelines and supporting plans to construct liquefied natural gas (LNG) import terminals in the region. An LNG terminal is proposed at Bradwood Landing on the Columbia River a few miles north of the Columbia County border, and the idea of building one at Port Westward has also been kicked around over the years.

Kantor likened the benefits of having LNG terminals in the region to the benefits of the Northwest's hydroelectric dams.

'There are amazing benefits to being close to an LNG terminal,' he said. 'If we don't get access to LNG, we believe the competitiveness of the Northwest will suffer.'

Better access translates to better prices, added Dodson, which is why NW Natural is also supporting a plan to build a gas pipeline from Madras in central Oregon to Canby in the Willamette Valley.

Affordable energy and energy developments are crucial to the economic future of Columbia County, said Tony Hyde, chairman of the Columbia County Board of Commissioners. Hyde noted high gasoline prices hit Columbia County harder than many communities because a large portion of the population commutes to work.

'That's affecting us in a big way' by lowering disposable income, which, in turn, hurts local retail businesses, he said.

On the plus side, Hyde said Columbia County is blessed with some of the best natural gas fields in the Pacific Northwest. It is also home to one of the country's newest ethanol plants, Cascade Grain, in Port Westward.

Dodson dismissed concerns about the safety of LNG terminals, saying Japan has been using liquefied natural gas for 40 years without a significant accident.

'You can go on the (Internet) and see all these horrific stories about LNG,' he said, adding, 'We don't really see LNG as a safety issue or an environmental issue.'