Oregon Regulators Deny Key Permit For Planned Columbia River Coal Terminal

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By Paul Shukovsky

Aug. 19 - The Oregon Department of State Lands has rejected a removal-fill permit for a proposed export terminal on the Columbia River that would be used to ship up to 8.8 million tons of coal a year to Asia.

The decision on Ambre Energy's Morrow Pacific project is a blow to the U.S. coal industry, which has been planning to increase Asian exports in the face of diminishing domestic demand. Morrow is the smallest of three active proposals for terminals in the Northwest that would be used to more than double the amount of U.S. coal exports from 2011 levels. No permitting decisions have been reached on the other two projects, which are both in the midst of environmental impacts statements.

Ambre Energy, an Australian company, proposes to build its Morrow Pacific transshipment terminal on Coyote Island at the Port of Morrow. BNSF Railway or Union Pacific Corp. would haul coal from mines on largely public lands in Colorado, Montana, Utah and Wyoming to Coyote Island. There it would be loaded onto covered barges for the 272-mile trip downriver to the Port of St. Helens for offloading onto ocean-going vessels.

The department said its Aug. 18 decision, which received more than 20,000 public comments, turned on the impacts of proposed dock construction on tribal fisheries.

Oregon Gov. John Kitzhaber (D) has opposed the projects and urged the Obama administration to do a broad policy assessment of exporting coal in light of climate change and other adverse impacts that accompany the transport and burning of the fossil fuel.

Ambre: A 'Political Decision.'

"We disagree with this political decision. We are evaluating our next steps and considering the full range of legal and permitting options," Ambre spokeswoman Liz Fuller told Bloomberg BNA Aug. 19 in an e-mail and a telephone interview.

She said the state removal/fill permit is required under the current project design but declined to comment further. Ambre has 21 days to request a hearing before an administrative law judge to contest the decision.

The export proposals have sparked the growth of grass-roots opposition, led by environmental groups, that include local and state elected leaders, Indian tribes, and neighbors who fear the impact of 1.5-mile-long trains cutting through their communities.

State lands department spokeswoman Julie Curtis told Bloomberg BNA Aug. 19 that of the 20,000 comments received during the comment period and the 8,000 to 10,000 received subsequently, "A substantial majority were against the project."

The state decision is also noteworthy because federal regulators at the U.S. Army Corps of Engineers-under the close supervision of the White House Council on Environmental Quality-so far have made decisions on the scope of environmental analysis that have been highly favorable to all three export proposals.

Despite calls by Kitzhaber and Washington Gov. Jay Inslee (D) to carefully scrutinize a range of effects from the combustion of U.S. coal in Asia, including its affects on climate, the corps has announced it will conduct narrow analyses looking only at local impacts. That decision was made after numerous White House meetings to discuss the topic.

'Fishery Is More Significant.'

State lands regulators wrote in their findings that the impacts to fishery were of primary concern.

"The preponderance of the evidence demonstrates that there is a small but important long-standing fishery at the project site, which is itself a social, economic and other benefit to the public," the regulators said. "The fishery is more significant than the public benefits that may be derived from the proposed fill. Therefore, the social, economic or other public benefits likely to result from the proposed fill or removal does not support issuance of the permit."

Kitzhaber applauded the decision in an Aug. 19 statement e-mailed from his office to Bloomberg BNA.

"I support this decision, which reflects both the historical and the present-day importance of healthy waterways and fisheries to Oregonians, including Native American tribes," he said. "Columbia River Tribes have fundamental rights to these fisheries, and projects that may interfere with these rights or affect important public resources are held to appropriately high standards."

The Army Corps of Engineers declined to conduct a full environmental impact statement on the Ambre project, instead conducting an environmental assessment, which is still under way. The Oregon Department of Environmental Quality in February issued three permits to the Morrow Pacific project; but also concluded that a Clean Water Act Section 401 water quality certification should be conducted, focusing on how much the terminal would affect turbidity in the river.

DEQ spokesman Greg Svelund told Bloomberg BNA Aug. 19 that the department is accepting public comments on the 401 certification until Sept. 24. A public hearing was held Aug. 12 and was attended by about 150 people with roughly two-thirds opposed to the project, Svelund said.

To contact the reporter on this story: Paul Shukovsky in Seattle at pshukovsky@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

Information on DEQ's Section 401 certification process is available at http://www.oregon.gov/DEQ/Pages/CoalExport.aspx

The findings of the Oregon Department of State Lands are at http://op.bna.com/env.nsf/r?Open=sbra-9n5t2g .

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