Inslee seeks funding to study, prepare for oil-transportation risks

Developing expertise is in agencies' power; a moratorium isn't

By Aaron Corvin, Columbian port & economy reporter

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Washington Gov. Jay Inslee won't say anything about the proposal to build the Northwest's largest oil-by-rail transfer terminal in Vancouver until the state permitting agency reviewing the project makes its recommendation.

But that's not to say the governor isn't sounding off in other ways.

Through a $652,000 budget request and ramped-up discussions among agencies, Inslee is seeking a better response to risks associated with the recent increase in the movement of crude through communities.

The state Department of Ecology "lacks adequate prevention and preparedness planning along the inland rail corridors, as well as expertise in risks related to increased vessel traffic resulting from crude oil export activities," according to Inslee's budget proposal.

State lawmakers are expected to wrap up this year's legislative session Thursday. Although budget negotiations are still underway, Jaime Smith, a spokeswoman for the governor, said Friday that Inslee's $652,000 proposal to tackle risks associated with moving oil by rail and wateris on track for approval.

However, critics of new oil transportation infrastructure in Washington are pressing the governor to go further. Thirteen environmental groups — including a Southwest Washington representative of the Sierra Club — asked him in December to issue a temporary ban on new permits for such projects until Ecology conducts a comprehensive, or "programmatic," assessment of the risks.

Maia Bellon, the director of Ecology, told the groups that Ecology "does not have explicit statutory authority" to impose a moratorium and state agencies have "limited authority to regulate rail" And a comprehensive environmental impact statement "would not

make sense," she wrote in her Jan. 30 response to the groups, "because multiple lead agencies have already completed, or are involved in carrying out, separate environmental reviews for the various proposals."

Bart Mihailovich, director of Spokane Riverkeeper — one of the environmental groups urging a state moratorium — said Friday that the state has, over the years, strengthened its ability to handle marine and pipeline oil hazards. But he said Ecology has told him that the state is behind in its ability to handle oil-by-rail accidents.

Mihailovich said Inslee's budget proposal is an important step in addressing gaps. As to a moratorium, he said, "We still want to see that happen."

'A lot of questions'

Dale Jensen, manager of Ecology's spill prevention, preparedness and response program, said Friday the proposed $652,000 would pay for five new positions in the department.

Three of those employees would assess risk points and develop geographic response plans along rivers, streams and railroads to minimize environmental impacts. One would help the state address the risks associated with the increase in oil-bearing vessels on the region's waterways. The fifth would have technical expertise in rail, with a focus on hazard prevention.

The state's experts on oil have traditionally focused on refineries, pipelines and marine traffic, Jensen said. "From a technical standpoint," he added, Inslee's budget proposal represents "our first step in developing" the same expertise for rail facilities.

Historically, Jensen said, Ecology has responded to oil spills from trains. "Now we're looking at what can we do to advance our prevention capability," he said. Ecology submitted the budget request to Inslee last summer, and the governor asked Ecology to discuss oil transportation with a broader range of agencies as officials "work towards being able to identify what the gaps are."

More than a year ago, he said, Ecology initiated discussions after Tesoro Corp. launched an oil-by-rail operation at its refinery in Anacortes and more oil transportation facilities were being proposed. Those discussions included officials from Washington, Oregon and Idaho, the U.S. Coast Guard and the U.S. Environmental Protection Agency. And it wasn't entirely clear which agencies — state or federal — had regulatory authority over certain oil transportation matters.

"There's a lot of questions to be answered, a lot of information to learn," Jensen said, but Inslee "recognized we needed … a multiyear strategy to grow our capability and understanding."

Jensen said the governor and state lawmakers are pushing to increase oil-by-rail safety in Washington, even as the state learns what it can and cannot do under interstate commerce law and the Federal Railroad Administration's authority to oversee railroads. They are interested in "encouraging changes at the federal level," Jensen said.

Oregon Gov. John Kitzhaber recently ordered a comprehensive assessment of that state's rail safety and oil spill response programs. He's told state agencies to pinpoint gaps in the regulation of trains hauling hazardous material, including oil.

"With the change in the market and the increase in oil trains, it just makes sense to step back and ask, what should we be doing, and what resources do we need, to make sure we have a safe and reliable freight rail network in Oregon?" Rachel Wray, a spokeswoman for Kitzhaber, said in an email to The Columbian.

The information gathered for Kitzhaber to review will be more than a report, she said. "We're trying to identify on-the-ground actions we can take and improve communications between the various entities overseeing health, safety, and transportation in the state."

Smith, the Inslee spokeswoman, said the governor's budget request likewise outlines his "desire to take a much more aggressive stance on identifying strategies for both responding to and preventing oil spills."

After this legislative session wraps up, Jensen said, Inslee will receive a briefing on state agencies' progress in assessing oil transportation.

Terminal proposal

Inslee's efforts are underway even as a proposal to build the Northwest's largest oil transfer terminal at the Port of Vancouver seems bound for the governor's decision.

Tesoro Corp. and Savage Companies want to build a $110 million oil terminal at the port that would handle as much as 380,000 barrels of crude per day for eventual conversion into transportation fuel. They submitted their permit application Aug. 29. An environmental impact review by the state Energy Facility Site Evaluation Council is expected to take longer than a year. The EFSEC will make a recommendation to Inslee, who may accept it, reject it or send it back to the council for more work.

Such proposals were the impetus for the Dec. 9 request of the 13 groups for a moratorium on state permits. "We simply aren't ready for spills by rail, per Ecology's own account," according to their letter. "Much of the rail route parallels waterways like the Spokane River, Columbia River, Chehalis River, Grays Harbor Estuary, and Puget Sound."

The letter cites concerns about impacts to communities from increased oil- and coal-train traffic, and it points to recent oil-transportation calamities: "The train derailment and explosions in Lac-Megantic, Quebec this summer, the pipeline breach along the Kalamazoo River in 2010, and the grounding of the Exxon-Valdez tanker in 1989 are reminders that accidents happen and have devastating consequences."

In her response, Director Bellon of Ecology described a shifting energy picture, in which the state is "experiencing a reduction in crude oil moved by tank ship from Alaska, and an increase in oil moved by rail from North Dakota."

"As the risk of oil spills is expanding to our inland areas along rail routes," she wrote, "we need to increase our level of readiness accordingly." That's why, she added, the governor has proposed $652,000 "to reduce oil spill risk from rail and vessels."

Ecology also is seeking legislative action, she said, to "ensure state oil pollution laws cover all petroleum products handled in Washington," including diluted bitumen oil — a type of crude derived from Canadian oil sands.

"If a spill does occur, we are prepared to launch a rapid, aggressive and coordinated response — whether it is in Spokane Valley, Pasco, Washougal, Tacoma, Anacortes or the San Juan Island," she wrote. "Our actions will not be delayed by questions surrounding whose oil has been spilled, which private party is responsible or how response equipment and trained personnel will be deployed."