Tuesday, January 25, 2022
Jan. 25, 2022

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Port of Vancouver stalls release of oil terminal lease documents

Oil terminal opponent LaBrant votes for lease amendment

By , Columbian Business Reporter

Six days after Port of Vancouver commissioners publicly approved a lease amendment for the country’s largest proposed oil terminal, the port has yet to make the document publicly available.

Though commissioners read, tweaked and unanimously approved it April 15, the port is refusing to release the lease amendment, which extends Vancouver Energy’s permitting deadline as the rail-to-marine terminal continues through a third year of the state vetting process.

Public records requests by The Columbian and at least one other group are outstanding.

“We don’t have an amendment to provide because it has not been finalized and signed by both parties yet,” port spokeswoman Abbi Russell said Thursday. She suggested the amendment could be viewed on the CVTV recording of the meeting, where the document was projected onto a screen.

In other words, Vancouver Energy perhaps has not yet accepted what the port commission has already approved. The company had no comment on the amendment Thursday.

The port commission’s approval of the amendment capped a rush of activity surrounding the request by Vancouver Energy, the joint venture of Tesoro Corp. and Savage Cos., which sought financial relief as its permitting and early termination deadline approached. Without an amendment, Vancouver Energy faced the prospect of huge increases in its lease costs for port property, even though the terminal has not yet won state approval.

Port staff recommended against that request, as did many terminal opponents at a daylong public hearing last week.

Seeking a middle ground between the oil terminal opponent and supporter on the three-person commission, Commissioner Brian Wolfe submitted a counteroffer to Vancouver Energy’s proposed lease amendment.

The port’s staff requested a 45-minute break in the public meeting and privately drafted specific language for Wolfe’s amendment, which it then submitted to the commission for review and a vote. That staff refinement included some new terms that neither the company nor Wolfe and his two fellow commissioners had publicly proposed.

One such provision provides an emergency exit for the port or Vancouver Energy if the state gives the project an unfavorable  conditional approval. That escape hatch did not exist in the original lease approved in 2013.

Many of the projects that go through the state Energy Facility Site Evaluation Council come with conditions, which can also be attached by the governor, who has final say over the oil terminal and other large energy projects.

“If there were a condition attached to the approval that would increase either party’s financial obligations or reduce the Port of Vancouver’s ability to operate the way it operates with other tenants, then that would be a basis to reject approval,” port lawyer Dave Hepler said April 15 when walking through the lease changes.

The approved change could let the port or Vancouver Energy out of the lease without penalty if state approval comes with conditions one or the other  doesn’t like.

“It’s meant to be helpful to both parties,” Hepler said.

Other language cleanup was added and approved, such as a three-day window around the permitting deadline to prevent automatic lease termination. During the meeting, Hepler requested a chance to clean up the amendment after the meeting, as it was put together in less than 90 minutes.

Port leases are set “upon such terms as the port commission deems proper,” according to state law. Substantial changes — including any requested by Vancouver Energy or made by port staff in their ongoing discussions — would likely require another vote by the commissioners.

Port commissioners next meet Tuesday morning, and the current agenda released Thursday shows no action on the lease.

A ‘slam dunk’

If it was Wolfe who threw the surprise lifeline to the proposed oil terminal last week — presenting the counteroffer to Vancouver Energy’s requested changes that was approved 3-0 — then it was Commissioner Eric LaBrant, an oil terminal critic, who gave the surprise vote for it.

Though LaBrant didn’t have the votes to kill the lease extension, he did what he thought was the next best thing — secure a foreign export ban in the lease amendment.

Tesoro Vice President Keith Casey argued against the ban during the meeting, even while saying it would not be economically feasible to export from Vancouver.

“So it shouldn’t be a problem to put that condition in the lease,” LaBrant fired back.

LaBrant elaborated on his decision Wednesday by phone.

“I’m still not in support of the terminal, and I think that restriction on exports is going to prove important in the long run,” he said. “We’ve been told, and (the evaluation council) has been told, that the intent of the terminal is specifically for moving American oil to American refineries. So in a way this is kind of a test for Tesoro.”

How they respond to the export ban, which port staff said may not be legally enforceable, could be telling, LaBrant said.

“A lot of the materials they’ve sent out have gone so far as to have an American flag on it,” he said. “So asking them to keep the oil in America should be a slam dunk for them.”

Though he couldn’t convince the commissioners to put in a provision to limit oil to domestically sourced — it now must be “pipeline grade” — LaBrant said that one “clear victory” is the fact this was negotiated in public. Although what the commissioners’ staff and Vancouver Energy officials decide to do with that publicly negotiated work remains up in the air.

Columbian Business Reporter