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News / Business / Clark County Business

State report puts price on worst-case oil terminal spills

Counsel for the Environment submits expert testimony ahead of Vancouver Energy hearings

By Brooks Johnson, Columbian Business Reporter, and
Dameon Pesanti, Columbian staff writer
Published: May 27, 2016, 12:34pm

An oil train or tanker accident in the Columbia River could rack up more than $170 million in environmental damages that could take decades to repair, according to a report released Friday  by the state Attorney General’s Office.

Assistant Attorney General Matthew Kernutt submitted the report in advance of this summer’s adjudication hearings on the Tesoro Corp. and Savage Cos. oil terminal proposed for the Port of Vancouver. Kernutt, as counsel for the environment, represents the people’s interest in the environment for projects undergoing Energy Facility Site Evaluation Council screening, such as the proposed terminal.

The report looked at worst-case scenarios involving a tanker grounding in the river near Vancouver and a train derailing above Bonneville Dam. In the tanker case, eight million gallons of crude oil spilling in the river would cause environmental damage that would require $171 million for cleanup and mitigation. In the derailment scenario, 840,000 spilled gallons of oil entering the Bonneville spillway would cause up to $85 million in damage to river channel habitats and marshes.

In both cases, the report estimates it would take nine to 20 years to bring habitat back to “pre-spill conditions.”

In the oil terminal’s draft environmental impact statement, the likelihood of an oil train derailment is once every two years; the likelihood of a spill is every 12 years. A “catastrophic” derailment was identified as a once-in-22,000-years event.

The counsel for the environment’s report was put together by Abt Associates and Bear Peak Economics of Boulder, Colo. It is one of 75 pieces of “expert testimony” submitted by various groups for adjudication hearings, five weeks of trial-like sessions where evidence is presented and witnesses testify on the project in front of the evaluation council, a body comprising state and local officials.

“The potential impact reflected even in the narrow focus of our report demonstrates the significance of this project to the environment,” said Attorney General Bob Ferguson, a Democrat, in a statement. However, his office’s filing “does not constitute support or disapproval of the project at this stage.”

The governor gets final say on the project following a recommendation from the evaluation council, expected late this year or early in 2017 once adjudication wraps up and an environmental impact statement is finalized. Adjudication hearings will begin at 9 a.m. June 27 at Clark College’s Conference Center in east Vancouver. Hearings are open to the public, though not to public comment.

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Tesoro and Savage, operating jointly as Vancouver Energy, want to build a 360,000-barrel-per-day rail-to-marine terminal that would send continental crude to West Coast refineries. The crude would be delivered by four mile-and-a-half long unit trains, each pulling more than 100 tank cars with carrying capacities of 23,500 to 34,500 gallons. The nearly 3-year-old proposal has drawn the ire of environmental groups and others who call the terminal dangerous; supporters point to jobs and other economic benefits the terminal could bring. Vancouver Energy maintains the project would be built and operated safely.

In its report, Abt Associates Inc. says its experts examined only the potential impacts of two spill scenarios in the Columbia River, not how the spilled oil would impact the Pacific Ocean or coastline. The report only partially assessed how the public or Indian tribes would value the potential losses: “Thus we expect that we are underestimating the potential impacts to fisheries and the potential natural resource damages from these spill scenarios,” Abt Associates wrote.

The research firm said an eight million gallon spill of Bakken crude from a grounded tank is the “effective worst-case discharge” in the Lower Columbia. If spilled near Vancouver, the oil would reach Longview within a day and reach the mouth of the river after another four days. Environmental restoration after a tanker spill would cost $171.3 million.

“These estimates are considerably less than major oil spill settlements such as Exxon Valdez or Deepwater Horizon,” the report says. “These estimates do not include damages from oil discharged to the ocean, which, if considered, would result in substantially higher estimated damages.”

Specific estimates

If a tanker spilled eight million gallons in the month of May and the fishery were to close for a year, as some have after spills, the report estimates:

• A $17.8 million decline in the value of recreational fishing, quantified by their loss of enjoyment.

• $4.7 million in losses to commercial fishermen. However, lost revenue may be different than total losses because commercial fishermen may recoup some losses while the fishery is closed.

• $14.4 million drop in spending by recreational anglers, felt mainly by local businesses like bait shops and marinas.

The report says those losses shouldn’t be added together because they each measure something conceptually different.

Abt Associates used the Fir Island restoration in the Skagit Valley as the basis to calculate the cleanup costs for river habitat between Vancouver and mouth of the Columbia after a tanker spill.

“At a cost of $110,000 per acre, the total damages for injuries to the river channel habitats would be about $114.4 million,” the report says.

If the oil reached wetlands within the 100-year floodplain, but outside the designated river channel, clean up of those areas could cost $56.9 million.

A worst-case scenario for a  crude-by-rail train derailment could mean spilling 840,000 gallons of Bakken crude upstream of the Bonneville Dam, with most of those gallons going through the spillway. The report approximates 140 river miles could be contaminated by oil.

Although the worst-case train derailment would release about 10 percent of the oil released in a worst-case tanker spill, it would expose more of the Lower Columbia River to oil.

Abt Associates estimates marsh restoration would cost $54.5 million. Cleanup to adjacent floodplain habitat is estimated to be $30.4 million.

Beyond the danger of dumping large volumes of oil, the researchers expressed concern over the potential harm polycyclic aromatic hydrocarbons could have on white sturgeon, salmon and steelhead fish and spawning grounds.

The BNSF Railway line, which would carry the oil to the terminal, runs for more than 200 miles along the Columbia River from the Tri-Cities to Vancouver.

Columbian Business Reporter
Columbian staff writer