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Tesoro-Savage, state regulators spar

Length of oil terminal review process at issue

By , Columbian Port & Economy Reporter
Published:
3 Photos
An oil train passes the Vancouver Land Bridge in  June 2014.
An oil train passes the Vancouver Land Bridge in June 2014. Photo Gallery

July 23, 2013 — Port of Vancouver commissioners approve oil terminal lease with Tesoro Corp. and Savage Cos.

Aug. 29, 2013 — Tesoro and Savage file building application with state Energy Facility Site Evaluation Council.

Oct. 22, 2013 — Port commissioners convene new public hearing and approve the contract a second time.

June 22, 2015 — The evaluation council says the oil terminal’s draft environmental impact analysis won’t be published until Nov. 24

The companies seeking to build the nation’s largest rail-to-marine oil transfer terminal in Vancouver and the state regulators examining the proposal are blasting each other over how long it’s taking to complete the review process.

In a sharply worded letter, Tesoro Corp. and Savage Cos., operating as Vancouver Energy, accuse the state Energy Facility Site Evaluation Council of lacking transparency and accountability. The evaluation council fires back in a letter of its own, saying the companies’ initial study of the oil terminal’s impacts and risks was subpar and in need of a “major rewrite.”

The fracas underscores a rise in tension between both parties during the examination of the oil terminal, proposed to handle an average 360,000 barrels of crude per day at the Port of Vancouver. Last month, the companies rejected the evaluation council’s request to give the public 60 days, instead of the maximum 45 days allowed by state law, to review and comment on the project’s draft environmental impact analysis.

July 23, 2013 — Port of Vancouver commissioners approve oil terminal lease with Tesoro Corp. and Savage Cos.

Aug. 29, 2013 — Tesoro and Savage file building application with state Energy Facility Site Evaluation Council.

Oct. 22, 2013 — Port commissioners convene new public hearing and approve the contract a second time.

June 22, 2015 — The evaluation council says the oil terminal's draft environmental impact analysis won't be published until Nov. 24

The latest brouhaha erupted over the news that the oil terminal’s draft impact analysis won’t be published for public review and comment until Nov. 24. That new timeline contrasts with earlier indications that the expansive document would be ready this summer. The entire review process, which will include a judicial trial focusing on the oil terminal and a recommendation to Washington Gov. Jay Inslee, began nearly two years ago when Tesoro and Savage applied to build the project.

In a June 24 letter to the evaluation council’s chairman, Bill Lynch, executives with Tesoro, a petroleum refiner, and Savage, a transportation company, say they’re “profoundly disappointed and deeply frustrated” by the new schedule for completing and publishing the draft environmental impact analysis.

“This ongoing pattern of delay and uncertainty demonstrates once again that the permitting process in Washington is broken, severely lacking in accountability, and a significant deterrent to enterprises looking to conduct business in the state,” wrote Keith Casey, executive vice president of operations for Tesoro, and Nathan Savage, a senior vice president and group leader for Savage.

The evaluation council sees it differently. In a July 2 letter responding to the companies’ criticism, the council says the preliminary draft environmental impact analysis submitted by Tesoro and Savage failed to “meet even the basic requirements for fully describing and analyzing project impacts.”

That failure, coupled with the preliminary document’s flaws “in the areas of emergency response, marine and rail risk analysis and seismic risk” prompted the evaluation council’s consultant, Cardno, to undertake a “major rewrite” of the document, according to Stephen Posner, the council’s manager.

‘Rejected or ignored’

In addition to highlighting the growing tension between the companies and the evaluation council, the dueling letters illustrate a shift in the tone of public remarks by Tesoro and Savage about the evaluation council’s permitting process. In early 2014, for example, company officials made public statements about the council’s rigorous process to double-check safety and other controls, and urged people to let the process take its course.

“We think Washington has established a fair and open process, and we’re participating in it, and we’re happy to go through it,” Kelly Flint, senior vice president and general counsel for Savage, told The Columbian in a Feb. 16, 2014, story that profiled the evaluation council. “We’re confident we’ll demonstrate our compliance.”

The companies’ June 24 letter indicates they’re no longer in high spirits about the evaluation council’s process.

“On numerous occasions, we asked the council to provide the public and other stakeholders a complete project review schedule so the process can be more predictable, accountable and transparent as state law envisions,” the companies wrote. “Each request was either rejected or ignored.”

The companies call on Lynch, the council’s chairman, to “intervene and set an efficient and firm timeline for the entire (council) review process and then insist that (council) staff and consultants manage to that timeline.”

The companies also wrote that they submitted a comprehensive preliminary draft impact analysis, per the council’s rules, and have fully responded to requests for information.

In responding to the companies, Posner, the council’s manager, wrote that the companies’ preliminary draft impact analysis “was not comprehensive” and instead described the oil terminal “in an approving manner.” That doesn’t meet the council’s requirement to “conduct an unbiased analysis” of the project under the state’s Environmental Policy Act.

As a result, Posner wrote, the council’s consultant, Cardno, “has been undertaking a major rewrite of the document” submitted by the companies.

“In addition,” Posner went on, “project design changes only recently received from (the companies) will need to be analyzed to determine what impact they will have on the ongoing environmental analysis.”

Posner also wrote that many of the oil terminal’s complicated issues “are unprecedented in the permitting of proposed energy projects in the state of Washington and must be fully analyzed before making a legally defensible recommendation to the governor.”

Tesoro and Savage submitted their application to build the oil terminal on Aug. 29, 2013. By law, the evaluation council must reach a recommendation to Washington’s governor within 12 months of receiving a building application. But the law also allows deadline extensions, which are not unusual given the size and complexity of major energy facility proposals.

Once the recommendation is made, the governor has another 60 days to accept or reject the proposal or send it back to the evaluation council.

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