Coal Terminal Developer Sues Washington State

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By MarEx 2018-01-03 16:30:04

On Wednesday, the developer of a proposed coal export terminal in Longview, Washington filed a constitutional lawsuit against the state for denying a key water quality permit. The firm - Lighthouse Resources, which owns two Powder River Basin coal mines - asserts that Washington State violated the Commerce Clause by improperly rejecting its permit application. That rejection effectively blocked Lighthouse's plans to expand its terminal on the Columbia River to accomodate two bulkers per day and 44 million tonnes of coal per year. 

Lighthouse has already appealed the department's decision and is pursuing a lawsuit on procedural grounds in state courts. In the new federal suit, though, the firm asserts that state officials violated not just their own procedures, but the Constitution as well.

The Constitution's Commerce Clause prohibits individual states from regulating interstate and international trade by reserving these powers to Congress. Under the logic of Lighthouse's suit, Washington's rejection of the Millenium Bulk water quality permit constitutes an "embargo on new coal exports" and discriminates against "Lighthouse's efforts to transport into Washington coal that is being mined in . . . other western states." As the state regulatory action affects proposed international and interstate trade, Lighthouse argues, the action is unconstitutional.

“It’s no secret that Washington state officials are philosophically opposed to coal,” said Everett King, President and CEO of Lighthouse Resources in a statement Wednesday. “But that does not give them legal authority to discriminate against this project and block foreign trade and interstate commerce.”

In an earlier response, the state's Department of Ecology asserted that it turned down the water quality application because of the proposal's local environmental impact. “The project would have resulted in unavoidable and adverse impacts to local air quality, vehicle traffic, vessel traffic, rail capacity, rail safety, noise pollution, social and community resources, cultural resources, and tribal resources. These impacts cannot be mitigated,” the department wrote. 

Washington review panel votes against oil-by-rail terminal

On December 19, the Washington Energy Facility Site Evaluation Council (EFSEC) released its final, negative recommendation for the proposed Tesoro-Savage oil terminal in Vancouver, Washington. The panel unanimously opposed the project on the grounds that the risk it poses to "life, safety, property and the environment . . . is just too high."

If built, the controversial facility would be the largest rail-to-tanker terminal for crude oil in the United States, handling up to four unit trains of oil per day. The trains would pass through the protected Columbia River Gorge from inland production areas; a 16-car derailment, explosion and spill at Mosier, Oregon last year increased local oppositon to the terminal plan. 

In its 100-page review, EFSEC concluded that the additional oil deliveries would bring no material benefits to consumers, given the adequacy of existing supplies, and it found that the risks were significant enough to outweigh any benefits to the public interest. After discounting all findings and procedural issues that were contested by the project's developer, the panel reached the same conclusion. Now that the review process is complete, Washington State Governor Jay Inslee will have the opportunity to veto the oil-by-rail proposal as early as January 9.