Vancouver Energy oil terminal could hinge on Wolfe’s vote

By Brooks Johnson, Columbian Business Reporter

Published:

 

If you go

• What: Oil terminal lease amendment public hearing.

When: Tuesday, 9:30 a.m. to 9 p.m. Doors open at 8 a.m.

Where: Gaiser Hall at Clark College, 1933 Fort Vancouver Way, Vancouver.

Those who want to comment on the proposed Vancouver Energy lease amendment before the Port of Vancouver’s three commissioners can do so Tuesday following the port’s regular business. Speakers will be chosen by lottery, and those wishing to speak must have a lottery ticket by 7 p.m. Parking will be limited, and carpooling or alternative transportation is encouraged. The port will provide ground rules to “maintain a secure, respectful and civil atmosphere that allows all voices to be heard.”

Port Commission decision: At 1 p.m. April 15, the commissioners will make a decision on the lease amendment. No comment will be taken that day.

On the Web: The full proposed lease amendment can be found at http://bit.ly/1SBp7kZ

With the Port of Vancouver’s staff recommending against a proposed lease change for Vancouver Energy’s rail-to-marine oil terminal — and no guarantee on how the port’s three commissioners might vote on it — the threat of derailment for what would be the nation’s largest oil terminal is suddenly very real.

Much is at stake as the project comes up on its third anniversary while it continues to slog through the state permitting process that could result in the project’s eventual rejection anyway. Whatever the outcome, the Port of Vancouver and Vancouver Energy stand to make — or lose — millions of dollars.

“There’s a cost to both Vancouver Energy and the Port of Vancouver to go forward. And we’ve already spent a ton of money, both entities have,” port Commissioner Brian Wolfe said Thursday. “Do you want to roll those dice? That’s part of the consideration.”

With an environmental impact statement still getting finalized and the Energy Facility Site Evaluation Council holding adjudication hearings in June and July, a decision by Gov. Jay Inslee on the project may not happen until late this year or sometime in 2017.

With that in mind, Vancouver Energy is asking for a two-year extension to its permitting deadline and other cost-saving changes to its lease before Aug. 1. Documents obtained by The Columbian through a public records request reveal that discussions between the port and Vancouver Energy on a lease amendment have been underway since at least February.

Wolfe, who has become the three-member commission’s swing vote on the oil terminal lease changes, said he won’t make up his mind on his vote until after Tuesday’s daylong public hearing at Clark College’s Gaiser Hall. The commission expects to vote on the request on April 15.

“My position today is I’m still going to listen to everybody next week and try to do at the end of the week what’s best for the Port of Vancouver,” said Wolfe, who backed the initial lease agreement.

Eric LaBrant was not a member when the commission unanimously approved the original lease in 2013. But he won his seat on an anti-terminal platform, easily beating a staunch terminal supporter. Commissioner Jerry Oliver remains a supporter of the terminal.

“I think this is a reasonable project,” Oliver said. “This is good for the port, good for Vancouver, good for the men and women who work here and good for the nation.”

The terminal, which would be the nation’s largest, has been promoted as a way to increase U.S. energy independence but derided for its potential safety and environmental risks. The project would handle 360,000 barrels of oil per day from trains to ships bound for West Coast ports — although the lifting of the federal crude oil export ban could change the oil’s destination.

Among other changes, Vancouver Energy is offering $100,000 a month instead of the $50,000 it currently pays during this “contingency period.” When the project is operating, Vancouver Energy would l pay a minimum $13,200 per day under the current contract.

Port CEO Todd Coleman said in a statement Thursday that despite opposing the amendment, the port is still in favor of the terminal.

“We’ve heard from stakeholders on all sides, and we remain supportive of the Vancouver Energy project,” Coleman said. “Staff’s job is to make recommendations based on the port’s needs, and we have concerns right now about the ability to move forward with this project in a manner that is consistent with those needs.”

The commissioners are set to vote on the lease amendment April 15 at 1 p.m. after digesting what is shaping up to be a massive serving of public comments.

The August date for ramping up lease costs was based on an expectation that the project would have cleared all regulatory hurdles by that time. In a statement, Vancouver Energy said the permitting process “was never anticipated to take this long.”

“We believe the port commission should allow the (permitting) process to conclude and Gov. Inslee to make a decision as was the intent when the Port of Vancouver originally invited us to propose a project,” Vancouver Energy spokeswoman Tina Barbee said Thursday. “We have been partners throughout this review and all parties have invested substantial effort in the permitting process and share an interest in its completion.”

When asked, Barbee did not say whether litigation or withdrawing the project was on the table should the amendment fail to pass.

“We still have an active lease with the port regardless of the amendment discussion next week,” she said.

Opponents of the Tesoro Corp. and Savage Cos. joint venture want commissioners to cancel the lease entirely, which is possible without penalty now that it is clear the project won’t have full approval by Aug. 1 or start construction by the end of the year.

“The staff’s recommendation is a smart move,” said Brett VandenHeuvel, executive director of Columbia Riverkeeper. “The port shouldn’t give them more time. The port was wise to include a lease termination clause if Tesoro didn’t make progress. Tesoro hasn’t made progress and the port can and should terminate the lease.”

VandenHeuvel went on to say that because of delays stemming from a rocky start to the permitting process — including a rewrite of the environmental impact statement — the companies “brought this upon themselves.”

Wolfe said rejecting the proposed lease changes doesn’t take other options off the table.

“It leaves other options open,” he said. “(Staff) doesn’t think this extension as proposed, the amendment to the lease, is a good idea for the Port of Vancouver.”

Port spokeswoman Abbi Russell, however, said the port is not preparing its own lease amendment at the moment.

But does it mean the end of the lease itself is nigh?

“It’s not likely that next week’s discussion will include any termination language,” Wolfe said. “If we don’t do anything, on Aug. 1 the lease goes hard and they get to start paying lots of money.”

In a 2014 budget document obtained through a records request, the port had anticipated getting $6.7 million from Vancouver Energy this year.

But in the port’s 2016 budget approved last fall, virtually none of that money is expected. The port’s finance director, Scott Goodrich, said only the $330,000 from the Vancouver Energy’s monthly payments is included. Those end in July under the current lease.

“No additional revenue related to the Vancouver Energy project was built into the 2016 budget,” he said.