Arbitrary and capricious: Rule of law binds agencies

The Olympian | Rob McKenna | November 17, 2017

After five years and thousands of hours of public testimony, it took a Cowlitz County judge just five seconds to say what many of us have long suspected: some state regulators are out of control, and important parts of the state regulatory process are now tools of activist groups.

Cowlitz County Superior Court Judge Stephen Warning made his comments in response to a dispute over access to the Columbia River for the Millennium Bulk Terminals project. They suggest a level of frustration not often seen from the bench. The Millennium case is a striking example of how agency regulatory processes can be appropriated by activists seeking to deny or block projects that don’t align with their political agendas.

Judge Warning, though, saw through that strategy. His October ruling is based on the principle that the rule of law must be applied evenly, regardless of politics. Regulatory agencies must not exceed the authority granted to them by our elected representatives in the Legislature.

The dispute before Judge Warning involves a lease from our state Department of Natural Resources currently held by Northwest Alloys, and its sublease with Millennium Bulk Terminals. Millennium’s proposed coal export terminal in Longview, Washington, has been under local and state regulatory review for a record five years, and counting. At issue is whether Northwest Alloys and Millennium can build a dock under the lease.

Read the full piece here.

Washington export terminal gets first permit

E&E News, Dylan Brown, July 20, 2017

Millennium Bulk Terminals received a key permit for a proposed $680 million export facility along the Columbia River in Longview, Wash.

County officials in southwestern Washington state awarded a first approval to developers of a major coal export terminal there, part of an effort to increase shipments from the Pacific Northwest.

The move provides the venture with an important lifeline but doesn’t guarantee the project will come to fruition amid ongoing headwinds.

Millennium Bulk Terminals received a critical area permit for its proposed $680 million, 44-million-ton facility along the Columbia River in Longview.

Cowlitz County found the company could meet state standards for development in designated areas like wetlands, wildlife habitat and flood plains.

“It’s not an authorization to go construct, but it’s saying, ‘Hey, for all your critical area activity, this is what you’re going to have to do to be compliant,'” Nick Little, deputy director for Cowlitz County’s Building and Planning office, told the Longview Daily News.

While the county permit is the first of many required approvals for the 5-year-old proposal, Millennium President and CEO Bill Chapman hailed it as “a new and exciting phase.”

“Our goal of building a state-of-the-art export terminal in Cowlitz County, creating thousands of family-wage jobs and pumping millions in tax revenue into the Washington economy is now closer than ever,” he said.

Read more here.

Millennium Resubmits Permit Application for Terminal

Administrative action underscores unusually lengthy review process

SEATTLE — A procedural action taken Tuesday by Millennium Bulk Terminals at the request of the Washington State Department of Ecology underscores the lengthy regulatory review process for the proposed export terminal project.

At the agency’s request, Millennium refiled its permit application for the proposed coal export terminal in Longview. The filing was done to accommodate inconsistencies in permitting deadlines between the state (Ecology) and federal governments (US Army Corps of Engineers).

Mariana Parks, spokeswoman for the Alliance, said that while the re-filing was merely an administrative correction, it highlights the ongoing regulatory review process for this project.

“This is another reminder of just how long this process has stretched out,” said Parks. “We continue to emphasize the economic importance of Millennium Bulk Terminals, both in terms of the jobs it would create and the value it would bring to Washington as the most trade-dependent state in the nation. Millennium has worked diligently to ensure this project meets the high standards for environmental protection in Cowlitz County and in Washington,” she added.

“We look forward to reviewing the U.S. Army Corps’ final EIS, the next major milestone for this project.”

Mike Bridges, president of the Longview/Kelso Building Trades/IBEW Local 48, added, “This project is essential to the wellbeing of Southwest Washington. It will bring thousands of jobs to a region that needs the work. This action is another unfortunate reminder that this project has taken far too long – and it’s far past time to make a decision.”

The GeoPolitics of energy

The Tri-City Herald, Dr. James Conca, February 12th, 2017

If you think we’ve been doing a reasonable job of curbing fossil fuel use in our electricity production worldwide, you would be mistaken. While coal use in America and Europe has decreased because of cheap natural gas, coal use worldwide is still increasing.

Oil has also been increasing globally. Coal and gas account for two-thirds of human electricity production and petroleum provides 95 percent of our transportation fuels.

Non-hydro renewables have certainly grown but are still extremely small with respect to fossil fuel growth, accounting for less than 5 percent of global electricity production.

Nuclear and hydroelectric, the only energy sources that have ever displaced a significant amount of fossil fuel, are also growing moderately, mainly in China, and together make up about 29 percent of electricity production.

Washington is the biggest exception to this fossil rule, being 78 percent hydro, 9 percent nuclear, 6 percent renewable, 3 percent gas and 4 percent coal. Our last coal plant is going away soon.

Into this energy reality steps our new president. Mr. Trump supports an all-of-the-above energy mix with a heavy tilt toward fossil fuels. He wants to eliminate all regulations and has no regard for climate change. Pretty much a repeat of the 20th century.

But the new administration will have little effect on our energy mix. Fracking and other new technologies have allowed America to produce more oil and gas than ever, and we are no longer dependent on foreign oil. We import less oil than at anytime in the last 30 years, and most of what we import is from Canada, not Saudi Arabia.

Renewables under President Trump should be fine. States like Texas, Oklahoma, Iowa, Kansas, Wyoming and North Dakota are overflowing with wind energy jobs and money, so it is unlikely Congress will reverse course. Energy Secretary Rick Perry likes wind and nuclear.

However, while we are busy switching from coal to gas, the developing world sees coal as their savior.

There are 1.5 billion people that have no access to electricity whatsoever. 2.4 billion people still burn wood and manure as their main source. And about 3 billion more people will be born in the next 30 years.

This is a lot of people who will require a lot of energy. Just to survive. It turns out that lifting someone out of poverty requires at least 3,000 kWhs/person/year.

The 7.5 billion people of the world produce about 20 trillion kWhs per year. The billion people in the developed world use half of that, and the rest of the world uses the other half.

But if the world’s population grows to 10 billion, we will need at least 30 trillion kWhs per year to eradicate global poverty and its evil stepchildren, war and terrorism.

That’s an additional 1,200 GenIII nuclear power plants. Or 3,000 coal-fired power plants. Or 10,000 gas-fired power plants. Or 10 million large wind turbines.

Besides costing between $10 trillion and $20 trillion, how can we provide this much energy to a developing world that has almost nothing — no infrastructure, no expertise and no resources?

By giving them coal.

This is not what we usually think these days, but of all energy sources, coal requires the least infrastructure to construct, transport and operate. It’s just that simple. This conundrum was what the Paris climate conference was all about, and we have not figured out an alternative.

Coal is the obvious energy source to bring a country’s starving people into the modern world. After that, they may have the luxury to care about the planet.

Just ask China.

Dr. James Conca is senior scientist for UFA Ventures of Richland, a science contributor to Forbes, and together with co-author and spouse Dr. Judith Wright, author of “The Geopolitics of Energy: Achieving a Just and Sustainable Energy Distribution by 2040.”

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The World Is Burning More Coal Than Ever

The Daily Caller, Michael Bastasch, December 12, 2016

Global coal use may be slowing down due to global warming regulations, but the world is still using more coal than ever before, according to a report by an international energy agency.

Politicians and environmentalists around the world heralded the ratification of the Paris climate agreement this year, but the United Nations (U.N.) treaty to cut greenhouse gas emissions hasn’t done much to squash demand for energy in developing countries.

“The world is burning more coal than ever,” reads a new report by the International Energy Agency (IEA). “Now we are witnessing another halt, but, even so, if we consider coal consumption from a historical perspective, the world has never burned as much coal.”

China is the main driver of global coal growth, and IEA expects coal use to keep growing until 2021 depending on what the Chinese decide. Environmentalists have tried to claim China is weaning itself off coal, but more recent reports indicate the communist country is mining more of it.

“Because of the implications for air quality and carbon emissions, coal has come under fire in recent years, but it is too early to say that this is the end for coal,” Keisuke Sadamori, the director of the IEA’s energy markets, said in a statement.

IEA predicts coal share in the global energy mix peaked in 2011, but the agency notes, “coal will continue to be the preferred source of power generation” because it’s “relatively affordable and widely available.”

Coal will still provide 27 percent of the world’s electricity by 2021, the IEA concludes, despite accounting for 45 percent of the world’s energy-related carbon dioxide emissions.

Coal has been the biggest target of global warming activists in recent years because of its high carbon content compared to natural gas or other energy sources.

In the U.S., environmental lawsuits and Obama administration regulations helped reduce coal consumption 15 percent as power plants were forced to retire. New drilling techniques allowed companies to cheaply switch to natural gas instead of having to make costly upgrades to aging coal plants.

In contrast, China promises to ramp up its coal use by as much as 20 percent.

China’s new five-year plan would “raise coal-fired power capacity from around 900 gigawatts last year to as high as 1,100 gigawatts by 2020,” which is “more than the total power capacity of Canada,” according to The Wall Street Journal.

The news came after U.N. delegates met in Marrakech, Morocco to hash out implementation of the Paris agreement that countries crafted in France last year.

China pledged to “peak” emissions by 2030, which energy analysts have criticized as not actually doing anything to cut global warming emissions.
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The ‘War On Coal’ Unexpectedly Hits A Washington Town Struggling To Get By

The Daily Caller, Joseph Hammond, August 31st, 2016

LONGVIEW, Wash. — In the morning, the industrial site nestled along the Columbia River is eerily quiet.

Lori Black is one of the first employees to arrive most days. She knows the site well, has worked there for 12 years. Five years ago, Millennium Bulk Terminals acquired the 540-acre site. Officials planned to convert an old aluminium smelter into a profitable industrial export facility. They restored a wetland area in one part of the site to show their commitment and began the permit process to export coal.

That was four years ago.

Today, there are more birds and fish on the site than workers, and the coal terminal project has yet to be approved. The project’s environmental approval process is nearing the longest in the history of Washington state.

The terminal’s extended delay has had an economic impact on Longview, where the unemployment rate is roughly 8 percent, higher than the average for both the country and the state of Washington as a whole.

If completed, the project will export 44 million tons of coal per year to East Asia and provide jobs not only in Longview, but further inland in states like Wyoming and Montana.

The Washington Ecology Department told The Daily Caller News Foundation its final environmental review on the coal terminal will be released in 2017.

Regulators want the project to mitigate 50 percent of the greenhouse gas emissions generated not only at the site, but also from the use of the exported coal in Japan or Korea. Supporters call the regulation unprecedented; no other project in the state has been forced to consider life-cycle emissions.

“The precedent that the [draft environmental impact statement] sets would have enormous impacts for businesses across Washington State,” explained project President Bill Chapman who is an environmental lawyer by trade.

“Imagine if Boeing were required to include a calculation of the emissions from every flight one of its planes may take. Or if Amazon had to mitigate for the impacts for every product it shipped, no matter the usage,” Chapman said.

Chapman’s staff is small. The site only employs a mere 36 employees. If approved, that figure would jump more than 10 times, all for the local community. The 300-plus jobs would be in addition to the 2,650 linked to the construction of the $68 million project, as well as benefits to coal-mining communities in other states. Supporters estimate the terminal will generate $5.4 million annually in taxes for the state of Washington.

“It’s an economy that used to have twice as much income and activity. With unemployment at 8 percent, this community needs jobs. And not just minimum wage or service jobs – we need family wage jobs, which is what the community is used to and what Millennium will provide,” Chapman said.

While at work, Black often talks about the future of her two sons and the town they call home. Her youngest son is in the National Guard and is studying at a community college with an eye toward a future in the legal profession, she says. Her eldest graduated from community college two years ago, but was only able to find work at the local Kentucky Fried Chicken. He might have been lucky to find even that; the Longview Kentucky Fried Chicken is the only KFC for a 45-minute drive in either direction along the nearby I-5.

While both of her parents worked in timber mills, Black’s career followed a different path. After earning a university degree in California, she returned to Longview to try her hand in industrial work, eventually becoming an ore loader. It was difficult work, but she got the hang of it. When the site began using a safer automated system, she was elated. Yet, the improvement was short-lived as the smelter closed one year later.

In 1923, Long founded what he hoped would be a modern city for workers at his timber mill. It’s possible the mill was the largest in the world at that time.

Long commissioned a number of structures the community still uses today, including a public library and the Monticello Hotel. The industrial focus of the town began to shift during World War II. The site of the proposed Millennium Bulk Export terminal was turned into a coal-fired smelter to produce aluminium, a key component of Allied war planes.

Long’s statue still sits in the park downtown. A few feet away, Eric Gray, 37, played with his toddling son. Gray works as driver for a company that escorts railroad engineers to their assigned trains.

Gray made his support of the project clear, “I would really like to see it happen, I work for a company that services the train industry.”

“We pick-up conductors and engineers from wherever they stop and the people who I pick-up tell me that they put a coating on the coal so the dust doesn’t go everywhere,” Gray said. “It is more profitable to these companies to keep the dust contained. That’s the biggest complaint about the project but, people who are complaining about that are complaining about it from a position of ignorance.”

At a café within sight of the Monticello Hotel, city councilman Mike Wallin described the local economy, “A lot of people in the community are facing job loss and foreclosure on their homes. The area is really hungry for growth and we’re not in a position to get a Honda plant or a server farm.”

“Our strong point, what we are good at is shipping and receiving and we can take advantage of that,” he suggested.

The faded sign of the Monticello Hotel notwithstanding, the town of 37,000 people he insists is a great place to live. “With more money to fund new school teachers and new public workers, it could be even better,” Wallin said.

In Longview, disagreement with the plan can often focus on aesthetic issues. Steven Haine took a break from his jog around Longview’s Lake Sacajawea Park to offer his thoughts on the project.

“The new terminal will mean that the view of the Columbia River from a cemetery will be obstructed, now what kind of legacy is that?” he asked, to which a fellow runner gave his nod.

Nevertheless the majority of residents who spoke to TheDCNF during a visit to the town seem to be in favor of the project and the need to bring jobs to Longview.

A two hour drive north in Olympia, Wash., the Washington Farm Bureau’s short office building sits in a clearing.

CEO John Stuhlmiller, explained why Washington farmers support the Longview coal project. Stuhlmiller believes coal exports will further develop trans-pacific trading networks that will benefit farmers. He said the silos and facilities built for coal could easily expand to include agricultural exports. Rail improvements needed to support the coal trade will also help agriculture.

Making his pitch for the site, Stuhlmiller offered a big picture argument, “We are an export orientated state and we need to stay that way. This site has been handling coal since 1941, look if this site isn’t built the coal is going to be exported elsewhere. Maybe it will be exported from Canada or Mexico which would be a net loss of jobs to us here in Washington.”

“We want Asian economies to use American coal which is often higher quality and cleaner burning than the coal from other countries,” Stuhlmiller noted.

The Washington Farm Bureau is joined by the construction trade in its support for the project.

Lee Newgent, the executive secretary of the Washington State Building & Construction Trades Council speaks for many supporters of the site when he expresses frustration with the long approval process, “This is Washington’s longest ongoing project and it’s a record holder and it gets longer every day.”

“If you look at Canada, our competitor, it is an 18-month process to get environmental permits,” he said. “In Washington, we embrace the fact that you need to have an environmental impact assessment but, you shouldn’t be able to stall it out for infinity.”


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GE Wants to Bring More Life to Coal

The Wall Street Journal, Ted Mann, August 17th, 2016

General Electric Co. has stopped trying to write coal’s obituary.

The conglomerate—one of the world’s biggest suppliers of power-plant equipment—for years played down coal’s future as challenged by environmental and cost issues. Instead, it has promoted natural gas as the fuel of the future.

But a combination of factors—from GE’s push into far-flung global markets to a dire need for growth after the financial crisis—have triggered a change of heart. GE is bullish about coal again.

GE leaders say they can reap decades of profits from existing coal power plants, installing upgrades that will come in response to slowly tightening emissions rules and utilities’ desire to boost output. The company nearly doubled its fleet of large turbines in coal plants, to more than 1,500 world-wide, through its $10 billion acquisition of Alstom SA’s power business last year.

And executives say they are poised to build coal plants in developing economies, such as in India and across Southeast Asia, where demand for power is growing quickly and other sources of fuel are unavailable or too costly.
“We expect a quite-stable if not increasing amount of installations in coal,” said Andreas Lusch, the chief executive of GE’s steam-power-systems business, who came over to the company in the Alstom deal.

Even as natural gas and renewable energy chip away at coal’s leading market share, global electric production fueled by coal in 2040 is likely to be 23% higher than in 2012, the U.S. Energy Information Administration said this spring.

Two-thirds of the growth in coal-fired power generation would come from new units going online in India and China alone, even as coal use declines in the U.S. and Europe, the EIA said.

For years, GE assured investors that coal was on its way out and that they should focus on what the company called an “Age of Gas” powered by its heavy-duty gas turbines. In the mid-2000s, GE bet on a Bush-administration push for new nuclear-power plants that never materialized. And in 2005, the company launched a marketing campaign dubbed “ecomagination,” which promoted cleaner technologies such as natural-gas-fired turbines and higher-efficiency jet engines.

These days GE executives say they are simply following demand as millions of people in India and other markets gain access to dependable electricity, in some cases for the first time. “They are as hungry for energy as we were probably 40 or 50 years ago, and do not have this mind-set to say we want everything to be renewable,” Mr. Lusch said. “First they want power.”

Rivals are more skeptical. “Not to be cynical, but if I just spent $13 billion on buying Alstom I might be saying something similar,” said Randy Zwirn, chief of Siemens AG’s steam-power service business, referring to the deal’s original purchase price. “But we clearly see the majority of growth coming from number one, renewables, and number two, natural gas.”

GE Power is the conglomerate’s second-largest segment, after its jet-engine business, with $21.49 billion in revenue in 2015, or 20% of GE’s total industrial sales.
Much of GE’s projected growth from coal will come from upgrading existing coal plants, including in the U.S. and Europe, which lag behind natural gas in efficiency but are too vital to the power grid to retire—and too expensive to change out for gas turbines.

“We’re extending investment in lifespan,” said Ganesh Bell, the chief digital officer for GE’s power division. GE says a single percentage-point increase in the efficiency of a coal plant—such as those it says it can provide through improved software—can mean $20 million in added value over 10 years. GE also says its software upgrades can cut carbon-dioxide emissions by 3%, potentially critical improvements for countries seeking to meet new emissions targets while still running coal plants to provide much of their electricity.

GE’s thinking also changed in the aftermath of the financial crisis. Before the crisis, the company was focused on its gas-turbine business in part because of its high profit margins, executives say. Gas turbines burn at extremely high temperatures, and that creates opportunities to sell spare parts and maintenance services. Coal, with its lower temperatures and longer replacement cycles, wasn’t as attractive.

The company’s mind-set shifted amid the sluggish global economy of the past half decade, GE says. The company is now pursuing growth wherever it can be found, one reason it wants to upgrade its coal operations.

That fits with some of the arguments GE used to reassure investors leery of the Alstom purchase, which significantly strengthened its position in natural gas and renewable energy. GE says the deal also gives it the potential to squeeze out cost savings from Alstom’s installed base, while simultaneously chasing growth as coal plants are built in India, Malaysia and other countries.

“There was an opportunity to consolidate the gas-turbine market,” said Scott Davis, an analyst at Barclays. “As a side benefit, they got an installed base in coal that they can upgrade.”

Keeping Alstom’s coal-turbine factories humming over the next several years will be vital to achieving GE’s roughly $3 billion in projected cost savings, he said. The coal market doesn’t need to grow for GE to reap those benefits, he added: “The reality is, gas hasn’t grown much either.”


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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.

‘Major milestone’ for export terminal permitting

E&E News, Dylan Brown, April 29th, 2016

A proposal to build a large coal export terminal in Washington state took a step forward today despite the misfortunes of its chief commodity.

The Washington Department of Ecology and Cowlitz County released the draft environmental impact statement for the proposed Millennium Bulk Terminals port project. The document comes more than four years after backers filed permit applications for the $680 million project near the mouth of the Columbia River in Longview, Wash.

Millennium, proposed to be built on 190 acres of a current industrial site, would have the capacity to ship 44 million metric tons of coal every year from across the western United States to Asia.

The draft EIS advances despite a critical partner, Arch Coal Inc., filing for bankruptcy earlier this year. Arch planned to export 20 million metric tons of coal from the Otter Creek strip mine in Montana through Millennium, but it recently abandoned that effort (Greenwire, April 26).

The bleak outlook for global coal markets, however, has not shaken the commitments of Arch and Lighthouse Resources Inc., Millennium’s majority shareholder, to develop the terminal, said Millennium Bulk Terminals CEO Bill Chapman, who hailed the draft EIS.

“This major milestone moves us one step closer to creating family-wage jobs in Longview, while meeting Washington’s strict environmental standards,” he said.

Proponents have touted the proposed terminal’s estimated economic impact — 2,650 direct and indirect jobs, and $5.4 million in annual state and local tax revenue.

Alliance for Northwest Jobs & Exports spokeswoman Kathryn Stenger noted Millenium’s investment in cleaning up a former industrial site, panning environmentalists demands to expand an already “excessive evaluation.”

“Washington has the most trade-dependent economy in the nation, and adding port capacity is essential for shipping all commodities — from apples and wine to coal and timber — to willing overseas trade partners,” Stenger said.

“The unprecedented demand to require Millennium to mitigate greenhouse gas emissions that occur on the other side of the globe will create a harrowing process that should terrify any Washington manufacturer or shipper looking to expand its facility,” she said in a news release.

Kris Johnson, president of the Association of Washington Business, a group affiliated with terminal advocacy group Keep Washington Competitive, expressed concerns about an increasing regulatory burden in Washington.

“We are glad to see today’s release of the draft EIS for Millennium but remain concerned other companies will not be willing to tolerate the delays of Washington’s permitting system and will not bring the needed investment to our state,” he said.

Climate concerns

Jan Hasselman, attorney for anti-export community advocacy group Power Past Coal, said neither Washington state, which has committed to aggressive emissions reductions, nor Millennium supporters, can continue to ignore coal’s role in climate change.

“For the last five years Millennium has been telling us that exporting coal won’t result in any [greenhouse gas] emissions. We now know otherwise,” he said. “Now, they’re trying to shift the conversation when we should be discussing why Washington should authorize up to 7 new coal plants worth of carbon emissions.”

The draft EIS includes various environmental effect scenarios based on market conditions and coal combustion abroad. One says the terminal could contribute 3.2 million metric tons in net annual carbon dioxide emissions or the equivalent of adding almost 700,000 new cars every year.

The document also expressed concern about rail traffic, and coal dust reaching waterways, land and vegetation. But the potential dust effects, as outlined by the draft EIS, may not be as significant as some environmentalists believe.

“Coal dust particles from trains related to the Proposed Action would enter the aquatic environment through movement of coal into and around the project area and during rail transport, but would not be expected to significantly affect behavior or survival of fish,” said the extensive study.

The public will have a chance to weigh in on the draft EIS at three meetings across the state — May 24 at the Cowlitz County Regional Event Center in Longview; May 26 at the Spokane Convention Center in Spokane, a major hub for coal trains headed to port from the Powder River Basin; and June 2 at the TRAC Center in Pasco, Wash.

John Stuhlmiller, CEO of the Washington Farm Bureau, said his group plans to voice support at the meetings.

“Farmers and growers understand the more opportunity Washington has to export, the greater the willingness there will be to invest in the infrastructure to support these exports,” he said in a press release.

The Army Corps of Engineers has also been reviewing Pacific Northwest export terminal proposals and been working with Washington state regulators. But the federal agency plans a more narrowly-tailored EIS.

Coal dynamics ‘permanently changed’

Despite today’s milestone, more dark news continues to emerge from coal companies and projects. Cloud Peak Energy Inc. this week reported a $36 million quarterly loss. CPE is looking to increase exports from another proposed Washington state terminal, Gateway Pacific.

“It is clear that the dynamics of the coal industry have permanently changed,” Cloud Peak CEO Colin Marshall said. “Where coal used to provide base load generation, it is now much more variable depending on power demand, renewable output and the price of natural gas. We are currently adapting to operating in an environment where shipments vary significantly from quarter to quarter.”

Cloud Peak also said it was moving away from the practice that allows companies to use their healthy balance sheet and not third-party bonds to guarantee mine cleanup obligations.

“The Company is proactively working to address the ongoing regulatory uncertainties regarding self-bonding programs in Wyoming by seeking to voluntarily transition away from self-bonding,” Cloud Peak reported today.

Click here to read the draft EIS.

State Wades into Uncharted Territory with Review Process

InsideSources, Shawn McCoy, May 3rd, 2016

A controversial provision included in a draft environmental review released last week for a West Coast port project could have far-reaching consequences for future developments, not only in the Pacific Northwest but across the county.

Planned for an abandoned industrial site in Longview, Washington, Millennium Bulk Terminals has been at the center of a unique debate due to its planned shipments of Powder River Basin coal to energy-starved markets in Southeast Asia.

The project boasts significant support from a diverse coalition, including the broader business community, many elected officials, agricultural interests, as well as prominent Washington labor leaders. However Millennium and another coal export terminal planned several hundred miles to the north in Bellingham have drawn the ire of the environmental community since they were first proposed more than four years ago.

In an apparent nod to the interests of the latter, the Washington state Department of Ecology and Cowlitz County included a unique provision in Millennium’s scope of review that no other project – in Washington, or the rest of the country – previously had to contemplate: Millennium would be required to account for the cumulative, lifecycle greenhouse gas emissions for its port. This meant that not only would it have to address the local environmental impacts of its project and the commodities moved through the port domestically, but it would also be held responsible for the burning of that coal thousands of miles away.

Along with setting expectations for the remediation of environmental impacts felt around the project site in southern Washington, the draft Environmental Impact Statement (EIS) requires a 50 percent reduction in greenhouse gas emissions from the use of one specific commodity shipped through the port. Project supporters immediately questioned this number as being both arbitrarily established and based on questionable modeling, noting that the report itself seemed to ignore modeling that demonstrated a decrease in carbon dioxide emissions over the life-cycle of the project when accounting for the increase in natural gas use.

“The unprecedented demand to require Millennium to mitigate greenhouse gas emissions that occur on the other side of the globe will create a harrowing process that should terrify any Washington manufacturer or shipper looking to expand its facility,” said Kathryn Stenger, the spokeswoman for a group of pro-infrastructure and pro-trade interests called the Alliance for Northwest Jobs and Exports.

Millennium CEO Bill Chapman said the company is “committed to meeting Washington’s high standards for environmental stewardship and this thorough study shows in excruciating detail how those standards will be met” while adding they will “call into serious question the suspect global modeling used to calculate greenhouse gas emissions.”

Opponents of the terminal lauded the conditions established in the nearly 4,000-page EIS, particularly the responsibility placed on Millennium for overseas fossil fuel emissions.

“The review’s findings confirm what the public has said for over six years: This project has significant, unavoidable impacts — from toxic coal dust to greenhouse gas emissions to traffic delays,” Jan Hasselman, attorney for the Power Past Coal Coalition, said in a statement. “The bad news is the review falls short, relying on unproven mitigation. Now is the public’s chance to weigh in to say no to coal export in Washington.”

The release of the state and county review is just one part of the process. On a parallel track, the U.S. Army Corps of Engineers is in the final stages of its own environmental review of Millennium. Unlike its state counterparts, the federal EIS, which is expected to be released this summer, follows a more traditional review process that considers only site-specific impacts. The split between the various agencies has left some questioning the legality of the state’s review.

“This is largely uncharted territory from both a legal and policy standpoint, and one that could have a significant impact on similar analyses in Washington and other states,” wrote Ross Eisenberg, a vice president with the National Association of Manufacturers. “Manufacturers depend heavily on exports, and conditions placed on one exported product could cascade to other products as well. If those conditions get in the way of trade or unduly delay exports, it could also violate U.S. international treaty obligations under World Trade Organization (WTO) agreements.”

In a state where Boeing, Amazon, and Microsoft are among the three biggest corporate citizens, there is a question of what this precedent-setting provision might mean for other projects. The Washington Research Council wrote on the topic in 2014, warning that such expanded reviews, “could impact international trade and interstate commerce, as well as increase uncertainty for business and reduce the timeliness of the SEPA process. Ultimately, Washington’s competitiveness will suffer.”

It is “an unusual practice to say the least, and has had manufacturers concerned for a long time, given the potential precedent that could be set for all exports of manufactured goods,” added Eisenberg, whose organization represents thousands of manufacturers across the country.

While thankful the process was finally proceeding, many questioned the length of the review and the signal such a protracted, bureaucratic process sends to outside investors looking at Washington as a place to do business.

“Washington’s regulatory process has become longer and more uncertain, which sends the wrong message to investors,” said Kris Johnson, president of the Association of Washington Business. “We are glad to see the release of the draft EIS for Millennium, but remain concerned other companies will not be willing to tolerate the delays of Washington’s permitting system and will not bring the needed investment to our state.”

Larry Brown, the legislative and political director for the IAM & AW District Lodge 751 said, “It shouldn’t have taken four years to do an environmental review on a site that’s been used for industry since the 1940’s. That’s a long time for families to wait for work. We need jobs now.”

After construction, Millennium will support 300 direct and indirect full-time, family-wage jobs and contribute millions in new revenue to county and state coffers. The project would also be a significant private investment in the state’s infrastructure which is essential given the state reliance on trade to drive economic growth.

“The Millennium project will bring much-needed, family-wage jobs to the people of southwest Washington,” said Lee Newgent, executive secretary of the Washington Building & Construction Trades Council. “This community needs the skilled labor and apprenticeship opportunities Millennium will provide for workers who want to live and raise their families in the Longview area.”

Millennium would also be a significant private investment in the state’s infrastructure which is essential to all industries – not just fossil fuels – given the state reliance on trade to drive its economy.

“Washington’s farmers rely on port and rail infrastructure to get their products to markets around the world.  Investment in infrastructure to carry all goods—whether it is wheat and potatoes or coal and airplanes—is crucial to our state’s overall trade picture,” said John Stuhlmiller, the CEO of the Washington Farm Bureau. “Farmers and growers understand the more opportunity Washington has to export, the greater the willingness there will be to invest in the infrastructure to support these exports.  For this reason, we look forward to voicing our support for Millennium Bulk Terminal’s expansion and the investment in added export infrastructure it will promote.”

With the release of the draft EIS, the community now has 45 days to submit comments and feedback on the proposal, or give testimony in person at one of three hearings slated for Longview, Pasco, and Spokane at the end of the month.

“The purpose of a Draft Environmental Impact Statement is to assure just such a hard look,” said Millennium’s Chapman. “The complete absence of significant adverse impacts to the natural environment in the project area is a most significant finding. It reflects what we have said consistently about redeveloping a brownfield site using a world-class terminal design on the right site.”