Ecology on Hot Seat About Coal-Port Analysis — Business Calls it Bizarre, Worrisome

Richards Bay coal terminal in South Africa.

Richards Bay coal terminal in South Africa offers an example of a coal-port shipping facility like those envisioned for Washington state.

OLYMPIA, Sept. 3.—Ever since the state Department of Ecology announced a month ago that it would measure a coal-port proposal near Bellingham against an unprecedented yardstick – air pollution on the other side of the world – critics have been wondering if the state’s environmental review process will have even a distant relationship with fairness.

Now a letter from Ecology to state Sen. Doug Ericksen, R-Ferndale, seems to confirm the worst of their fears. Nowhere does it mention that the state pollution analysis plans to ask a fundamental logical question – “compared to what?” And it asserts that state regulators have the right to determine which products can be shipped from the state of Washington whenever they believe the environmental impact will be “significant” – an expansion of authority some lawmakers and business figures see as a frightful principle that could be applied to every other major enterprise in the Evergreen State, from port facilities to agriculture, crude-oil shipments by rail, and the manufacture of trucks and airplanes.

What the new Ecology letter does is to clarify the agency’s position, but in a way that makes critics shudder. The state Public Ports Association says it ought to worry business throughout Washington state. Don Brunell, president of the Association of Washington Business, says Ecology appears to be using state environmental regulations to establish control over interstate commerce – something that would be prohibited by the U.S. Constitution if it was done in a straightforward way. “It is wide-open and it is bizarre and it is like nothing I have seen before,” he says. “It is precedent-setting.”

Ecology’s decision has sent shock waves through business for the last month, even as it has been cheered by green groups and Seattle-centric interests as a statement against the use of fossil fuels. Two major coal shipping terminals are on the drawing boards, near Bellingham at Cherry Point and at the Port of Longview, to serve the burgeoning appetite of the Chinese market for American coal. Environmental groups have made the two ports their focus in a larger campaign to block transportation and thus the use of fossil fuels – not just coal but crude oil and natural gas – all in the name of preventing global warming.

The agency maintains it has the right to inject big-picture political concerns into what ordinarily would be a technical review of local environmental issues, and that it can frame its criteria as it chooses — even if it means no developer can possibly address its concerns. “They came back saying they can do whatever they want, the Legislature has no authority, and they will continue to operate in that fashion,” Ericksen says. “For the Department of Ecology and the governor’s office to pick and choose which industry groups and which permits shall receive greater scrutiny is going to have a chilling impact on job creation in Washington state.”

Where Does it Stop?

State Sen. Doug Ericksen, R-Ferndale, chairman of the Energy, Environment and Telecommunications Committee.

State Sen. Doug Ericksen, R-Ferndale, chairman of the Energy, Environment and Telecommunications Committee.

Ericksen posed a few pointed questions to Ecology with a letter Aug. 1, a day after the agency announced it would conduct its own review of the Cherry Point project under the state Environmental Policy Act. The state review, to be conducted over the course of the next two years, will be far broader than the more traditional federal environmental review being conducted by the U.S. Army Corps of Engineers. Ecology announced that the “scope” of its review would include the carbon-dioxide impact when coal shipped from Washington is burned in other nations. It also will analyze the impact of the coal trains carrying the coal from Montana and Wyoming, and the impact of the additional shipping on international waters. At the time, Ecology didn’t say exactly how it planned to go about it – or precisely what differentiates coal shipping from any other industrial enterprise in the state of Washington. But there are plenty who think Washington already has its conclusion in mind – given the fact that green-minded Gov. Jay Inslee is on record against the proposals, calling them the “largest decision we will be making as a state from a carbon-pollution standpoint, certainly during my lifetime.” With Oregon Gov. John Kitzhaber, Inslee has urged the Obama Administration to adopt a policy blocking coal exports from federal lands.

If a Washington-state regulatory agency can take what is essentially a political position with what is supposed to be a technical review, Ericksen wonders where it will stop. “I specifically asked about Boeing, I specifically asked about Paccar — those are manufacturers where their products are used outside the state of Washington and they emit carbon. That would have to do with the end use of those products. So my question was on their permitting process for new Boeing airplane plants. Are they going to take into account carbon mitigation for a 777 or a 787 that is flying between Warsaw and Moscow? And they came back and said they can. It is very troubling.”

No Guiding Rule

Maia Bellon, director of the state Department of Ecology.

Maia Bellon, director of the state Department of Ecology.

In the letter dated Aug. 22, Ecology director Maia Bellon says the agency’s goal is to oversee a “fair, objective and rigorous environmental review” of the Cherry Point project, also known as the Gateway Pacific Terminal. Scoping decisions regarding the Millennium project at Longview are still to come. State law requires lead agencies – in the case of Cherry Point, the Department of Ecology – to prepare an environmental impact statement to assess “probable, significant, adverse environmental impacts of proposed actions.” And it is up to the agency conducting the review to decide what it wants to study. In this case, the agency was flooded with public comment – much of it generated by environmental groups and their supporters. Bellon notes that state law does not restrict lead agencies to considering issues that occur within their jurisdictions.

It might be noted that most SEPA reviews are done by local agencies rather than on the state level. But with a statewide agency in charge of this one, Ecology maintains the same principle applies – nothing in state law says the review has to be confined to impacts within the state of Washington. So the review can be global in scope. “Washington is experiencing impacts from climate change, ocean acidification and toxic air pollution,” she says. “Ecology understands climate and ocean acidification science as telling us that greenhouse gas emissions that occur across the globe have the potential to contribute to global atmospheric temperature increases that are associated with impacts occurring here in Washington.”

The key point is that the decision is up to the agency involved, she writes. “There is no ‘rule’ or ‘standard’ that leads to an identical scope of review for different projects. Consequently, when Ecology conducts an EIS under SEPA, we must do so on a case-by-case basis.”

So what’s to keep Ecology from applying the same standard to Boeing or any other manufacturer? Bellon notes that Boeing hasn’t decided where it will build new aircraft plants, but should it choose to locate in Washington state, odds are the carbon impact would be judged non-significant, as the next generation of airliners is expected to be more efficient than earlier designs. She points out that Ecology went the more traditional route when determining the scope of review for two crude-oil rail transportation projects in Grays Harbor County. She argues that Ecology isn’t applying a new standard to the coal terminals, but rather one that has been permitted under state law since the 1980s.

The ‘Compared to What?’ Problem

Don Brunell, president of the Association of Washington Business.

Don Brunell, president of the Association of Washington Business.

That’s absurd, says AWB’s Brunell — it was never supposed to be like this. Brunell was intimately involved in the debate over SEPA when he represented Crown Zellerbach in the early 1980s. SEPA was intended to provide a clear set of rules for environmental evaluations that emphasized technical issues and downplayed the politics. “I think if you leave questions open-ended, then the interpretation becomes open-ended,” he says. “To me it leaves it wide-open for them to measure whatever they want.”

That’s a big question where coal is concerned. The letter, in what it doesn’t say, obliquely raises a question about what exactly Ecology intends to measure. It points out that the emissions from 48 million tons of coal would exceed “all current greenhouse gas pollution produced in Washington combined, on an annual basis” – but one might wonder, compared to what? Advocates for the coal terminals argue that the Chinese market is so hungry for coal that the construction of Washington ports will make no difference in whether American coal reaches Asia. It might be shipped from ports on the Gulf Coast, from California, from British Columbia or elsewhere. In that case, the air-pollution impact becomes a wash.

Or one might consider the argument raised by Stanford University economist Frank Wolak – that the more coal exported that is exported from the United States, the better it will be for the global environment – because if exports of American coal are blocked, China and other Asian markets will simply burn dirtier coal from other countries. “Perhaps counterintuitively, the United States selling coal to China, and Asia generally, will reduce greenhouse gas emissions globally,” Wolak told the Stanford Report earlier this year.

It is unclear whether the Ecology analysis will consider basic logical arguments like those. The firmest thing that might be said is that right now the agency hasn’t decided. Washington State Wire posed the question to Ecology spokesman Josh Baldi. “We’re at the early stages of working with our consultant to fully define how CO2 emissions will be assessed,” he says. “At this preliminary stage of analysis, we anticipate assessing scenarios like you describe. Our analysis will be framed by those impacts that are foreseeable, as opposed to those that are speculative.”

Trouble is, the “compared to what?” question might easily be dismissed as speculative. In the letter to Ericksen, Bellon ascribes certainty to just one point. Where Cherry Point is concerned, she writes, “there is no speculation as to the end use of the exported coal.”

A Sweeping Precedent

Eric Johnson of the Washington Public Ports Association says Ecology’s decision is a big concern for any commodity or business that faces political opposition. Take crude-oil shipments from Midwestern oil fields where hydraulic fracturing is used – opposition to “fracking” is another major cause for environmental groups. Johnson wonders if the state will weigh in on that issue as well.

“We have been staying out of the coal debate because it isn’t our cargo, but we are watching this review very carefully because of the precedent that it creates for our other cargoes. The state is expanding its review to both the transportation and the use of cargo outside of the state. This policy could have big consequences for a trade-dependent state like ours. Ecology says don’t worry, it is just for coal, but they can’t control that. These coal terminals will have plenty of permit issues and the state didn’t need to open up SEPA to activities that don’t even occur in this state. Anyone who moves or relies on cargo should take note of this. It is potentially very bad for trade.”

Ericksen says the lack of a clear guiding principle for Ecology’s environmental reviews ought to be a big worry for the state. If the agency wants to assume broad powers, he says it ought to ask the Legislature for permission – not that he expects it to. And while you can count on legislation next session, odds are it will be defeated in the more sympathetic Democrat-controlled House. Result is that the coal-port decision sets a precedent that gives the governor the right to decide what sort of business is done in the state. Ericksen says that ought to make anyone gulp.

“This is what allows agencies to run amuck, this gridlock in the legislative process,” he says. “It is not about coal, it is not about the Gateway Pacific Terminal, it is about a state agency that believes that they are able to go out and make subjective decisions based on partisan objectives, and that is very troubling.

“While they say today it is not their intent to take into account CO2 in airplanes or big-rig trucks or other things that we export, nothing says they can’t change their mind tomorrow if they get some pressure from a special interest group.”