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County Council Moves to Protect Cherry Point: What's next?

posted Apr 9, 2019, 10:32 AM by Simon Bakke   [ updated Apr 9, 2019, 10:33 AM ]
 By Eddy Ury, Clean Energy Program Manager. Originally published in Whatcom Watch, February 2019. 

Over the last decade, communities across the Pacific Northwest have risen up against a series of giant proposals to expand fossil fuel ports, shipments and pipelines, stopping them time and again. Now unable to build new terminals, oil companies are seeking to expand capacity to ship oil through existing ports, and Cherry Point is a prime target.

A confluence of factors makes the Cherry Point industrial zone the targeted route for Canada’s tar sands and fracked gas to be transferred from pipelines and trains onto outbound tankers. Before Whatcom County enacted a temporary permit moratorium in August 2016, there was little standing in the way of existing terminals re-configuring to ship more crude oil, tar sands and fracked gas overseas.

Now, the County Council is reviewing a newly drafted land-use ordinance to restrict permitting for fossil fuel facilities in order to protect public health and our environment from destructive projects.

This article outlines why this action is so critical for our communities and environment, the critical role local government plays, and how the David and Goliath battles of the last decade have led us to this historic opportunity to protect our region and beyond.

Local Risks and Impacts

Our region already bears extensive impacts from hazardous fossil fuel shipments, and we’re facing even greater risks as pressure mounts to export crude oil and gas through northwest Washington. Indeed, most of the petroleum consumed in the greater Pacific Northwest region passes through Whatcom and Skagit counties. Canadian fracked gas and tar sands cross the border through pipeline junctions at Sumas, flowing south across farmland, rivers, and towns. Two oil refineries and an aluminum smelter pump pollution into the air and water, directly adjacent to the Cherry Point Aquatic Reserve and the Lummi Nation Reservation.

The local concentration of fossil fuel infrastructure impacts our communities and our environment. Local residents face the constant threat of pipeline leaks in our rivers and forests, oil spills off our shores, and trains exploding in our towns. We’ve seen the costs when the Olympic Pipeline erupted in 1999, setting Whatcom Creek on fire and killing three boys. Between 2013 and 2016, 11 oil trains exploded across the continent, including trains headed for Washington. Our communities bear the burden of dealing with these risks.

The region’s ecosystems suffer impacts and risks from fossil fuel facilities as well. Populations of Chinook salmon, and Pacific herring — two keystone species for the marine food chain — are now threatened or endangered. Fisheries have declined severely over the past half-century, and may be facing total collapse. The 74 surviving southern resident orcas are on the brink of extinction. Their survival is further threatened by relentless proposals to increase shipments of oil, tar sands, fracked gas and coal through the Salish Sea. Every ship navigating around the San Juan Islands increases the risk of a spill, and one spill could spell the end for the southern resident orcas.

Last Line of Defense

Local governments are the only lawful decision-makers standing in the way of expansions that bring even more trains and tankers, and they are responsible for limiting the risks, hazards, pollution and harm these projects cause. Yet under current statute, expansions of existing facilities can be permitted with minimal review, without recognition of their impacts. A series of small upgrades can add up to a big change, known as “piecemealing.”

The need for regulatory reforms to the permitting process is evident and increasingly urgent. That’s why the Whatcom County Council is undergoing a public review process for an ordinance that would make permitting for fossil fuel projects (including new permits at existing facilities) far more restrictive — requiring greater scrutiny, more public review, protective conditions and standards for mitigations, with outright prohibitions on coal facilities and new piers.

Under the proposed ordinance, significant upgrades or changes at the refineries would require conditional use permits and Environmental Impact Statements (EIS) that address cumulative impacts on climate, Salish Sea ecosystems and fisheries. Projects that can’t meet the conditions will be rejected.

This law is vehemently opposed by fossil fuel interests including BP, Phillips 66, Petrogas, the Western States Petroleum Association, the Whatcom Business Alliance, and other organizations. Nonetheless, with demonstrated public support, the County Council majority may pass a revised version of this ordinance in 2019. Over three years of public process have taken place to get these policies right — to be enforceable, effective, and legally defensible.

To understand how this bold proposal came about, one must look at key events over the last decade.

Coal Ports Stalled, Oil Trains Took Off

The Gateway Pacific Terminal (GPT), originally permitted for development at Cherry Point in 1999 as a bulk shipping terminal and never built, was re-cast in 2010 as the largest coal export terminal ever proposed in North America, to export up to 48 million tons per year of thermal coal brought by train from the Powder River Basin. The new version of GPT was required to apply for new permits in 2011, and the process of preparing an Environmental Impact Statement launched in 2012.

Whatcom County residents, and communities along the proposed coal train rail-route from Montana and Wyoming, rallied in record numbers to speak out, submitting 126,000 scoping comments calling for over a hundred unique impacts to be studied. Three years after scoping, the expansive Draft EIS was still not completed when federal permits were denied by the U.S. Army Corps of Engineers, upholding Lummi Nation’s treaty rights.

While attention focused on GPT in 2012, refineries quietly applied for permits to build rail terminals to bring in more volatile light shale oil from North Dakota’s fracking wells, as well as more tar sands bitumen (aka “heavy crude”), a dense and dirty substitute for crude oil that sinks in water. Crude oil “unit trains,” with over a hundred DOT-111 tank cars full of oil, first appeared in late 2011 and rapidly increased as fracked-oil production boomed, and, by 2013, were being received at terminals across the continent. The National Transportation Safety Board warned in 2012 that these pressurized tank cars could easily puncture, catch fire, and explode in a derailment.

As predicted, from 2013 to 2016, we saw 11 oil trains explode across the continent, including an eruption in Lac Megantic, Quebec, that killed 47 people and leveled the downtown. A train bound for Washington exploded along the Columbia River in Mosier, Oregon, with a fire that burned for over 14 hours, causing evacuation of nearby cities and leaving them without running water for over a week. Another train, reportedly destined for Whatcom County, blew up in Montana. These explosions were a foreseeable impact of the oil-by-rail projects that the Whatcom County Planning Department permitted.

By the time the dangers became truly apparent in July 2013, four oil train terminals had already been built in Washington that year: at BP Cherry Point Refinery, and Phillips 66 Ferndale Refinery, Tesoro Anacortes Refinery, and at the U.S. Oil Refinery in Tacoma, bringing in a combined volume of roughly one million barrels of crude oil per week. Whatcom County had determined the refineries’ rail terminal projects to be non-significant, ignoring the risks from explosions and the cumulative impact of trains running daily, granting the permits with minimal review.

By granting permits for oil train terminals, Whatcom County is responsible for introducing significant risk to the safety of residents here, and in other communities all along the rail route through North Dakota, Montana, Idaho, Oregon, and Washington (including Seattle).

Communities Block Oil Train Terminals

No federal agency has acted to constrain the rapid escalation of oil-by-rail traffic this decade. However, counties and cities have.

The city of Vancouver, Washington, chose to require an Environmental Impact Statement on a proposed terminal to transfer oil from trains to barges on the Columbia River. The hearing examiner upheld the decision after an appeal by the terminal operator NuStar Energy, which then decided to cancel its application after an EIS was required.

A separate proposal from Tesoro Oil and Savage Industries to build the largest ever oil-train-to-barge transfer terminal was determined significant and sent to Washington State’s Energy Facility Site Evaluation Council (EFSEC) for review. In February 2018, EFSEC unanimously rejected the proposal because of its unavoidable, significant adverse impacts to public safety.

Shell Puget Sound Refinery applied to build a rail terminal and was initially determined non-significant by Skagit County. After an appeal, the hearing examiner ruled that the project was significant and required an EIS. The Draft EIS was released in October 2016, showing unavoidable, significant adverse impacts, and, in the same week, Shell announced they were withdrawing permit applications and cancelled the project. No oil terminal that required an EIS was built, because, when cumulative impacts were recognized and considered, the projects became untenable. Gaping Hole in Current Statues A gaping hole in our current statutes was revealed when Petrogas started exporting propane through one of the three marine terminals at Cherry Point in 2014.

Since 1964, the pier had been primarily used for importing aluminum ore and supplies for smelting at Intalco. Since 1975, it had also been used to import propane (aka Liquified Petroleum Gas or LPG) for local area consumption. Petrogas changed the use of the pier to primarily export LPG (propane or butane) brought by train from outside the state, which quadrupled LPG export volumes for the entire West Coast by 2016 — when they purchased the terminal outright from Alcoa Intalco Works.

The county did nothing to challenge this and required no specific permits for the change of use. The only restriction in place is a limit of 48 ships per year by terms of their aquatic lands lease from the state Department of Natural Resources (DNR), who approved the transfer of ownership from Intalco to Petrogas.

The fact that this change of use occurred with no public process highlighted a frightening vulnerability: if Petrogas could export propane with no permit required, there was also nothing to stop an existing oil terminal from loading outbound ships with tar sands bitumen brought through the Trans Mountain pipeline from Alberta.

Tar Sands Exports Via the Salish Sea

Tar sands strip mines of Alberta, Canada, are an extremely costly and destructive source of an unconventional fossil fuel called bitumen, tar or oil sands. The Athabasca tar sands strip mines cover an area roughly the size of Whatcom County from Bellingham Bay to Mount Baker where boreal forests have been clear-cut and earth stripped off to open vast pits of tar that is scraped out in layers. The mines have consumed and contaminated over a trillion gallons of water in the past decade, and have eradicated wildlife and resources from enormous areas of Chippewyan and Cree peoples’ traditional territory.

The mining and processing of the tar is so intensive that the ratio of energy produced is less than twice what is expended to yield it. Canada’s government has spent billions to subsidize it, and is hellbent on exploiting the reserves at all costs. But attempts to build new tar sands pipelines to the Pacific, Atlantic, and Gulf coasts have been stalled repeatedly.

For over a decade, First Nations and communities all around lower British Columbia have fought back against a proposal to double-track the existing Trans Mountain Pipeline route, so as to increase sevenfold the tar sands export shipments out of Burnaby, B.C., to over 400 tankers a year. Last year, permits were quashed in a Canadian federal court decision on a challenge brought by First Nations, who had not been properly consulted on the project. The court ordered that meaningful consultation must occur and that impacts to southern resident orcas from the increased tar sands vessel traffic would have to occur for permits to be re-issued.

Kinder Morgan, the Texas-based owner of Trans Mountain, had enough and sought to sell off the pipeline. Unable to find a willing buyer, the Trudeau government bought the existing pipeline and expansion project from Kinder Morgan for $4.5 billion, and vowed to pursue new permits for the expansion at taxpayer expense. Canada’s purchase included a 70-mile segment built in 1954 called the Puget Sound Pipeline, which runs through Whatcom to supply refineries at Cherry Point and March Point in Anacortes.

With the Keystone XL tar sands pipeline also stalled along with Trans Mountain, oil extractors are resorting to changing the use of existing transshipment facilities to expand their shipping capacity. Cherry Point has been cited in reports from government and industry as a prime alternative route to ship tar sands through.

Crude Oil Through Cherry Point

From 1975 to 2015, a federal ban on crude oil export ensured that oil extracted in the United States would be refined domestically. This protected refinery workers’ job security and union bargaining leverage with their employers, while preventing added tanker shipments that would occur from shipping crude to overseas refineries and sending back refined product.

At the close of 2015, the ban was lifted, opening the gates to export projects that would increase train and tanker traffic further, even as we continued to reduce our demand for oil locally and nationally. By then, networks of environmental groups, tribes, unions, community interest groups, elected officials and activists across the Pacific Northwest had united to fight off a line-up of proposed fossil fuel shipment expansions, including seven coal export proposals and several oil train terminals, none of which have been built. Not being able to build new terminals, oil companies would resort to routing more shipments for export through existing terminals, such as those operated by oil refineries at Cherry Point, March Point in Anacortes, and in Tacoma.

County Council Enacted Moratorium

In January 2016, the County Council began reviewing and taking public input on the Comprehensive Plan, which outlines policy goals to guide development regulations. Thousands of concerned community members flooded in with comments, petitions, and testimony supporting action to oppose dangerous fossil fuel expansions. Several public hearings that year were standing-room only, lasting for hours late into the night.

In May 2016, the Army Corps of Engineers denied federal permits for the Gateway Pacific Terminal, upholding Lummi Nation’s treaty-protected fishing rights. Finally, the Whatcom County Council was free to act without fear of compromising their position as a quasi-judicial permitting authority for the pending coal terminal. In June 2016, Councilmember Carl Weimer introduced amendments to the Cherry Point Urban Growth Area (UGA) to discourage expanded crude oil, gas and coal shipments through the Cherry Point Aquatic Reserve, while aiming to support refineries and retain existing industries.

British Petroleum (BP), the Western States Petroleum Association (WSPA), and the Whatcom Business Alliance (WBA) reacted strongly, threatening lawsuits and implying that BP could shut down their Cherry Point refinery and move overseas if regulations restricted their ability to expand crude oil shipments through their terminal.

Under great pressure, the council sent the amendments through a year-long review process. However, BP’s heavy-handed response heightened concerns that they would seek to expand crude oil and tar sands shipping. While policies were moving through the public process, BP would have been able to apply for permits and obtain vesting rights, exempting them from adhering to codes enacted after they applied.

The council was able to prevent this by enacting a moratorium that temporarily barred permits that would facilitate increased shipment of unrefined fossil fuels through the Cherry Point UGA, intended to be held in place until pending code revisions were finally adopted. First enacted in August 2016, the moratorium has been extended six times and is now in effect until August 12, 2019.

Weimer’s Comprehensive Plan amendments were finally adopted in May 2017. The county then contracted Cascadia Law Group to study and prepare a report on legal ways the county may choose to limit the negative impacts from increased crude oil, gas and coal shipments through Cherry Point. In February 2018, Cascadia Law Group presented a menu of recommendations on legally sound policy tools the county can use to address hazardous fossil fuel proposals.

In April 2018, the council passed a resolution, introduced by Councilmember Todd Donovan, directing county planning staff to draft an ordinance to implement some of Cascadia Law Group’s recommendations. After eight months of afternoon work sessions with the council and county staff, on January 15, 2019, the County Council majority voted to forward a draft ordinance to be reviewed by the Planning Commission. On January 29, they voted to extend the temporary moratorium for six more months while the draft ordinance moves through the final stages of review, public input, and revision.

The effect of the new draft ordinance is to require conditions for fossil fuel projects, ensure more stringent review of impacts, increase transparency, allow for more public input, require new permits when the facilities change uses, and ban coal outright. Here is an overview of what’s included:

Major Fossil Fuel Facilities
The ordinance primarily addresses “major fossil fuel facilities,” defined as: “Within the Heavy Impact Industrial (HII) District, Light Impact Industrial (LII) District, or Cherry Point Industrial (CP) District, stationary facilities for (a) the transshipment, storage, receipt, processing, or combustion of crude oil or natural gas; (b) the transshipment, storage, receipt, processing, or combustion of their liquid or gaseous products, whether refined, manufactured or the result of petrochemical processes, regardless of origin; and (c) the servicing, bunkering, lightering, or refueling of ships of any kind used in transportation of any of the above.” New or modified facilities are permitted as conditional uses and face scrutiny for review of their impacts.

Administering SEPA
The Washington State Environmental Policy Act grants broad authority to county and municipal governments to approve or reject project permit applications. However, those decisions can be challenged through regulatory appeals by a proponent that doesn’t get its way, or by public interest groups and individuals concerned about the impacts. In that case, the permitting agency (i.e. Whatcom County) must prove that they applied the law fairly according to the county code and state law.

The first step in the SEPA process, when an application is reviewed, is for the Whatcom County Planning Department to make a threshold determination. For upgrades or expansions of existing facilities in the Cherry Point industrial zone, typically county Planning and Development Services is the only government agency deciding permits. They decide if the impacts of the project are significant or non-significant. If a project (such as the Gateway Pacific Terminal) is determined significant, an Environmental Impact Statement (EIS) is required to inform decision-makers of the foreseeable impacts. Permits can be rejected based on significant, unmitigable adverse impacts identified in the EIS.

Enormous air and water pollution, extreme risks and hazards from induced train and tanker traffic, are seen as not significant by county officials, based on the perspective that the refineries have existed since before SEPA or any environmental laws were in place, so their cumulative impacts are grandfathered-in, therefore, incremental increases in impacts are not seen as significant.

In the county’s draft land-use ordinance, projects for all major fossil fuel facilities must be determined significant and require an EIS that assesses cumulative impacts from greenhouse gas pollution, vessel traffic, as well as local impacts. The definition of fossil fuel facilities is broad, but minor maintenance and upgrade work at existing sites can be exempted by obtaining a waiver. At large facilities, maintenance and upgrades are done almost constantly. The goal is to ensure transparency and accountability to prevent piecemealing, a series of minor changes adding up to a major change.

Revising Zoning Code
The state’s Growth Management Act allows the county to designate zones with restricted uses, such as residential, commercial, mixed-use, light impact industrial, or heavy impact industrial. The county zoning code applies to unincorporated areas of the county, but not within cities. Cherry Point UGA is the county’s Heavy Impact Industrial Zone, home to two oil refineries, an aluminum smelter, and a gas-fired power plant.

Within zoning code, the county can specify permitted uses and conditional uses. Permitted uses are approved by the planning department, although decisions can be contested before the county hearing examiner, a land-use adjudicator. A Conditional Use Permit (CUP) must undergo scrutiny by the hearing examiner automatically, must disclose more information, and are subject to approval under restrictive conditions. Unlike regular building permits, a conditional use permit can be revoked if its terms are violated.

The combination of requiring a CUP and EIS on a fossil fuel project will prevent piecemealing, increase transparency, and allow the county to require that a project does not increase pollution or threaten the safety of residents, or reject the project if it can’t meet standards.

Addressing Change of Use
Under existing rules, piecemeal upgrades can occur without substantive review of direct or indirect impacts, which can fundamentally alter the operations of the facility over time, while each project is looked at as an insignificant addition to an existing industry. The county has no discernible procedure or practice in place to address change of use, and as a result has allowed major developments to escape environmental review. The new land-use ordinance will require a Conditional Use Permit for new uses of existing facilities, triggering a public process and opportunity to say no if the new use presents significant adverse impacts.

Prohibiting Coal
The draft ordinance prohibits storage or transfer of bulk coal, as well as new piers, docks or wharves at Cherry Point. The impacts from coal are already well documented. Though an EIS was never completed on Gateway Pacific, a comparable coal terminal proposed at Longview, Washington, Millennium Bulk Terminals completed an EIS and was subsequently denied permits by Cowlitz County and Washington State Department of Ecology for its significant, adverse, unmitigable impacts. Now, Millennium is suing the state for denying permits, and lobbying the U.S. Congress to intervene. Whatcom County can avoid such a scenario from ever occurring again by banning coal outright now. Prohibitions on non-existing uses, such as coal storage and transfer, may be the least complicated action at hand, which legal precedent clearly supports.

Action Across the Pacific Northwest

Whatcom County is not the only local government grappling with these issues. Activists and elected officials in Anacortes and Skagit County, home to two more oil refineries at March Point, are resisting oil expansions and following Whatcom’s actions, as are refinery-adjacent communities in Richmond and Benicia, California.

The city of Portland, Oregon, enacted a ban on new fossil fuel terminals with a capacity greater than two million gallons and capped the size of existing terminals. Industry lawyers appealed, and the ordinance was ultimately upheld as constitutional and lawful by an Oregon Court of Appeals. Across the river from Portland, the City Council and Port Commission of Vancouver, Washington, are publicly discussing enacting similar laws to prohibit bulk fossil fuel terminals.

Tacoma, Washington, has imposed its own version of a moratorium on new fossil fuel facilities while they undergo a planning process for the tideflats area, home to an oil refinery, rail terminal and pier that Par Pacific Holdings, Inc. purchased from U.S. Oil & Refining Company in January, with stated plans to expand outbound crude oil shipments.

The King County Council is currently reviewing an ordinance that would effectively ban all new major fossil fuel infrastructure in King County, including expansion of existing gas pipelines.

Beyond the region, Baltimore, Maryland, has banned new or expanded crude oil terminals. South Portland, Maine, banned the bulk loading of crude oil onto tankers at their port. Like Portland, Oregon, these East Coast cities had to defend their laws against industry appeals, and both cities also prevailed in court.

Next Steps in Progress

At an upcoming town hall meeting, Whatcom County officials will take public input on the proposed land-use ordinance. The Whatcom County Planning Commission will review and revise the draft, then hold another public hearing before the council makes its final review. There will be a public hearing before the final vote to approve the ordinance, thus amending county code, making it law. The process is expected to be completed this spring, but could extend to July.

The County Council has shown resolute determination not to be bullied into submission by oil and gas industries. Despite intense pressure and blowback, the council has decided to proceed with review of this ordinance. This slow but steady progress could not happen without demonstrated support from our communities, calling on them to act and watching their steps. We’re in the final stretch: this year more than ever, Whatcom County residents need to show up and speak out.