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UPDATE: Port oil terminal hits road block

Quebec rail disaster gives commissioners pause about project

By Aaron Corvin, Columbian Port & Economy Reporter
Published: July 8, 2013, 5:00pm

It appears the three-member Port of Vancouver Board of Commissioners isn’t ready, for now, to approve a lease for a proposed crude-oil terminal in light of the derailment and explosion of a train hauling crude oil in a small town in the Canadian province of Quebec.

Commissioner Brian Wolfe said Tuesday the board is “probably” two votes shy of signing off on a lease arrangement with Tesoro Corp. and Savage Companies. “I don’t want to hurry this,” Wolfe said in an interview with The Columbian following the board’s regular public hearing Tuesday. “This is a big deal.”

The companies want to build an oil-handling operation that would receive crude by train from the Bakken shale formation in North Dakota. The facility would handle as much as 380,000 barrels per day — the largest such operation among 11 Washington and Oregon refineries and port terminals that are planning, building or already running oil-by-rail operations.

Port commissioners are slated to review lease terms on July 22. They anticipated voting on the proposed agreement on July 23, but the timing now appears uncertain.

During the commissioners’ hearing Tuesday, environmentalists who oppose the plan by Tesoro and Savage urged commissioners to at least put off a vote and to develop a more comprehensive public safety analysis in the aftermath of the Quebec tragedy.

The July 6 derailment and explosion of an oil train in the Quebec town of Lac-Megantic near the Maine border killed at least 13 people and forced the evacuation of 2,000.

What happened in Quebec “was frightening,” Commissioner Nancy Baker said after Tuesday’s public hearing, and “we’re going to have to take some time to look at this.”

Asked for his reaction, Commissioner Jerry Oliver, the board’s president, said it’s no secret that he’s “generally favorable” to approving a lease. However, he said, “there are clouds, and I want to have as many of them removed as possible.”

It’s a situation that has transformed Vancouver and Southwest Washington into an epicenter of global energy-market gyrations and environmental concerns. Backers of planned oil and coal export ventures trumpet hundreds of new jobs and energy independence tied, in part, to a U.S. oil boom. And they say they’re prepared to adhere to strict environmental rules. Environmentalists tick off a litany of concerns about oil spills, public health and safety, and increased train traffic. And activists plan to launch events in Portland and Vancouver in the weeks ahead to protest fossil-fuel exports, including a talk by Bill McKibben, a pre-eminent leader in the fight against human-induced global warming, at Clark College on July 17.

‘That is a cop out’

Referring to the Quebec disaster, Brett VandenHeuvel, executive director of Hood River, Ore.-based Columbia Riverkeeper, asked commissioners Tuesday whether the port has an emergency response plan for the Tesoro-Savage proposal that “contemplates that kind of disaster.”

If the port doesn’t, he said, then it’s “unfathomable” that commissioners would approve a lease. The companies are proposing to spend up to $100 million on oil-handling facilities. Tesoro and Savage need to secure a lease agreement from the port. The companies also must win approval from the state Energy Facility Site Evaluation Council — a process that could take up to a year or more. The council would make a recommendation to Gov. Jay Inslee, who has the final say.

VandenHeuvel said it’s the commissioners’ responsibility to deal with the public safety implications now rather than taking the “easy answer” of agreeing to a lease and then letting the state Energy Facility Site Evaluation Council further examine the Tesoro-Savage proposal.

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“That is a cop out,” VandenHeuvel said.

He also said commissioners need to be careful about lease terms in light of a successful lawsuit against the Port of Astoria, and its commissioners, over the siting of a liquified natural gas terminal. If Port of Vancouver commissioners end up trying to back out of a lease deal, a similar lawsuit could result, VandenHeuvel said.

Jim Eversaul, a Vancouver resident and retired U.S. Coast Guard chief engineer, also was among several opponents of the Tesoro-Savage proposal who spoke to commissioners Tuesday.

He noted the fallout from the Quebec catastrophe where people were “vaporized” in the explosion and where an oil sheen now stretches more than 60 miles down a river. “I don’t want this to happen in Vancouver,” Eversaul said.

The Port of Vancouver entered into an exclusive negotiating arrangement with Tesoro and Savage on April 18. Later, the parties agreed to an extension. Exclusive negotiations are set to expire on July 31.

Eversaul said it’s “just beyond comprehension” that port commissioners would want to “expedite something like this without (a) proper investigation.”

Under the plan by Tesoro and Savage, crude oil would be shipped to the port by rail from the Bakken site, where oil is extracted by hydraulic fracturing. Eventually, the oil would be transferred from the port to ships bound for refineries in Washington, California and Alaska, where the oil would be processed for domestic purposes, including gasoline for cars and trucks.

In a statement issued Tuesday by BNSF Railway, which stands to haul many of the new oil loads through the most likely route of the Columbia River Gorge, the company said: “Our deepest sympathy and concern is with the victims of the tragic incident in Quebec. While we don’t yet know the specifics, the results of the investigation will help determine what can be done to ensure it does not happen again.”

The company also said: “Railroads remain the safest way to transport hazardous materials, reducing accidents by 91 percent since 1980 due to industry investment and operating practices, and BNSF is continuously assessing and improving its own operations to prevent incidents in the first place.”

Tesoro and Savage officials have said the project will generate an estimated 250 temporary construction jobs and up to 120 full-time workers, most of them hired locally. Representatives of the companies did not speak at the hearing.

During Tuesday’s hearing, Eversaul said the companies’ plan is a “recipe for disaster.” He added, “Is economic development worth that risk?”

‘Toxic fumes’

Environmentalists continue to press port commissioners to reject the Tesoro-Savage proposal, both in public hearings and by way of correspondence. In a July 8 letter to commissioners from Columbia Riverkeeper and the Sierra Club, the organizations list numerous reasons to say no to the project, including “toxic fumes from crude oil handling” and “long, heavy trains” that would “exacerbate traffic delays in communities along rail lines in Washington, such as Washougal, Spokane and Vancouver.”

The groups also blast Tesoro for the company’s “poor record for worker safety and pollution,” including a 2010 explosion at the company’s refinery in Anacortes that killed seven people and that garnered 39 “willful” and five “serious” violations from state regulators who concluded the explosion was preventable.

In the letter, the groups, citing data from the federal Toxics Release Inventory, say Tesoro “is one of the top 50 toxic air polluters in the country.”

In a phone interview Tuesday, Dan Riley, vice president of state and local government affairs for Tesoro, defended the company. “Safety and environmental stewardship are deeply ingrained in Tesoro’s culture,” he said. “It’s top-down priority for us, and we’re proud of our performance.”

Riley said the company’s thoughts and sympathies are with the victims of the Quebec calamity. He said it’s important to understand why the accident occurred, and “those facts are going to come out” soon. He said Tesoro and Savage are confident they can build a state-of-the-art facility “and that we can build safety into that facility.”

Asked how his company will respond if commissioners request more public safety information, Riley said the permitting process used by the state Energy Facility Site Evaluation Council “is very rigorous. It’s through that process that we will be building our plans, and the public is going to have significant opportunities to weigh in and participate in that process.”

After Tuesday’s public hearing, commissioners said they have more questions in the aftermath of the Quebec tragedy. Commissioner Oliver said he’ll be monitoring the results of the accident investigation to understand why it occurred. He said he’ll want to know what safeguards railroad operators build into “the 120-car trains parked out here in Camas.”

“We’ve got safety issues,” said Commissioner Wolfe, and the potential for increased train traffic through the Columbia Gorge. He said if the port says no to oil trains under the plan by Tesoro and Savage, “it’s still going to come.” So another question is how the port, in working with stakeholders, will address the situation in a way that protects the community. “This is just the camel’s nose under the tent of all that’s going to happen,” Wolfe said.

Aaron Corvin: http://twitter.com/col_econ; http://on.fb.me/AaronCorvin; 360-735-4518; aaron.corvin@columbian.com

Columbian Port & Economy Reporter