Port oil project in limbo as Contanda Terminals ponders next steps

Despite a state Supreme Court ruling earlier this month that put Contanda Terminals’ Port of Grays Harbor expansion project on hold, the company is confident it can meet the additional requirements created by the ruling and continues to pursue a shorelines permit from the City of Hoquiam.

“While Contanda disagrees with the court’s interpretation of the Ocean Resources Management Act, we are working closely with the City of Hoquiam to demonstrate how our terminal expansion project satisfies the Ocean Resources Management Act conditions so we can begin construction of this project as soon as possible,” said G.R. “Jerry” Cardillo, president and chief executive officer of Contanda Terminals.

The court case centered on whether Contanda’s expansion project – which would include an area to receive, store and ship crude oil and enable its Port of Grays Harbor facility to receive up to 17.8 million barrels of oil per year and add 1 million barrels of storage capacity for crude oil – fell under the umbrella of the Ocean Resources Management Act. The state Supreme Court said it did, which suggested the project would face much more strict environmental scrutiny than it would under the city of Hoquiam’s shorelines regulations.

“It is our understanding that the environmental and mitigation requirements of the Ocean Resources Management Act are covered by the environmental impact statement already completed, and we are in the process of demonstrating how our project meets the additional requirements,” said Cardillo. “We look forward to building and operating this project safely, and to providing much-needed jobs, tax revenue and economic activity to Grays Harbor.”

Kristin Boyles, an attorney with EarthJustice, which represented the Quinault Indian Nation in the State Supreme Court case, said she does not believe the project can survive the additional environmental scrutiny of the Ocean Resources Management Act.

“It is correct that the Department of Ecology shorelines regulations have the provisions (of the Ocean Resources Management Act) in them, and Hoquiam’s do, too,” she said. “The difference here is that until the court’s decision, Hoquiam and Ecology said those ocean uses regulations didn’t apply to this project. Now they have to look under all that criteria.”

The initial interpretation of the Ocean Resources Management Act fell to the Department of Ecology after it was signed into law in 1989.

“When the Ocean Resources Management Act was passed, Ecology was required to update shorelines regulations and provide some regulations for local governments on what to do to incorporate this new law in their shorelines permit processes,” said Jennifer Hennessey with Ecology’s Shorelines Management Program. “Many cities did that on the coast, so then they are responsible to study a project that needs a shoreline permit not just under their shorelines program, but those additional regulations of the Ocean Resources Management Act.”

Ecology’s Paula Ehlers, who works in the office of Shorelands and Environmental Assistance, explained the purpose of the environmental impact statement regarding the project.

“The environmental impact statement process is not a permit; rather it is a compilation of a lot of information about the potential impacts of a proposal, and its purpose is (so) a permit decision maker like (Hoquiam City Administrator) Brian Shay can use it to determine whether or not a permit can be issued.”

Will the environmental impact statement need to be redone? “In our opinion, no, because the final environmental impact statement was written under the State Environmental Policy Act, which is a completely separate law (from the Ocean Resources Management Act) that we have complied with,” said Ehlers.

Since being advised by Shay that the city of Hoquiam will not consider the company’s shorelines permit until they can show a clear, workable plan that will allow them to proceed with the project, Contanda has been going through the rules and regulations and is working on formulating that plan. It’s a complicated process, but one Contanda seems willing to take on.

As for the more far-reaching implications of the court decision regarding this particular project, those are unclear and remain to be seen.

“For the existing Contanda project the ruling means they are going to have to do a new review of the permit application to make sure it meets all of the Ocean Resources Management Act’s more protective criteria,” said Boyles. “For a new terminal project, (the project managers) would, at the outset, have to be thinking, ‘can we meet these criteria?’ ”