On Tuesday the project backer sent out a press release that said is was "suspending" the development of a $650 million liquefied natural gas terminal at Bradwood Landing on the banks of the Columbia River upstream from Astoria, Ore.

Later in the day, the company behind the project, NorthernStar Natural Gas, Inc., and its subsidiary, Bradwood Landing filed for Chapter 7 total liquidation bankruptcy in U.S. District Court for the Southern District of Texas. NorthernStar headquarters is in Houston.

The companies' estimated assets are less than $300,000 while their estimated debt is in excess of $21 million, according to information filed with the court.

The press release blamed the suspension on a burdensome state and federal permitting process.

"The extended delays in the processing of state and federal permits for Bradwood Landing and the difficult investment environment have forced us to suspend development," NorthernStar President Paul Soanes said in the press release. "In particular, the challenging regulatory environment gives investors pause…."

As recently as April 22 NorthernStar filed an appeal with the Oregon Court of Appeals of an April 12 decision by the state's Land Use Board of Appeals. That decision remanded two issues related to Bradwood Landing's consolidated land use approval back to Clatsop County for further work.

On March 20, 2008, the Clatsop County Board of Commissioners approved Bradwood’s consolidated land use application. Project opponents appealed that approval to LUBA.

The company said the shipping terminal and its associated 36.3-mile pipleine would have provided 450 jobs during three years of construction and 65 permanent jobs. It claimed suport from the Oregon AFL-CIO, The Columbia Pacific Building Trades Council, the Washington State Building and Construction Trades Council, the Oregon Machinists Council, the Washington Machinists Council, Carpenters Local 1707, the International Longshore Workers Union and the Steamship Operators Union.

But many, including the states of Oregona and Washington, treaty tribes, conservation and fishing groups and others feared the potential impacts on the environment, and on species such as salmon that rely on the estuary. All wanted a more thorough look at construction and operational consequences.

Some, such as the Columbia Inter-Tribal Fish Commission's member tribes – the Nez Perce, Umatilla, Warm Springs and Yakama – saw no place at all for the LNG terminal.

"The Commission challenged this project because its risks to the tribes’ fishery resources substantially outweigh the perceived benefits, if any, of the project," said Paul Lumley, CRITFC executive director. "Our tribal peoples have occupied the Columbia Basin since time immemorial and are already saddled with the burdens of many unwise development decisions. A large-scale industrial facility such as this, built in complex essential fish habitat such as Bradwood, runs counter to salmon protection and recovery progress that tribes and others have worked hard to achieve.

"The science clearly demonstrated that this project, if fully developed, would have destroyed essential wetland habitat, killed fish and drastically changed the character of the Clifton Channel area from a productive natural aquatic ecosystem to an industrial zone," Lumley said. "NorthernStar’s decision to surrender its development of the Bradwood LNG project bodes well for future estuary habitat protection."

The proposal faced opposition from farm, fishing, forest, and environmental groups as well.

"LNG has no place in Oregon," Brett VandenHeuvel, executive director of Columbia Riverkeeper. "This is a tremendous victory for family farmers, fisherman, and Columbia River salmon. This is proof that Oregonians will fight to protect our resources and our livelihoods.”

George Exum, a resident of Puget Island, Wash., who lives within a mile of the suspended Bradwood project, lauded the hard work and cooperation of Oregon and Washington residents in opposing the project.

“All the efforts of citizens in Washington and Oregon who saw the economic and environmental harm threatened by Bradwood Landing LNG have paid off. This is a great victory for the Columbia River and the communities who rely on it for their livelihood,” Exum said.

Initial work began on the project six years ago. NorthernStar Natural Gas proposed to build a technologically advanced LNG receiving terminal at Bradwood Landing on 55 acres of a 420-acre site located at about river mile 38 between Astoria and Clatskanie on the Columbia River. The facility would be designed to have a peak sendout capacity of 1.3 billion cubic feet per day of natural gas.

The Federal Energy Regulatory Commission in September 2008 issued authority under the Natural Gas Act to Bradwood Landing, LLC and NorthernStar Energy, LLC, to construct the so-called Bradwood Landing LNG terminal and associated pipeline facilities. FERC's approval that the company satisfy some 109 "conditions" for approval, including the winning of various federal and state permits before launching construction. It required that the whole process, including construction, be completed within three years.

The states of Oregon and Washington, the Nez Perce Tribe and Columbia Riverkeeper early in 2009 filed petitions with the U.S. Court of Appeals for the Ninth Circuit asking the court to order FERC to reconsider its decision to license the proposed Bradwood Landing LNG project, as well as its Jan. 15, 2009, denial of requests for a rehearing on the earlier decision.

The litigants are now amidst legal arguments in the Ninth Circuit.

In denying the rehearing requests FERC said its decision "does not impact any substantive determinations that need to be made by the states" under federal statutes. Since construction cannot start until all necessary authorizations are obtained, there can be no environmental impacts until there is full compliance with all relevant federal laws."

In a brief filed Tuesday in the Ninth Circuit, elaborated on that argument.

The Bradwood Project may never go forward because the authorization granted in the Conditional Orders is conditioned upon action by Oregon, Washington, and the Services under the applicable federal statues," according to the brief filed for FERC. "Neither the states nor the Services have taken final action on the matters before them. And it is apparent that each has reservations about the Project. It is thus far from certain that this controversy will ever require a judicial review."

The Natural Gas Act requires that FERC recognize other state and federal authorities but "this provision does not affect the agency's power to conditionally approve LNG applications, subject to later compliance with those statues," the FERC brief says.

Scott Jerger, an attorney representing Riverkeeper, said he was proceeding as if the suspension announcement and bankruptcy filing had not taken place. The organizations want the FERC decisions reversed.

Jerger said the FERC conditional approval "exists and is transferable, I believe." That means potentially other parties could try to move forward with the project.

The Ninth Circuit briefing schedule calls for the respondent-intervenors, in this case NorthernStar, to file briefs by May 18. Then the two states and Riverkeeper would have 42 days to file a response to the FERC brief filed this week and to anything that might be filed by NorthernStar, if anything is filed.

The "Services" are the U.S. Fish and Wildlife Service and NOAA's Fisheries Service. FERC is required to complete Endangered Species Act consultation with the two agencies to assure that the project will not jeopardize protected species. There are l3 listed salmon and steelhead stocks that swim through the estuary on their way to and from the Pacific Ocean.

Both of those processes are now in mid-stream. NOAA Fisheries' Janet Sears said Thursday that FERC "has not indicated that they want to terminate" the ESA consultation process.