How to calculate CO2 at export terminals? Let us count the ways

Brittany Patterson, E&E reporter

This is the tale of two proposed export terminals.

Both located in Washington state, one would send 44 million metric tons of coal each year from the Powder River Basin in Wyoming and Montana to power plants in Asia. The other would ship methanol, a colorless, volatile alcohol used in manufacturing, refined on site using natural gas through a deep water port to Asian markets.

Both are considered key for the economic development of the Pacific Northwest and increasing U.S. exports of fossil fuels and fossil-fuel-based products to Asia. Both projects must be evaluated for potential environmental consequences, including their impacts on climate change. That includes emissions from transporting products overseas.

In the case of the methanol terminal, officials calculated the greenhouse gases emitted from the ocean transport to 3 nautical miles out to sea, or 3,900 metric tons of CO2 emissions each year. But when it came to the coal plant, regulators tallied emissions from shipping goods all the way to China, Hong Kong, Japan, South Korea and Taiwan. It came to 300,000 metric tons of carbon dioxide each year and up, depending on the scenario.

It’s just one example of how state officials treated climate impacts in dramatically different ways for each project, so much so that proponents of the coal terminal say they are being unfairly targeted. Experts say inconsistencies in judging the influence of carbon emissions threaten to undermine the laws requiring government agencies to consider the environmental consequences of a project before taking action.

The potential outcomes are documented in what’s known as an environmental impact statement, or EIS, and because the guidelines for if, how and when to count potential greenhouse gas emissions are sparse, agencies wishing to include climate change impacts are largely left to their own devices.

“I think the main problem is that the quality/integrity of the analysis varies between documents, and this can affect project outcomes,” said Jessica Wentz, associate director and postdoctoral fellow at Columbia University’s Sabin Center for Climate Change Law. “Also, in the absence of guidelines or a standard approach, there is more room for an agency to adjust the scope or method of its analysis in order to reach the conclusion it wants to reach.”

At Millennium coal terminal, CO2 counts big

The issue of coal terminals on the West Coast reared its head in 2010. Asia’s demand for coal had risen 400 percent since 1980, leading U.S. producers, especially those peddling coal from the resource-rich Powder River Basin, to propose six coal export terminals across Oregon and Washington, the most direct line to Asia. Combined, the projects had the capacity to ship more than 100 million tons of coal annually.

The Millennium Bulk Terminals-Longview LLC, proposed in 2012, is now the last proposed terminal left standing and is currently under environmental review. If approved, the terminal would be constructed on the site of a defunct 1941 aluminum factory in Cowlitz County, Wash., and its proponents say it would create nearly 3,000 jobs, including those from its construction.

On April 29, Cowlitz County and the Washington State Department of Ecology jointly released the draft EIS. Of the 23 areas the blueprint examined — which ran the gamut from how the project would affect water pollution to coal dust, increased transportation and greenhouse gas emissions — nine were identified as being hit hard.

Officials foresaw increased rail traffic — an additional 16 trains per day — and 840 ships per year. The draft report also noted many of the problems could be mitigated with plan changes or certain approvals. On the hotly debated concern over coal dust, the study cleared the terminal.

“The good news is that [the draft EIS] made it very clear under the normal scope of view where the site is, there are no documented impacts,” said Bill Chapman, president and CEO of Millennium Bulk Terminals-Longview.

But when it came to greenhouse gas emissions associated with the project, Chapman argued the environmental review went far beyond the “normal scope,” overstepping the bounds of the state law.

For starters, the report examined how many greenhouse gas emissions could come from the construction terminal — the equivalent of adding 5,000 cars to the road annually. Next, it considered how many tons of emissions would be generated by transporting Powder River Basin coal from the mines to the terminal in Washington, as well as emissions from operations of the terminal — the equivalent of adding 672,000 cars and 8,100 cars to the roads each year, respectively. Then, the analysis calculated the emissions generated when the coal is placed on a ship and transported to Asia, as well as the emissions that are generated when the coal is finally burned at Asian power plants.

Using economic modeling, the document then assessed the changes in both U.S. and Asian markets as a result of the terminal. The study found that by adding 44 million metric tons of coal supply in Asia, overall supply would increase and decrease international coal prices. Asian coal markets would respond to lower prices by consuming more coal overall and raise demand.

In total, at full operation, the proposed terminal would result in an increase of about 2.5 million metric tons of greenhouse gas emissions each year, according to the analysis. That’s about the annual emissions of Vietnam.

Kathryn Stenger, spokeswoman for the Alliance for Northwest Jobs and Exports, said the review’s requirement to hold the project accountable for tracking and mitigating by her count 50 percent of all related greenhouse gas emissions is alarming.

“Issuing a never-before-seen demand like this, which will essentially require Millennium to pay for emissions on the other side of the world, should solicit overwhelming fear from the region’s trade and shipping industry as it plans ahead for the future,” she said.

In an emailed response, Dave Bennett, spokesman for the Washington State Department of Ecology, said each environmental review is done on a case-by-case basis and the level of analysis is based on the potential of a project’s impacts to be “probable, significant and adverse.”

“For greenhouse gases, Ecology determined that an evaluation of emission from construction and operation of the proposed project and changes in transportation and end-use combustion would be evaluated,” he said. “Greenhouse gases contribute to climate change which in turn can affect Washington State by affecting snowpack levels, wildfire seasons and ocean acidification.”

When it comes to methanol, a different story

Proponents of the Millennium project point just a dozen miles south to the proposed Kalama Manufacturing and Marine Export Facility as proof of what they perceive as discrepancies over how greenhouse gas emissions are evaluated for coal projects versus other commodities.

The draft EIS for that methanol plant, released in March and put together jointly by the Port of Kalama and Cowlitz County, looked at impacts of construction, operations and off-site vessel transport of the methanol plant. It also covered the cumulative impacts and the construction and operation of the natural gas pipeline and electrical services related to the project. The document examined a slew of potential environmental impacts, including greenhouse gas emissions.

Proposed by NW Innovation Works, the natural gas methanol plant would use cleaner-burning natural gas over coal, which is traditionally used to manufacture methanol. The report found the $1.8 billion plant would emit 61 percent less emissions than a coal plant and concluded the proposed project “would not result in unavoidable significant adverse impacts related to air quality or GHG emissions.”

The document did estimate the yearly emissions associated with transportation of the methanol via ship to Asia. But it only calculated emissions within 3 nautical miles off the coast of Washington state, not to Asian countries as the coal terminal draft document does. Project construction emissions and emissions generated by the nearly 1,000 employees the project would generate at its peak were found to be minimal.

The draft EIS also did not consider downstream emissions from Chinese manufacturing facilities that would use the olefins created with the methanol from the plant.

Officials involved in the Kalama project repeatedly stressed that the methanol project and coal terminal are “two completely different projects, with different impacts, lead agencies and technical teams.”

In an emailed statement, Ann Farr, the official with Port of Kalama in charge of the EIS process, said the analysis of greenhouse gas emissions is being conducted in a consistent fashion with Washington state’s 2011 State Environmental Policy Act (SEPA) climate change guidance, which broadly outlines how emissions should be considered in environmental studies.

Farr declined to answer specific questions about why emissions for product transportation were only counted within Washington state waters and why downstream emissions were not examined, saying that the technical team was in the process of updating the document and could not comment.

More guidance needed on measuring GHGs

Wentz of Columbia University said it is fair to compare the two projects, even acknowledging their differences.

In her review of the two draft environmental reviews, she said it did not appear the coal export terminal was being treated unfairly. Rather, she said, the way emissions were accounted for in the case of the methanol facility “strikes me as totally inadequate.” Wentz said the immense public interest the coal terminal generated could have accounted for the discrepancy.

“Granted, the combustion of coal produces far more greenhouse gas emissions than end-uses of methanol, which include but are not limited to combustion, from what I understand,” she said. “But I don’t see any quantitative analysis of greenhouse gas emissions for the methanol facility, not even operational emissions.”

In contrast, Jan Hasselman, a staff attorney with Earthjustice, said the coal terminal draft report did not go far enough in accounting for greenhouse gas emissions, calling it a “major shortcoming.”

“They write out 97 percent of emissions,” he said. “The state got it right here when they said, ‘We’re going to look at this,’ but we think they got it wrong, too. Forty-four million tons of coal is an enormous amount of coal, and SEPA requires that we deal with this.”

Wentz said increasingly agencies are recognizing climate change impacts need to be included in these environmental reviews, but without further state or federal guidance, it’s hard to know where to draw the line on the analysis. The White House Council on Environmental Quality (CEQ) issued draft guidance revised in 2014 that says federal agencies should consider climate change in their environmental impact analyses; however, only a handful of states have similar documents.

Furthermore, economic and emissions models for things like coal are more developed, although some argue they still have problem, whereas end-use emissions for something like olefins from methanol is harder to know.

“That might be part of why when you look at something like the methanol facility, it might not be possible for the agency to see where the end-use emissions might be,” she said. “With a coal export terminal, it’s just not that hard; you can provide a reasonable forecast.”

Without more guidance, she added, for now the line may have to be drawn there.

Currently, both projects are awaiting a final environmental review before regulators decide their fates.