Company eyeing crude terminal at Grays Harbor quits lease

It may consider different type of commodities facility at port

By Dameon Pesanti, Columbian staff writer

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A company planning to build a crude-by-rail shipping terminal in Grays Harbor County has quietly stepped away from a leasing option.

Grays Harbor Rail Terminal, which is owned by U.S. Development Group, originally had an option-to-lease agreement with the Port of Grays Harbor that expired on March 28. But rather than renew, the company quietly terminated the agreement in November.

In a short letter dated Nov. 11, 2015 and headlined “strictly private and confidential,” Grays Harbor Rail Terminal Vice President Kevin LaBorne terminated the lease at the start of that month.

The company was paying $21,000 per month for the lease option.

“I’m not entirely clear why they wanted to keep it under the radar, frankly,” said Kristen Boyles, a lawyer for the environmental organization Earthjustice and the counsel representing the Quinault Indian Nation. “It’s a good sign for Grays Harbor to defeat all of these.”

U.S. Development Group wants to build an $80 million shipping terminal capable of handling 45,000 barrels per day of various bulk liquid materials, specifically various types of crude oil. On-site storage tanks would hold between 800,000 and 1 million barrels. The terminal would handle three to five ships per month.

However, the company signed a commercial access agreement with the Port of Grays Harbor to study the development of a different type of commodities facility, but not crude oil.

Tyson Johnston, vice president of the Quinault Nation, was pleased with the canceled lease agreement option, but noted that the company’s permit with the Washington Department of Ecology is still active.

“They, as a company, said they’re not going to pursue it. We’re cautiously optimistic,” he said.

One proposal remains

The company submitted permit applications to the city of Hoquiam in June 2014. The city banned crude oil storage facilities in September 2015.

At one point, three companies were considering building shipping terminals in Grays Harbor; only one remains.

In November, Renewable Energy Group abandoned plans to build a crude-by-rail terminal capable of handling 78,000 barrels of oil per day.

Westway Group and Renewable Energy Group were being reviewed at the same time in a joint draft Environmental Impact Statement.

Westway hasn’t announced changes to its terminal expansion plans. Ecology is expected to announce a decision on its permit this spring.

The projects were met with fierce public opposition from environmental groups and tribal governments, with more than 100,000 comments filed during the environmental review process for the terminals.

The largest crude oil shipping terminal proposed in the region is the Vancouver Energy project at the Port of Vancouver. If built, it would be the largest in the nation. State regulators are in the process of reviewing the application.

Dameon Pesanti: 360-735-4541; dameon.pesanti@columbian.com; twitter.com/dameonoemad