State Officials From Coal Country Tell Washington Regulators to Watch Their Step on Coal-Port Permits

Montana Attorney General Tim Fox.

Montana Attorney General Tim Fox.

OLYMPIA, Nov. 21.—State officials from coal country are telling Washington regulators they need to watch their step. As a public-comment period finally ends on a Longview coal-terminal project, governors and attorneys general from Montana, North Dakota and Wyoming are putting Washington state on notice that it better not try to block coal shipments to make a not-very-effective statement against global warming.

For one thing, they say it won’t make a whit of difference in the global climate. And for another, they say it is a violation of federal constitutional prohibitions that prevent states from interfering in interstate commerce and usurping federal authority to regulate international trade. You get the idea a legal challenge could be in the offing.

“We are concerned with the law,” Montana Attorney General Tim Fox told Washington State Wire in an interview Wednesday. “We are not concerned with the science or politics of these things. Others can debate. But we just want to make it clear that Montana and North Dakota and Wyoming and every other state that has an interest in shipping commodities to an international market have a concern that interstate commerce not be unconstitutionally interfered with.”

Fox and fellow Attorney General Wayne Stenehjem of North Dakota are among the crowd that offered their two cents on the Longview project, out of an astounding 195,000 public comments that have been offered on the proposed Millennium Bulk Terminal project. Wyoming Gov. Matthew Mead sent a separate letter of his own. But let’s just say that the two letters the state officials mailed to Olympia carry a tad bit more weight than most – they are challenging the legal authority of Washington-state regulators to use the environmental-impact statement process to prevent coal shipments from this state’s waters. And while they don’t come quite out and say it, they are hinting that if the state Department of Ecology jiggers the permitting process in a way that allows Washington to reject a shipping terminal of national significance, an interstate court battle could ensue.

In an unprecedented move last summer, the state Department of Ecology opted to expand the scope of an environmental review of a similar coal-terminal project at Cherry Point near Bellingham. Both terminals aim to serve the fast-rising demand for coal in Far Eastern markets, particularly in China. But regulators in this state appeared to take the side of a popular environmental cause that has strong support in the liberal cities of the coast and particularly in the green-minded administration of Democratic Gov. Jay Inslee. Ecology announced it would review a broad range of issues that go far beyond the immediate environmental impacts of the port project itself, in a way no project developer can reasonably be expected to resolve. They include the impact of coal-train traffic from the Midwest to Washington, the impact of shipping in international waters, and the impact of coal-burning on the other side of the world. The whole thing is improper, Fox says, and the coal-country states aren’t going to take it lying down. As the state of Washington prepares to make a similar decision regarding the Longview project, Fox and the other state officials say some things just aren’t Washington’s to judge. And it better not try it.

“My job as attorney general is to make sure that Montana’s interests are protected,” he said. “And we hope that cooler minds will prevail here.”

McKenna Represents Two States

The $643 million Millennium Bulk Terminal would occupy a former Reynolds smelter located at the Port of Longview. When fully developed, the port would be capable of shipping 44 million metric tons of coal annually; other portions of the site might be used for agricultural and other bulk commodities.

The $643 million Millennium Bulk Terminal would occupy a former Reynolds smelter located at the Port of Longview. When fully developed, the port would be capable of shipping 44 million metric tons of coal annually; other portions of the site might be used for agricultural and other bulk commodities.

Already Washington’s tactic has caused a split between the feds and the state. The U.S. Army Corps of Engineers was planning to review the two projects jointly with the Department of Ecology. But in September, the Corps announced that it would go it alone and conduct its own environmental review – the state was on its own. And the comments from the three coal-country states might be taken as an indication that the feds aren’t the only ones who think Washington is on shaky legal footing.

Certainly Washington has the right to assess the local environmental impacts of any project that is proposed within state borders, Fox said, but it has no business butting in on issues of national and international trade. “I respect the fact that the state of Washington needs to address the environmental, social and economic impacts locally of these types of projects, but to use such things as climate change, for instance, as a pretext for either delaying the project or unreasonably burdening it with conditions, or perhaps denying the project altogether – that is a problem, that in our view is unconstitutional and in fact is not something that they are equipped to do.”

The lengthy legal analysis contained in the letter from Montana and North Dakota was drafted by a figure familiar in Washington-state politics – none other than former Washington state Attorney General Rob McKenna, the Republican gubernatorial candidate who was narrowly defeated by Inslee in 2012. McKenna is now an attorney in private practice with the firm of Orrick, Herrington and Sutcliffe. The letter argues that the scoping decision on the proposed Gateway Pacific Terminal at Cherry Point oversteps not just the state’s legal authority but also its technical capabilities – that is, if it is geniunely interested in making a fair assessment in the first place. It demonstrates there are strong suspicions that Washington regulators are about to try the same thing with Longview.

Ecology Stacking the Deck

The letter makes two main points. The first is that the state of Washington seems to be stacking the deck with its decision to assess the impact of coal burning in China. At this point it appears it will examine the impact of exports from Washington, without considering what might happen if those exports do not take place. That’s hardly a fair way to look at things, the letter says. If China can obtain coal from other sources, construction of the terminals will make no difference to global pollution.

“This analysis is well beyond the expertise of Ecology, and is a topic that could consume an exorbitant amount of resources (including fossil fuels),” McKenna writes. “The issue is complicated because it requires an analysis of complex and vast global markets. Coal resources exist all over the globe, varying in quality, depth and cost. The sourcing of coal in China, for example, involves thousands of large and small mines, domestically and internationally, and is affected by imports from many countries. The evaluation of net impacts would require Ecology to analyze and predict the changes in this international market, including the internal markets in importing countries (like China), in response to the supply of coal from the U.S. This analysis also would need to address the quality of the coal actually used, since greenhouse gas emissions could actually go down as a result of substituting higher quality coal for lower quality sources.”

The argument concludes that such an inquiry is “well outside the capabilities of Ecology, not only because much of the information is not available, but because the analysis is so complex as to be essentially impossible.”

Indeed, Washington State Wire posed the same question to Ecology last September: Does it plan to assess any of these issues? Or will it simply conclude that if exported coal is burned in China, it would add to worldwide C02 pollution? The agency still hasn’t decided.

Constitutional Issues

The letter also argues that the state has a legitimate interest in assessing local environmental impacts. But it says those don’t allow a state to deny a permit based on the way a product might be used when it is shipped overseas, or give it the right to second-guess the adequacy of environmental regulation beyond its borders. The decision is “wholly discriminatory against out-of-state commerce,” McKenna writes, because the effect of any decision to restrict exports would affect other states. If coal wasn’t involved, the letter argues, the issue would never be raised. “No other product would be analyzed in a comparable fashion,” it says.

And that raises a constitutional issue, McKenna argues. The U.S. Constitution says only the federal government can regulate interstate and international commerce. “In the scoping decision for the Cherry Point project, Ecology essentially substituted its judgment for that of the U.S. government on both of these issues,” it says. But never has Congress given states the authority to do such a thing.

“The scope of the environmental review selected by Ecology in the Cherry Point project suggests that Ecology may decide to limit coal exports or even deny a permit for [the Millennium Bulk Terminal project] and the Cherry Point project on the basis that Ecology believes that exporting coal is a bad idea.”

The letter from Wyoming Gov. Matthew Mead, while not so heavy on the legal analysis, makes a similar point. It says the feds are proceeding properly by assessing the local impacts of the Millennium project, and it urges the state of Washington to do the same. “I am troubled by suggestions that this project and other proposed terminals may be analyzed on a magnified scope,” Mead writes. And he notes that even if Washington attempts to stop the project, it “will not change the course for those countries with respect to their growing need and use of coal.”

195,000 Comments Expected

At this point the Department of Ecology is going into sorting mode as it tries to assess the enormous volume of public comments received on the Longview project. Though it was widely reported this week that 163,000 comments were received, by mail, email and in public meetings, the final number actually will probably be higher. That’s because the postmark deadline was Nov. 18, and it appears that a bulk-mail campaign by opponents generated thousands of written comments in the final days. Ecology spokeswoman Linda Kent said the agency expects to count some 195,000 comments by the time all is said and done. It took seven months for Ecology to announce its scoping decision on Cherry Point, but the time frame on this decision is not clear.

And that raises an obvious question – how will those comments be weighted? Kent says it is the content that counts, not the number of times Ecology has gotten a particular letter. “It really only takes one,” she said. “It is not a popularity contest. The substance is really what is looked at.”

Eventually all those comments will be posted online, as they have been with the Cherry Point project. But you can definitely say some letters will count more than others. Though some 124,000 comments were received on Cherry Point, the number says more about the depth of feeling than it does about the number of arguments that were raised. Bob Watters of SSA Marine, developer of the Gateway Pacific Terminal project at Cherry Point, says his staff has gone back and looked at them all – and it has discovered a remarkable thing.

Some 72,000 of them were generated by a single company, Credo Mobile of San Francisco, which asked coal-port opponents to sign on to emails it had prepared. Opponents also conducted classes in comment-writing, and some eager participants wrote early and often. One submitted 72 comments, another 52, another 48. Coal-port advocates refrained from similar tactics, he said.

Sometimes you have to wonder if people step back and consider the implications of what they are saying, Watters says. Many comments focus on the impact of coal trains on local communities. But the same argument could be applied to any other commodity that is shipped by rail. “What’s really scary here is the collateral damage,” he said. “If you were looking at a new container terminal, you’d have to look at the impact of container traffic all the way to Chicago or New York. I’ve heard the new Boeing 777X will require five trains a day. Are they talking about looking at the impact of those trains? The answer is no.”