Permits invalidated for big Washington state methanol plant

By PHUONG LE Markets Associated Press

U.S. environmental groups opposed to the Pacific Northwest becoming an international fossil fuels gateway scored a major victory when a Washington state board invalidated two permits for a $2 billion project to manufacture methanol from natural gas and export it to China.

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Last week's decision by the state Shorelines Hearings Board is a setback for the project by Northwest Innovation Works on the Columbia River in the small city of Kalama.

The China-backed consortium wants to build the refinery that would produce up to 10,000 metric tons a day of methanol from natural gas piped in from North American sources. The methanol sent to China would be used to make plastics and other consumer goods.

The conservation groups Columbia Riverkeeper, Sierra Club and the Center for Biological Diversity had challenged local permits issued for the project, arguing that the environmental review wrongly concluded the project's greenhouse gas emissions would not be significant.

Washington's state Shorelines Hearings Board agreed, ruling Friday that officials from Cowlitz County and the Port of Kalama failed to fully analyze the impacts of greenhouse gas emissions from the project, including emissions from offsite sources.

The panel reversed two shoreline permits and sent the review back to the county and port for further analysis.

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"We are disappointed in the Shorelines Hearings Board's order because the EIS followed both the letter and intent of (the Department of) Ecology's guidance," Vee Godley, president of Northwest Innovation Works, said in an emailed statement Monday night.

He said the company looked forward to working with others "to do our part to provide greater certainty and positive impact for our state's economic and environmental goals."

The review did not factor in impacts of greenhouse gas emission beyond the facility site, including from producing and transporting natural gas, said Brett VandenHeuvel, executive director of Columbia Riverkeeper, which has fought other Northwest fossil fuel projects.

The groups said the project would add a new, enormous source of carbon pollution at a time when Washington state is trying to reduce its carbon footprint.

Janette Brimmer, an attorney for Earthjustice representing the groups, said a more accurate analysis will give a clear picture of the project's true carbon pollution and prompt measures to address those impacts.

Methanol, a wood alcohol, is used to make olefins, a component in everyday products such as eyeglasses, insulin pumps and fleece jackets. Developers have said the project would reduce global greenhouse gas emissions globally by producing methanol from natural gas rather than coal.

Environmental groups are also fighting a major crude-oil terminal proposed about 30 miles (48 kilometers) upstream from the proposed methanol plant.

The oil-by-rail terminal proposed by Vancouver Energy would handle about 360,000 barrels of crude oil a day.

Oil would arrive by train to be stored and then loaded onto tankers and ships bound for West Coast refineries. A state energy panel is reviewing the project and Washington Gov. Jay Inslee, a Democrat, has the final say over whether it will be built.

Northwest Innovation Works in April 2016 canceled plans to build a $3.4 billion methanol plant in Tacoma, Washington, following vocal opposition from people concerned about potential environmental and health impacts.

The company's methanol refinery operation in Kalama is estimated to produce more than 1 million metric tons of greenhouse gas emissions each year and increase the state's total emissions by 1 percent.

The company had argued that no state or federal agency has published rules concerning quantifying indirect greenhouse gas emissions in an environmental review and that the Department of Ecology's guidance was the only source about the issue.

The Ecology Department approved the permit for the project in June. But the agency determined the greenhouse gas emissions were significant and imposed conditions including requiring the facility to reduce its emissions by 1.7 percent each year, under the state's new rule to cap pollution.

Elaine Placido, director of building and planning for Cowlitz County, said Tuesday that the county is planning to discuss the next steps with the project developer.