Groups raise new challenge to Tesoro-Savage oil project

Lawyer says 1977 federal law prohibits issuing of permit

By Aaron Corvin, Columbian Port & Economy Reporter

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Environmental groups are leveling a new challenge against a proposal to build the Northwest’s largest oil-by-rail transfer terminal at the Port of Vancouver, arguing that a 1977 federal law prohibits the U.S. Army Corps of Engineers from issuing a permit for the proposal’s dock reconstruction project.

In a March 11 letter to the Corps, Kristen Boyles, an attorney for Earthjustice who is representing several other environmental groups, argues the law — known as the Magnuson amendment — forbids the federal agency from issuing the permit requested by Tesoro Corp. and Savage Companies.

The amendment, in part, bans the federal government from granting permits to build or modify a terminal or dock in Puget Sound — or any other of the state’s navigable waters east of Port Angeles — to increase the amount of oil such facilities could handle.

Citing the amendment’s language in her letter, Boyles argues, in part, that the “Columbia River at the Port of Vancouver is a ‘navigable water in the state of Washington east of Port Angeles.'”

“In short,” she wrote, “the Corps has no authority to issue the requested permit, and we ask you to deny the permit application.”

Patricia Graesser, a Corps spokeswoman, said Tuesday that the agency only recently received the letter and that its attorneys are reviewing it. She declined to comment further about it.

In an emailed statement to The Columbian on Tuesday, Kelly Flint, senior vice president and general counsel for Savage, said: “The Magnuson amendment itself, and its legislative history, are very clear that the amendment applies only to Puget Sound and adjacent navigable waters. It does not apply to the Port of Vancouver USA or the proposed Tesoro Savage Energy Distribution Terminal.”

In a phone interview, Boyles said if the Corps decides to issue the permit, she believes the agency “will be issuing it illegally.” Given the legal issue, and the high risk and public concerns surrounding the Tesoro-Savage proposal, Boyles said, “we would definitely consider” a lawsuit if the Corps gives an OK to the permit.

The fresh challenge by environmental groups marks the latest twist in the ongoing public controversy over the proposal by Tesoro and Savage to build a $110 million oil-by-rail terminal at the port. The facility would handle as much as 380,000 barrels of crude per day — shipped by train from North Dakota’s Bakken shale formation — for eventual conversion into transportation fuel.

The companies submitted their permit application Aug. 29. An environmental impact review by the state Energy Facility Site Evaluation Council is expected to take more than a year. The EFSEC will make a recommendation to Washington Gov. Jay Inslee, who may accept it, reject it or send it back to the council for more work.

‘Full import’

But EFSEC isn’t the only route Tesoro-Savage must take to win approval to build its project. The companies also need a federal permit from the Corps to reconstruct berths 13 and 14 at the port for the movement of crude to marine vessels.

The Corps received the companies’ permit application in February, according to Graesser. In an email to The Columbian, Graesser said that “based on the work described in the application, the actions planned within our jurisdiction look to be permitted” under rules covering maintenance, utility and other work.

Graesser said the companies’ application must meet other legal requirements, including tribal notification and coordination with certain agencies and the state about potential impacts to cultural resources. “We have initiated tribal notification and will soon begin the other coordination required,” Graesser said. “The timeline to reach a permit decision is dependent on meeting these requirements first.”

But Boyles, the Earthjustice attorney representing Columbia Riverkeeper, ForestEthics, Spokane Riverkeeper, Sierra Club, Washington Environmental Council and Climate Solutions, argues the Magnuson amendment prevents the Corps from issuing any permit for the project.

She outlines several points to back her argument, including citing previous court decisions and the longitudes of Port Angeles and the Tesoro-Savage project, and argues that the Columbia River at the Port of Vancouver is covered by the Magnuson amendment.

The amendment also is applicable, Boyles argues, because of the nature of the dock work the companies propose and because of the significant amount of oil they want to handle.

“As no crude oil is currently shipped from the site, there is no question that the proposed dock work ‘will or may result’ in an ‘increase in the volume of crude oil capable of being handled’ at the Tesoro-Savage proposed project,” according to Boyles.

The Magnuson amendment does not apply to projects that would increase the capacity to handle oil for refinement and consumption in Washington state. But Boyles, noting that Tesoro-Savage wants to deliver oil to refineries on the West Coast, argues the companies don’t qualify for that exemption. By the companies’ “own admissions,” Boyles argues, “this oil terminal will handle crude oil beyond that which will be refined in Washington for Washington consumption only.”

Boyles also wrote of the Magnuson amendment: “Perhaps because of its enactment history and initial focus on Puget Sound, Tesoro-Savage has ignored its full import: under the plain language of the statute, not only Puget Sound waters but ‘any other navigable waters in the state of Washington east of Port Angeles’ are explicitly covered by the same prohibitions on federal licenses, permits, or approvals.”

‘Stealth move’

The 1977 amendment was the brainchild of Democratic Sen. Warren Magnuson, who sponsored many landmark marine environment bills, including the Marine Mammal Protection Act, according to HistoryLink.org, an online encyclopedia of Washington state history.

Congress passed the amendment, which effectively banned “oil supertankers from Puget Sound,” according to HistoryLink. The “stealth move through Congress,” according to HistoryLink, quickly settled an “ongoing controversy over a proposed oil superport and pipeline at Cherry Point in Whatcom County.”

Under that oil-handling proposal, HistoryLink says, Cherry Point would have become “an oil port hub where supertankers from Alaska would unload oil into a pipeline that would transport the oil across the state and to the Midwest.”

In addition to her legal arguments, Boyles notes Magnuson discussed his amendment in broader terms when he introduced the legislation some 37 years ago. Magnuson, she wrote, said his amendment ” ‘would preclude any major new facility, or significant enlargement of any existing facility, on navigable waters east of Port Angeles, and in particular on Puget Sound.’ “

Boyles argues that “there was no need for the ‘in particular’ explanation if only Puget Sound itself were covered by the statute’s commands.”