State Supreme Court sides with Port of Vancouver in oil terminal suit

By Dameon Pesanti, Columbian staff writer

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The Port of Vancouver didn’t violate state environmental laws when it leased property for what could be the nation’s largest oil terminal in 2013, the Washington Supreme Court ruled in a 5-4 decision filed Thursday.

The ruling is a blow to the opponents of the project. Barring either the port or Vancouver Energy backing out of the agreement, the decision puts the fate of the project squarely in the hands of the Energy Facility Site Evaluation Council and Gov. Jay Inslee.

“We appreciate the court’s ruling. It’s a really important case, not only for the port of Vancouver, but ports in general,” said Port of Vancouver spokeswoman Abbi Russell. “We look forward to continuing the process with Vancouver Energy.”

Currently the project is under evaluation by the site evaluation council. In the coming months, that body is expected to make a recommendation to Inslee, who will decide if the project is built.

The proposed oil terminal, at full production, would be capable of transferring 360,000 barrels of oil per day from Midwestern freight trains into vessels bound for refineries along the West Coast.

Environmental groups Columbia Riverkeeper and the Northwest Environmental Defense Center brought the case, arguing the port commissioners violated the State Environmental Policy Act by limiting the port’s “reasonable alternatives” when it leased land to Savage Cos. and Tesoro Corp. before the site evaluation council could issue its environmental impact statement.

The State Environmental Policy Act identifies and analyzes environmental impacts of private projects, public facilities, or regulations or plans.

State law defines reasonable alternatives as actions that could “feasibly attain or approximate a proposal’s objectives, but at a lower environmental cost or decreased level of environmental degradation.”

The five justices argued that the State Environmental Policy Act and the Energy Facility Site Location Act have overlapping authority.

“(The two laws) reflect the legislature’s desire to carefully balance developmental and environmental concerns,” wrote majority opinion author, Chief Justice Mary Fairhurst.

The majority also reversed a state Court of Appeals ruling that found that ambiguities in environmental laws concerning large energy projects could be interpreted as not applying to the port. The majority determined that the laws clearly do apply to the port, and that the port was acting within its authority when it signed a lease with Tesoro and Savage.

“The legislature empowered the port to determine whether, and under what terms, to lease public property under its control,” Fairhurst wrote.

Adding that while the site evaluation council and the governor “unquestionably have broad authority over the energy facility siting process … the port alone has plenary authority to determine whether to lease public property under its control.” 

The court’s majority also said the conditions and authorities in the lease, combined with the governor’s ultimate authority over the project’s future, preserve enough “reasonable alternatives” for the port to make changes to the lease, echoing the Clark County Superior Court’s stance.

“The lease language plainly preserves the port’s ability to shape the final project in response to environmental review, for example by adopting additional mitigation measures, heightened insurance requirements, or modifying project specifications,” Fairhurst wrote. “This preserves reasonable alternatives.”

Eric Johnson, executive director of the Washington Public Ports Association, said the court’s decision benefits not just the Port of Vancouver, but ports across the state.

“Traditionally, environmental review is done after you implement a lease, and it’s been done that way for decades,” he said. “There will continue to be strong environmental review … but the review will be done after you implement a lease.”

Dissent

The four dissenting judges agreed with the majority that State Environmental Policy Act applies to the port, and that it was acting within its jurisdiction when it approved the lease, and that the State Environmental Policy Act and the Energy Facility Site Location Act don’t conflict — but the opinion takes a sharp turn from there.

“Having acknowledged these truths, however, the majority’s conclusion that the Port did not violate (the Environmental Policy Act) is untenable,” wrote Justice Debra Stephens. “(The law) mandates that governmental agencies be informed of the likely environmental consequences of their decisions before making them.”

The minority argued that, by entering the lease for the oil terminal, the port restricted changes that can be made to the project. Adding that if the port waited to sign the lease until after the environmental impact statement was finished, it could have potentially negotiated a better lease.

Miles Johnson, an attorney with Columbia Riverkeeper, said the organization is now focused on the evaluation council and the governor.

“They’ve heard from Vancouver and local communities throughout the Gorge and treaty tribes and the Washington attorney general — all recommending against this project,” he said.