Oil terminal lease unleashes a gusher of backlash

Port of Vancouver's secretive handling of issue spurs calls for more transparency

By Aaron Corvin, Columbian Port & Economy Reporter

Published:

 

About this series

The Columbian's three-day series is the result of a months-long examination of more than 1,700 public documents; testimony and remarks delivered during public meetings; and interviews with open-government experts, Port of Vancouver officials, and others.

The public documents analyzed include more than 300 pages of depositions taken of port commissioners as part of an ongoing lawsuit that accuses the port of violating the state's open public meetings law in deciding the oil terminal lease.

The initial lawsuit, filed in October 2013, cited information contained in a July 31 story by The Columbian that first revealed apparent breaches by the port of the open public meetings law. For the series, the newspaper obtained other documents through public disclosure requests. Those records include port emails, commission agenda materials and an internal report.

-- Aaron Corvin

A COLUMBIAN SPECIAL INVESTIGATION

Three-part series

SUNDAY: Commissioners defer key decisions to port staff.

MONDAY: Sealing the oil terminal deal behind the scenes.

TODAY: The port faces political fallout.

The Port of Vancouver’s tight lid on the public’s business may be coming off.

Sparked by the port’s insular handling of a lease for what would be the nation’s largest rail-to-marine oil transfer terminal, reform-minded critics are pushing the port to embrace a more transparent approach to making decisions. Some are jumping into the race for an open seat on the port commission, hoping to change the organization from within.

The port’s pursuit of the oil terminal seems like a no-brainer, given that ports nationwide handle a variety of commodities. Yet the proposal by Tesoro Corp., a petroleum refiner, and Savage Companies, a transportation company, jangles more than a few nerves in Clark County and elsewhere. Defective tank cars, oil spills, volatile crude from North Dakota’s Bakken oil fields, a string of explosive oil train accidents – those and other factors have stirred opposition from many quarters, ranging from the city of Vancouver and Washougal’s school district to Native American tribes and a private developer of Vancouver’s waterfront.

Others have stayed away from the fray over the siting of oil terminals. The Port of Portland, no stranger to a variety of cargoes, backed off the oil-by-rail market, announcing last spring that it didn’t have “sufficient answers” to environmental and safety questions. For its part, the Port of Vancouver on April 28 approved a resolution supporting proposed federal legislation to immediately ban the use of unsafe tank cars, among other beefed-up safety steps. The port’s resolution also expressed support for a recently passed state bill that includes an oil spill response tax to cover rail tank cars.

Speaking during the port’s public meeting about the resolution, Commissioner Brian Wolfe said the port has been “concerned about safety right from the beginning.” The port has also spent a lot of time working with federal and state officials about the importance of adopting national oil-by-rail safety standards, Wolfe said.

The Tesoro-Savage partnership, known as Vancouver Energy, argues that the project has strong local support. According to a DHM Research survey released by Vancouver Energy, 69 percent of Clark County voters and 64 percent statewide support the project.

Meanwhile, the oil terminal faces multiple opponents during its review by the Washington state Energy Facility Site Evaluation Council. What’s more, commissioners Wolfe, Nancy Baker and Jerry Oliver, and the port’s administration, led by CEO Todd Coleman, have encountered a rare political challenge from a new group: Taxpayers for a Responsible Public Port.

And, unlike the port’s recent sleepy political seasons, this year’s commission election looks to be a bruiser, with seven challengers competing for the District 2 position held by Baker, who is stepping down after two terms.

Jim Luce, a Vancouver resident and former chairman of the state energy siting panel now examining the oil terminal’s environmental impacts, opposes the oil terminal. The former attorney for the Bonneville Power Administration stepped into the port’s coming political brawl as a leader of the Taxpayers for a Responsible Public Port political action committee.

The group’s goals include: endorse and financially back a candidate for the District 2 seat, scrutinize the port’s budget and move the port toward more transparency.

“If you care about good governance,” Luce said, then you care about what’s happening at the port. You care about its recent actions, he said, including approving a lease for an oil terminal that was “known at the time … to pose a safety risk to our community.”

‘Stay elected’

Since approving the oil terminal contract in 2013, port officials have remained mostly silent during public meetings at which critics have asked questions or urged the port to cancel the lease. At times, port officials have said simply that they expect the state-level review of the oil terminal to address safety and other public concerns.

Internally, however, the port expresses doubts, according to documents obtained by The Columbian through a public records request.

The port recognizes that its “efforts to influence key stakeholders has fallen short,” according to one internal report, dated April 20, 2014, that focuses on the oil terminal. One reason, the report said, is that “the safety issue suddenly became much more important than expected.” While the port would like to take charge of the safety issue, it has “relatively little control over operational safety either for inbound traffic, site operations, or outbound traffic,” the report said. “As such, they may be jeopardizing their reputation by simply claiming the project is safe.”

Still, the port doesn’t express doubt about its own support for the project.

Listed under “Keys” in the internal report: “Approval,” “Build it — TSJV (Tesoro-Savage Joint Venture),” “Get it here on safe Railroads.”

As to the port commission, the report said: “stay strong, continued trust, do more projects, stay elected.”

More recently, Baker, Oliver and Wolfe voted unanimously to approve a resolution spelling out the port’s backing of new federal oil-train safety legislation proposed by U.S. Sen. Maria Cantwell, D-Wash.

The resolution supports Cantwell’s recently proposed Crude-by-Rail Safety Act, including an immediate ban on the use of unsafe tank cars; the requirement that railroads prepare comprehensive oil spill response plans for large accidents and spills; and limits on the volatility of crude.

During the resolution’s public hearing, critics said they supported the resolution but that it was coming after the fact. They said Cantwell’s bill stood little, if any, chance of being passed by Congress. And the port relinquished control over public safety when it rushed into the lease, they said.

Baker defended the port’s process, saying the commission held five public workshops before discussing and approving the oil terminal contract.

“I do listen,” said Oliver, noting the resolution addresses specific concerns raised by the public.

Coleman said the resolution is “not an afterthought” and that the port had been working on stricter regional and national rail safety standards for a long time.

At one point, Coleman turned his attention to the lawsuit alleging that the port violated the state’s open public meetings law in deciding the oil terminal contract.

“I think people will be surprised by the outcome of that at some point,” he said. “I’m not going to go into that,” he added. “Well, I already went too far.”

Earlier backlash

While the current political and legal challenges to the port’s leaders and decision-making practices are unique, one doesn’t have to look very far back in history for warning signs. The 103-year-old port’s recent history pulses with challenges to its inward-looking way of making decisions.

Consider the political backlash of 2007.

That’s when Larry Paulson ran the port’s administration. His bosses at the time: Baker, Wolfe and Commissioner Arch Miller.

It’s also when the port commission approved more than doubling the district’s tax rate. They did so largely to purchase 218 acres of industrial waterfront land owned by Alcoa and Evergreen Aluminum LLC. The idea: redevelop the property, add infrastructure, let the jobs roll in.

In discussions two years before the vote on the Industrial Development District tax, Commissioner Bob Moser issued a kind of prophetic warning. Moser wasn’t seeking re-election. Wolfe would succeed him on the commission. Moser said the port was circumventing the public’s involvement in the tax decision.

“I ran for the commission because I didn’t feel the port was being open enough,” he said in 2005. “This is reminiscent of that.”

Two years later, Baker, Wolfe and Miller unanimously approved the tax levy. A criticism stuck: the port had allowed scant public participation before the vote. A grass-roots effort sprung up, forcing the new levy onto the primary ballot. Voters trounced it, with more than 71 percent saying “no.”

Subsequently, Oliver successfully challenged Miller for the District 3 position. Miller attributed his loss to Oliver to a carry-over from the port’s failed levy.

It was the last time the port would see a contested election.

‘Doing the right thing’

Now, with the stakes much higher, the port faces even greater public scrutiny.

Taxpayers for a Responsible Public Port calls the port commissioners “secretive” and “intolerant” toward the public. The group, which grew out of concerns about the port’s handling of the oil terminal lease, also contends the port is out of bounds with “our long-standing community vision of a vibrant, economically and environmentally sound, clean energy-based community.”

The group isn’t alone in its concerns.

Others are pushing to defeat the oil terminal during its review by the Washington state Energy Facility Site Evaluation Council. Some have formally intervened in the evaluation council’s process. Others have passed resolutions.

The diverse group includes the city of Vancouver, Washougal’s school district, the local dockworkers union, the private developer of Vancouver’s waterfront, and multiple environmental groups and Native American tribes.

There are 66 recognized neighborhood associations in Vancouver. Thirteen, including the Fruit Valley Neighborhood Association bordering the port, have taken formal positions on the proposed oil terminal. All 13 oppose it.

The city of Washougal expresses grave concerns. Spokane, Eastern Washington’s largest city, worries, too.

Washougal’s school district sees the oil terminal as no less than a matter of life or death.

In its resolution opposing the oil terminal, the school district points out the potential for explosive oil train derailments and crude spills: “2,450 of the district’s 3,100 students and 352 of the district’s 419 staff members work daily in schools and offices that are 200 feet to 3,600 feet from the railroads tracks.”

Meanwhile, the Port of Vancouver says safety remains a top priority. And it shows every indication of seeing the oil terminal through.

This month, commissioners defended the process they used to move the oil terminal lease to the finish line and took issue with their critics.

“It’s not objective to suggest that we didn’t try to engage the public,” Oliver said. And while the public engagement “may not have been as successful as we wished,” he said, “once we had our project out there, we were open and above board, and the vote didn’t come until several weeks later.”

Baker said she’s worked hard for the community. The public doesn’t always grasp the local and national benefits of the port’s projects, she said. “Sometimes with the public, it’s very hard, because they don’t understand what’s going on.”

Wolfe said the port did a “pretty reasonable job of outreach” about the proposed oil terminal.

“We thought we told the world, the community that we’re having this project,” he added. “We thought we were doing the right thing.”

The Port of Vancouver Commissioners

Port of Vancouver commissioners serve six-year terms in part-time, nonpartisan positions. Commissioners are paid $635 per month, adjusted for inflation every five years, but larger increases are possible based on the port’s financial performance. Responsibilities include overseeing the port’s CEO, reviewing and deciding leases, budget oversight and strategic planning.

Nancy Baker

• Professional experience: Includes 14 years with port, as a secretarial supervisor and as an executive assistant to the executive director.

• Public office: Elected as District 2 commissioner in 2003; re-elected in 2009; current term expires Dec. 31.

Jerry Oliver

• Professional background: Includes 20 years in medical products distribution industry.

• Public office: Elected as District 3 commissioner in 2007; re-elected in 2013; current term expires Dec. 31, 2019.

Brian Wolfe

• Professional background: more than 40 years as an attorney, including current role as legal counsel for city of Battle Ground

• Public office: elected as District 1 commissioner in 2005; re-elected in 2011; current term expires Dec. 31, 2017.

Baker is not seeking re-election to the District 2 seat. The primary election is Aug. 4. Top two primary candidates face runoff in Nov. 3 general election. Only District 2 voters are allowed to vote in the primary. In the general election runoff, all voters in the entire port district may cast ballots.

Candidates for the District 2 position:

Nick Ande

• Professional background: Managing director of The Couve Group Inc., a marketing firm.

• Campaign website: nickande.com

• Opposes the oil terminal. Says port lacks transparency: “There’s a lack of respect for the public right now.”

Scott Dalesandro

• Professional background: General manager at Columbia River Logistics in Vancouver.

• Campaign website: www.scottforport.com/news.html

• Says oil trains pose danger; would focus on safety, effectiveness, transparency.

Bob Durgan

• Professional background: Retired from Andersen Construction.

• Campaign website: No site as of May 15.

• Says he would have asked more questions before agreeing to lease but that he doesn’t have a position on the project “because I’m going into somebody else’s agreement.”

Peter Harrison

• Professional background: Includes work as systems analyst addressing organizational, work flow needs.

• Campaign website: vote-peter.com

• Opposes the oil terminal, says he’ll emphasize safety, accountability to the public.

Bill Hughes

• Professional background: Former business owner and manager; World War II veteran.

• Campaign website: No site as of May 11.

• Supports the oil terminal. “I’m all for it,” he says. “Jobs come first.”

Eric LaBrant

• Professional background: Includes current employment with a global freight firm in Portland.

• Campaign website: ericforport.com/wp

• Opposes oil terminal, focus is on attracting long-term business opportunities to Vancouver.

Lisa Ross

• Professional background: Includes more than five years working in intermodal chemical transportation industry.

• Campaign website: lisarossfortheport.nationbuilder.com

• Supports oil terminal, says project’s security challenges need thorough review.