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Labor leaders in Southwest Washington await permit decision for $2.3 billion methanol plant 

Labor unions in Southwest Washington await a consequential decision from the Washington Department of Ecology concerning a project that could bring almost 1,434 new full-year jobs to the areas surrounding the Port of Kalama.

The project, a $2 billion methanol production facility at the Port of Kalama, has been subject to lengthy delays so that the facility’s design could be modified. The design has been modified several times since 2015 to comply with regulatory requirements and public input. Cost estimates for the project have risen as construction delays have continued on.

Ecology is expected to release its decision on a shoreline permit for the project by the end of this week.

Proposed by methanol producer Northwest Innovation Works (NWIW), the plant would turn Canadian fracked natural gas into methanol and export it to China to make plastics and other materials. Included in the project is a 3-mile pipeline for transporting natural gas.

The plant has drawn some opposition from environmentalists.

After initially backing the project, Gov. Inslee reversed course in May of 2019 after signing a bill banning fracking for oil and natural gas in Washington State, saying that he could not “in good conscience support continued construction of a liquefied natural gas plant in Tacoma or a methanol production facility in Kalama.”

Last month, Ecology released a Final Supplemental Environmental Impact Statement (FSSEIS) as part of the permitting process, finding that in-state emissions would be offset and that net global emissions would drop.

The lengthy review process carried out by Ecology has frustrated labor leaders eager to deliver a new source of economic vitality to Southwest Washington.  

It’s been a tough journey from a labor perspective. We’ve been dealing with permits, industry standards, and then the project is constantly evolving to fit the mold based on what the community wants,” said Adam Davis, business agent for the Plumbers and Steamfitters Local 26 union. “We don’t see that a whole lot in our industry, when someone is as open as Northwest Innovation Works is to the community.”

The sense of urgency among local labor leaders was heightened by a recent economic analysis, conducted by ECONorthwest, of the project’s impact on the twelve counties within a 90-minute drive of the facility – an area with a labor pool of almost 1.6 million workers.

Key Findings

  • Over the full three years of construction, the project will create 1,434 full-year equivalent jobs (FYEs). Of these, 1,121 FYEs will be construction workers including 256 pipefitters, 108 electrical workers, and 128 apprentices.
  • In April 2020 the twelve-county region has a labor force of almost 1.6 million and an unemployment rate of 14.2 percent. In Cowlitz County the unemployment rate is 15.7 percent.
  • During construction, $728 million would be spent on local labor, goods, fees, sales taxes, and services. Net of sales taxes, local spending will be about $682.9 million, affecting over $1.2 billion in economic output in the twelve-county region through the indirect impacts (spending by businesses and governments) and induced impacts (spending by persons).
  • NWIW will employ 192 full-time workers, including executive and administrative staff, at its plant. Payroll, which includes all benefits, taxes, wages, salaries, and other similar expenses, will be about $21 million per year.
  • The average job would see $109,000 in wages and benefits. ECONorthwest estimates wages and salaries would average $72,338.3 
  • In total, 994 jobs per year are linked to the KMMEF operations. This total includes the 192 at the plant itself, indirect jobs from vessel calls, and all of the indirect and induced jobs elsewhere in the economy of the twelve-county region.
  • NWIW has committed to invest annually in carbon mitigation projects with an emphasis on opportunities located within Washington State and Southwest Washington. An assumed $15 million invested in an average Washington remediation project would have the effect of supporting 131 jobs, $8.7 million in labor income, and $25.2 million in total economic output in the State of Washington.

Anticipating a three year construction process, NWIW plans on starting in late 2021 or early 2022 depending on the ongoing permit approval process.

Mike Bridges, a third generation electrician who grew up in Kelso and has worked in Kalama for most of his career, says that the aspersions cast by some environmentalists do not consider the connections workers have with their communities.

We recreate, fish, hunt and do all of that stuff around here. We consider ourselves the environmentalists and the protectors of this region. So we do take a bit of offence when people from outside come in and tell us that all we care about is jobs.” 

Bridges is now president of the Longview/Kelso Building and Construction Trades Council. He feels confident that this project will create a roadmap for driving economic development while remaining environmentally responsible.

It’s not just this project. When and if we get the permits to build this thing, it shows a pathway forward for other folks to how to do business in Southwest Washington. To be able to build a facility here and do it better than somewhere where the regulations aren’t as strong as they are here on the west coast. That’s something we’ve been proud to be a part of since day one.”

The Building Trades Unions have aligned with the BlueGreen Alliance in Washington – a coalition of  labor, environmental, and community organizations working  “to advance shared prosperity, sustainability, good jobs, and healthy communities.”

At her confirmation hearing in February 2020, Ecology Director Laura Watson spoke about a common desire for economic development and environmental responsibility.

At the heart of what we do are our relationships …. I believe that fundamentally, we all want the same things. We all want a thriving economy and we all want a thriving environment. And I think we want an environment that does more than just exist alongside our economy, but an environment that supports and enhances our strong economy. I think the simple translation here is that we all want is quality of life,” said Watson.

Based on an economic analysis that “expects and assumes all the workers at the plant in a typical operating year would be local residents,” labor leaders believe the scale of the projects presents an opportunity for the state to deliver needed opportunities for residents of undeveloped counties.   

I support economic development opportunities in all regions of our state. It’s very important that we not have ‘haves’ and ‘have nots’ among the counties in our state,” continued Watson at her confirmation hearing.

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