Two companies want to export oil from the Harbor

Preliminary efforts by two different companies to begin exporting crude oil from the Port Grays Harbor have sparked initial opposition from the citizens group Friends of Grays Harbor and members of Citizens for a Clean Harbor, the group formed last spring to oppose a coal export terminal on the Harbor.

Members of both groups say they have numerous questions about an ongoing study of the Port’s Terminal 3 for a proposed crude oil rail-to-ship export facility.

They also want to know more about a similar proposal to export crude oil through the Port and Westway Terminals, which currently exports methanol from four tanks already at its site off Port Industrial Road. Westway already has applied for a permit with the City of Hoquiam as the lead agency, and the company said in its application that it hopes to begin exporting crude oil from rail to ship by November 2013.

A seven-point memo from FOGH’s Arthur “R.D.” Grunbaum said the group feared an oil export facility at Terminal 3 along with the Westway proposal would dramatically increase railroad traffic if permitted, and does not “take seriously the risk of spills or spill containment.”

Grunbaum also questioned what would happen in the event of a spill or accident, and noted the rail cars have to travel over a number of sensitive waterways with salmon habitat before they even get to the Harbor and the terminal in Hoquiam.

“It seemed as if they did not take seriously the risk of spills or spill containment and the devastation a spill would cause in the Harbor or along the rail route,” he said after a briefing with the development company eyeing Terminal 3. “There are 100 streams, tributary and river crossings between Chehalis and the Port property, 27 of which span major fish migration passages.”

Grunbaum notes that the official from US Development Group, who outlined the project for Port commissioners last week, indicated the trains would be 120 tanker cars long, with two trains each day.

“That means there will also be two empty trains exiting daily,” Grunbaum said.

TERMINAL 3 PROPOSAL

Kevin LaBorne, the company’s business and development manager, told Port Commissioners Nov. 13 that his company has been studying Terminal 3 since September and will likely decide on the site early next year. The company formed Grays Harbor Rail Terminal LLC and entered into an access agreement on Sept. 11 with the Port to “conduct certain feasibility studies” at the site for a “train/marine crude oil terminal.”

LaBorne outlined preliminary ideas for building the facility, including a storage yard and rail offloading area, and said the company expects to create 30 to 50 jobs on the rail side of the proposal and a number of other longshore and dock worker jobs to load the crude oil onto ships.

Most of the crude oil would be distributed to West Coast refineries, such as the five in Washington state — two in Ferndale in Whatcom County, two near Anacortes and one in Tacoma. Other refineries that would get the crude would be in California or Hawaii, and potentially refineries in Asia, LaBorne said.

LaBorne said the Houston-based parent company expects a two-year process before it would be ready to begin operations if the Grays Harbor site is permitted and approved and a lease agreement is reached with the Port.

INITIAL CONCERNS

Grunbaum acknowledged LaBorne met privately with some of those who might oppose the project, but he said he has more questions than answers after the meeting. FOGH’s stated goal is “to foster and promote the economic, biological and social uniqueness of a healthy Grays Harbor estuary.”

Grunbaum contends US Development “had not taken into consideration any issues that might occur as a result of a tsunami or subduction zone earthquake or sea level rise” as one potential threat to such an oil export facility.

Any crude oil spilled into the Harbor or ocean would sink and smother living organisms, Grunbaum said, and he believes the company must address the potential impact a spill would have on the coastal fishing, crabbing and shellfish industry. Another factor is the nearby Grays Harbor National Wildlife Refuge at Bowerman Basin, less than a mile from the terminal.

“They seemed to ignore that they were next to a hemispherically important wildlife refuge and that there is no ability for the Harbor to boom or clean up an oil spill,” Grunbaum wrote.

“We are very concerned and we believe that there are other rail and Port projects that will not threaten all that is vital to other livelihoods and quality of life in the Harbor,” he added.

Grunbaum said he asked the company and the Port a number of questions, “and they just didn’t respond” during the private session.

Linda Orgel, another member at the session, said LaBorne was pleasant and seemed sincere.

“But I got the impression that they hadn’t thought about any of those things,” she said of the environmental concerns and potential spill and fisheries issues. “I don’t think they knew our area enough to know about the dependency we have on fishing and marine resources. … It really is monumental here.”

She noted that the previously abandoned study of the terminal as a potential site for a coal export facility led to the formation of a new group, Citizens for a Clean Harbor, which includes FOGH and Audubon Society members as well as a number of other concerned residents. That group remains actively interested in what’s happening at the terminal, Orgel said.

Arnie Martin of the Grays Harbor Audubon Society chapter also was at the meeting and came away with questions about the number of trains, the size of the holding tanks, and how such a facility could withstand a major earthquake or tsunami.

Martin said the storage tanks that would be built at the site would be massive to hold about 800,000 barrels and would have to be built on ground that is largely fill and subject to liquefaction in the event of a large subduction zone earthquake.

“I don’t think it’s possible to contain this thing,” Martin contends.

Grunbaum believes the company also will have to deal with treaty tribes with fishing rights on the coast and affected rivers.

“They have a whole different hurdle and review the company will need to go through” to get any sort of approval from the tribes, Grunbaum said.

“Please understand that we want this to be a prosperous Port and we want the rail cars to come,” Orgel said. “There just has to be some other product.”

Martin said an oil export facility is potentially more damaging than a coal export facility “in the extreme case.”

“We didn’t like the coal trains at (a proposed) one a day. Are we going to like the oil trains better at two a day? I don’t think so,” Martin said.

In a phone interview after his meeting with the citizen activists, LaBorne said he believed the permitting process would take up to two years.

“As we complete our feasibility study, we are basically framing what that process looks like and what we anticipate having to do from a permitting and land development standpoint,” LaBorne said when asked what issues the company expected to address. “As far as formal applications to various lead agencies, that process would start if we decide to go forward with the project and we are able to advance with the Port.”

PERMIT PROCESS

Westway Terminals Vice President of Operations and Engineering Robbie Johnson confirmed the company has submitted permit applications to the City of Hoquiam “to handle crude oil at our existing bulk liquid storage facility.”

“The crude will be received by rail and transferred into two new storage tanks,” he said. “From there, it will be loaded onto vessels or barges for transfer to refineries on the West Coast.”

The Westway permit request is to handle up to 9.6 million barrels of crude per year, which roughly equates to 128 trains per year, or one train every three days, Johnson said.

US Development likely would have to go through the City of Hoquiam, too, as the lead agency for a Washington State Environmental Policy Act (SEPA) permit. It also might be required to obtain state and federal permits in addition to city permits and environmental reviews, said Hoquiam City Administrator Brian Shay.

City Planner Alissa Thurman said the city has asked the state Department of Ecology for approval to move ahead with the Westway proposal, but has yet to hear back from the state so the SEPA process has not yet started. The proposal, dated Nov. 7, is to build an additional two tanks to store the crude oil, with a capacity of 8.4 million gallons. Westway plans to add 10 to 18 new employees if the proposal is approved.

Thurman noted the permit process will have several opportunities for public comment. She said the city has sent a letter to the company requesting additional information before it moves forward with the Westway application. For example, she was unsure how many train or rail cars loaded with oil would be destined for the terminal at any one time.

The SEPA process has a 14-day comment period and a Shorelines Permit would require a 30-day comment period after a public notice process, Thurman said. Also, a conditional use permit likely would be required because of the proposed height of the storage tanks. That would require a public hearing with a hearings examiner.

“The important thing to stress is that it’s not like this has been going on behind the scenes and then all of a sudden it’s being done,” Thurman said. “The public process is just starting and now is the time when public comment periods will be opening.”

THE PORT’S ROLE

Port Executive Director Gary Nelson said the Westway proposal would be for significantly lesser amounts of crude oil exports than US Development’s preliminary proposal. It also is something allowed under Westway’s current lease with the Port.

“We’ve said, ‘Yes, that’s what the terms of the lease are, but you are responsible for getting the permits,’ ” Nelson said of the Westway plan to begin crude exporting. The Port would have to sign off on any site improvements, he said.

Nelson said interest in the Grays Harbor Port as an export destintion for crude oil has been going on for about the past three years, with a lot more interest in the past year.

“The dilemma is to get it to the Pacific markets,” he said of the mostly domestically produced oil.

Concerning the environmental questions raised by Grunbaum and others, Nelson said it was still too early in the process to definitively address all the issues. In addition to any public comment provided in the permit process, he said the Port would hold another meeting to gather information, likely in December.

“They want answers that probably aren’t answerable just yet because (US Development) has yet to zero in on a design,” Nelson said. “That’s why were hoping to provide another opportunity next month to have a sit-down and ask questions.”