Coal-export terminal backer sues state over permit denial

A company proposing to build a terminal in Washington state to export U.S. coal to Asia sued the state Tuesday, arguing regulators unfairly denied the project a key permit.

Millennium Bulk Terminals-Longview's lawsuit claims the state Department of Ecology violated federal and state laws when it denied the project a water quality certification last month.

The lawsuit filed in Cowlitz County Superior Court alleges the denial was based on "biased and prejudiced decision-making."

The company also appealed the decision to a state shoreline hearings board.

Millennium, owned by Utah-based Lighthouse Resources, has sought to build a facility along the Columbia River to handle up to 44 million tons of coal a year.

Trains would carry the coal from Montana, Wyoming and other states, which would be loaded onto ships headed to Asia. It would be one of the largest in North America.

"Today's filings demonstrate Ecology invented special rules in a unique and unprecedented process in the evaluation of Millennium's project," company CEO and president Bill Chapman told reporters in a call Tuesday.

Company officials described a protracted permitting process that has been unprecedented in scope. The company said it has invested about $15 million in the permitting process.

Ecology rejected a water quality permit last month, saying the proposed facility in Longview would have caused "significant and unavoidable harm" to the environment. The department cited effects to air quality, vehicle and vessel traffic, noise pollution and tribal resources, among others. The permit is one of 23 the project needs.

In denying the permit, Ecology director Maia Bellon said in a statement that "there are simply too many unavoidable and negative environmental effects for the project to move forward."

Ecology spokesman Dave Bennett said in a statement Tuesday that the agency stands by its decision to deny the permit and is prepared to defend it.

"The permit application and other documents did not provide reasonable assurance that the project would meet state water quality standards," he said.

Environmentalists, tribes and others have opposed the project — which could increase U.S. exports of coal by 40 percent — because of concerns about global warming, coal dust pollution and potential damage to fisheries on the river.

Businesses, some labor groups and other supporters say the project would create jobs, add tax revenue and boost the local economy. The governor of Wyoming, the nation's leading coal-producing state, previously traveled to the Pacific Northwest to pitch the importance of coal exports to the governors of Washington and Oregon.

Kristin Gaines, the company's vice president of environmental planning, said the federal Clean Water Act allows the state to deny water quality certification only on water quality grounds. Instead, she said Ecology used other alleged impacts to transportation.

Gaines said a thorough state and local environmental review found that the project's discharges to Washington's waters wouldn't adversely affect water quality, aquatic life or other designated uses and that any effects could be fully offset.

Another state agency earlier this year also denied the project an aquatic lands sublease. Millennium has appealed that decision and a Cowlitz County judge is scheduled to hear arguments Friday.