2nd thoughts on 3 oil terminals

Grays Harbor County projects that were easily embraced last year are now challenged

By Aaron Corvin, Columbian Port & Economy Reporter

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The town of Westport, dotting a windswept peninsula that juts into Grays Harbor, shows off panoramic views and offers tourists an affable collection of restaurants and stores festooned with American flags.

Make no mistake, though, it’s a flinty workplace where many jobs remain tied to natural resources in the harbor itself. The town’s expansive marina furnishes a sizable commercial fishing fleet, an industry that rewards those who can roll with nature’s ebb and flow.

“You don’t always see the treasure,” said Larry Thevik, who at age 66 has plied these waters for 44 years in pursuit of albacore, salmon, halibut and, nowadays, Dungeness crab. “Sometimes you see the hardship.”

It’s difficult enough for Thevik and other fishermen to deal with commercial fishing’s good and bad seasons, and the uncertainties that haunt their marketplace. But another industry that sees Grays Harbor as a gateway to the world wants to muscle into the area in a big way. Three companies are proposing to build or expand terminal operations that would bring in crude oil by rail from the Midwest and transfer it to ships for transport to refineries and, ultimately, consumers.

The nation’s extraction of oil, the sudden growth of the commodity’s movement by rail and a corporate play to enlarge the West Coast’s role in moving and refining crude has plunged Gray’s Harbor, Vancouver, and other Northwest communities into an indelible struggle over how they’ll define themselves economically, environmentally, politically.

In Washington and Oregon, at least 10 refineries and port terminals are planning, building or already operating infrastructure to support oil-by-rail cargoes. It’s highly likely that most oil trains headed from North Dakota’s Bakken oil fields to Grays Harbor County would travel through the Columbia Gorge and Clark County.

Backers of more oil infrastructure say the industry can co-exist with others. Thevik disagrees. He sees risks piling up. He fears the specter of unprecedented amounts of toxic crude ruining a fishing industry, worth tens of millions of dollars annually, that depends on a sustainable ecology.

In opposing the oil industry’s expansion in his community, Thevik joins with a growing number of people along rail lines stretching from the North Dakota oil fields to the Pacific Ocean in challenging a critical cog in the industry’s wheel: getting its product to market.

On a recent morning, Thevik, ensconced inside his 42-foot boat, “Midnight Star,” moored at Westport’s Float 8, considered the implications. “Is this a good use of the estuary?” he said. “Is this a good way to use the gift that is Grays Harbor?”

With promises of economic development in tow, Westway Group LLC, Imperium Renewables and U.S. Development Group LLC want to build three oil-by-rail terminals that would all together bring more than 175,000 barrels of crude oil per day into the region. That’s close to half the daily capacity of the oil transfer terminal proposed by Tesoro Corp. and Savage Companies at the Port of Vancouver.

Westway, based in New Orleans, now operates a methanol storage facility at the Port of Grays Harbor’s Terminal 1. Five new storage tanks for crude oil have a total storage capacity of 1 million barrels. The expanded facility would handle 1.25 trains per day and about one barge every two days.

Seattle-based Imperium seeks to enlarge its biodiesel fuel operation — just west of Westway’s terminal — to receive, store and ship oil and other liquid bulk materials. Up to nine new storage tanks would provide a total storage capacity of up to 720,000 barrels. The terminal would handle two unit trains and one vessel per day.

U.S. Development, headquartered in Houston, wants to construct a rail-and-marine transfer operation handling an average of 45,000 barrels per day of various liquid bulk materials, including crude oil. The crude would be stored in up to eight above-ground storage tanks, with a total capacity of about 800,000 to 1 million barrels. The operation, proposed for the port’s Terminal 3, would receive about one train every two days, on average, and up to about five vessels per month.

The oil would feed refineries that have historically received crude arriving on ships from Alaska’s North Slope and are now looking to the Midwest’s oil bonanza, according to Paul Queary, a spokesman for Westway and Imperium. “Production in Alaska is declining,” he said in an email to The Columbian. “Those refineries need the Bakken crude to replace the Alaskan crude, which creates an opportunity for Westway and Imperium.”

‘A huge win’

The Westway and Imperium proposals looked ready to go in early- to mid-2013. The city of Hoquiam, working with the state Department of Ecology, had issued permits after deciding the companies’ plans posed a minimal threat to the environment.

Around the same time, the board of Greater Grays Harbor Inc. — the region’s economic development group — voted unanimously to back all three oil-by-rail terminals. The board said, in part, that regulations were in place to protect Grays Harbor.

“If we felt there was truly a conflict between this industry and tourism, or commercial fishing or shell fishing, we would not have supported crude by rail,” said Mike O’Dell, the board’s then-vice chairman.

But opponents appealed the permit approvals to the state Shorelines Hearings Board. Their challenge capsized the companies’ momentum. By November, the Shorelines board had found that the city and Ecology failed to include the U.S. Development proposal, which was “reasonably foreseeable,” in an analysis of the cumulative impacts of the Westway and Imperium proposals. The board, which also found other flaws in the agencies’ analyses, revoked the companies’ permits.

It was “a huge win,” said Kristen Boyles, an attorney with Earthjustice in Seattle, who represented the Quinault Indian Nation in the case. “Nobody was really paying a whole lot of attention” when the companies first submitted their applications, she said. “There was a lot of focus on coal. All of a sudden, here come the oil trains.”

Westway and Imperium eventually re-submitted their separate projects under a tougher review process that includes extensive public comment and environmental impact statements

In May, as Ecology and the city of Hoquiam gathered public comments on what impacts should be studied in examining the re-submitted Westway and Imperium proposals, the region got a jolt: Eleven grain cars derailed near Montesano, a town of about 4,000 people. It was the third derailment in just two weeks.

All three wrecks happened between Montesano and Aberdeen on tracks managed by Puget Sound & Pacific Railroad, an affiliate of shortline operator Genesee & Wyoming Inc. The incidents prompted concerns from residents and promises from the railroad to make safety improvements. And the accidents led Greater Grays Harbor Inc. to rethink its unanimous support for the three proposals. The business group’s current stance “is in development,” O’Dell, general manager of an auto dealership in Aberdeen who now serves as the group’s board chairman, said in an email to The Columbian. He also said: “We are concerned with the rail safety and regulations at both the local and national level,” noting that recent meetings that included business and elected leaders, and port and railroad officials, produced a commitment for more than $8 million in track improvements over the next two years.

Meanwhile, opponents say they’ll continue to press rail safety and other concerns. And, if needed, they’re prepared to challenge U.S. Development’s proposal in court.

If the city of Hoquiam and Ecology decide the company’s proposal poses a minimal threat to the environment, as they initially did with the Westway and Imperium plans, said Arnie Martin, president of the Grays Harbor Audubon Society, “we will sue.”

Martin, a retired mechanical engineer who cherishes the region’s hundreds of thousands of shorebirds, recently gave a Columbian reporter a tour of the proposed oil transfer station sites.

Wearing a baseball cap and an anti-oil-train T-shirt, Martin parked his 2005 Toyota Prius near U.S. Development’s would-be footprint at the Port of Grays Harbor’s Terminal 3. The site is feet away from the Grays Harbor National Wildlife Refuge — 1,500 acres of intertidal mudflats, salt marsh and uplands that support up to 50 percent of migrating shorebirds.

In U.S. Development’s permit application, which isn’t as far along as the Westway and Imperium proposals, the company says it will build biofiltration swales to clean stormwater before it discharges directly toward the wildlife sanctuary. Additional habitat for fish and wildlife also would be constructed, the company says.

Martin is unimpressed. “I just can’t believe that anybody could put in a crude terminal with a draining pattern that goes into the wildlife refuge,” he said.

Neither can the state’s Department of Fish and Wildlife. The agency recommends against allowing U.S. Development to build its project. Putting an oil-by-rail facility, or any bulk liquid storage and transloading operation, on land “immediately adjacent” to the wildlife refuge “poses an unacceptable risk to this critical habitat,” the agency said in a May 27 document.

Meanwhile, it’s unclear when the separate draft environmental impact statements on the Westway and Imperium proposals will be released. The documents will help guide final permit decisions.

What is clear is that Ecology and the city of Hoquiam have heard from the public — loudly. More than 22,000 comments flooded regulators’ in-boxes. Large and small cities in Clark County weighed in.

The Westway and Imperium proposals will “result in a significant increase in the amount of petroleum products transported through Vancouver by rail,” Vancouver City Manager Eric Holmes wrote. Many of the city’s 26 at-grade crossings “are unsignalized crossings,” according to Holmes.

Ridgefield City Manager Steve Stuart wrote that “our highest priority is to include analysis of environmental and safety risks associated with the increased train traffic carrying petroleum products through Ridgefield and the adjacent Ridgefield National Wildlife Refuge.”

‘Opponent fabrication’

For its part, the Port of Grays Harbor wants commerce to win the day.

Having worked with Westway and Imperium for several years, the port has “absolutely no concerns about their commitment or ability to perform safe handling of hazardous materials,” Gary Nelson, the port’s executive director, wrote to the city of Hoquiam and Ecology.

Nelson also took aim at opponents: “It will be nice to have a study produced that is based on the actual operating plans of the project proponents rather than use of blatant opponent fabrication to project the impacts (of) the proposals.”

Thevik, the longtime fisherman who is vice president of the Westport-based state Dungeness Crab Fishermen’s Association, said Nelson’s comments are offensive to those who raise legitimate concerns about the region’s environment and economy.

State regulators may talk about booming to contain oil spills, Thevik said, but no booms are effective in tidal currents that frequently reach 3.5 knots or stronger. And destructive oil spills are realities, not fabrications, Thevik said. He counted off several: the Nestucca oil barge spill off Grays Harbor in 1988, the Exxon Valdez oil spill in Prince William Sound, Alaska, in 1989, the Cosco Busan oil spill in San Francisco Bay in 2007.

What’s more, habitats within Grays Harbor and its nearshore areas “are particularly sensitive to oil spill impacts, notoriously difficult to clean of oil, and are likely to suffer years of degraded function following a spill event,” according to the state Department of Fish and Wildlife.

As Thevik worries about Grays Harbor, he’s got his eye on Vancouver, too. Thevik said he’s emboldened by the Vancouver City Council’s 5-2 decision to oppose the Tesoro-Savage plan, as well as any proposals that would result in an increase of Bakken crude being hauled through Clark County.

Thevik said he wants Grays Harbor County to have more jobs — just not at the expense of the fourth-largest estuary in the United States. “The risks,” he said, “are much greater than the benefits.”