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Oil terminal case: Tribe and environmentalists win major victory in state Supreme Court

By Dan Hammock Daily World (Aberdeen, Wash.)

A State Supreme Court ruling Thursday has opponents of a proposed oil storage and shipping facility at the Port of Grays Harbor claiming victory, but the company behind the proposal says it plans to proceed under the much more expansive environmental guidelines required by the court’s decision.

The court ruled that the state Ocean Resources Management Act applies to the proposed facility at the Port, meaning the project will have to stand up to much stricter environmental scrutiny.

“Because the entire purpose of respondents’ (Contanda and the state Department of Ecology) projects is to store and transfer fuel from Washington’s coast to Washington’s waters, the projects fit squarely within (the Ocean Resources Management Act’s) broad reach,” according to the Court’s decision.

EarthJustice attorneys, who represented the Quinault Indian Nation and others in the suit, say the decision effectively ends Contanda’s plan to build the facility.

“The Court honored a law enacted to protect our natural ocean resources from oil shipping,” said Kristen Boyles, the EarthJustice attorney who argued the case for the Tribe and conservation groups. “Today’s decision not only revives state ocean protections, but effectively blocks proposed oil shipping terminals from being built in Grays Harbor. The Ocean Resource Management Act’s protective standards must now be applied, and (Contanda) simply will not be able to meet those higher requirements.”

Quinault Indian Nation President Fawn Sharp wrote, “The Quinault Indian Nation joins all of Grays Harbor in celebrating today’s monumental victory to keep crude oil out of our shared waters and ancestral territory. Like so many of our neighbors across the county, we envision a healthy and pristine natural environment and a thriving, clean, and sustainable economy. After four very long years of fighting for those basic ideals, today’s decision is a significant step toward achieving our collective vision.”

Contanda Terminals, the company behind the port oil facility proposal, said that, despite the statements of the project’s opponents, plans to construct a crude oil storage and shipping operation at the Port of Grays Harbor are by no means dead.

“Contanda disagrees with the court’s interpretation of the Ocean Resource Management Act,” said Contanda president and CEO G.R. “Jerry” Cardillo. “Considering no review criteria has ever been applied to any other project since the law’s enactment, we will work with the City of Hoquiam to determine the path forward. We look forward to building and operating this project safely under the stringent guidelines laid out in the Environmental Impact Statement, and to providing jobs, tax revenue and other economic benefits to the Grays Harbor community.”

The Contanda crude oil terminal would receive oil by rail and include five large storage tanks with about 1 million barrels of capacity. The oil would then be loaded on vessels for delivery to other ports. When operating at its capacity, the facility would receive just under 18 million barrels of crude a year. The project would be located on Port of Grays Harbor property and the state public ports association supported the project with a friend of the court brief.

“We are surprised, obviously,” Port of Grays Harbor Executive Director Gary Nelson said Thursday. “Clearly, it’s a new reading of the statute, which originally was designed to deal with offshore oil platforms and drilling. I don’t think there has ever been a project (submitted) to this standard, so I don’t know what it means.”

Nelson said he is “more concerned with the bigger picture and the detrimental impact it will have on job creation in rural Washington.” Contanda says the facility would have created 480 jobs during the year-long construction phase; when operational, there would be 73 new full time jobs, paying an average of $84,000 per year. Contanda claimed, “Once complete, the new terminal will contribute more than $24 million to the economy each year and millions in state and local tax revenue.”

Groups opposed to the oil terminal were quick to celebrate the high court’s decision.

“We know what we have here in Grays Harbor with our active commercial, recreational, and tribal fishing fleets, our beautiful beaches that draw families to explore, play, and relax, and our coastal waters that support thousands of migrating seabirds every year,” said R.D. Grunbaum, Friends of Grays Harbor. “These natural resources and values are simply incompatible with industrial oil shipping.”

“This is a strong decision protecting and preserving coastal communities now and into the future,” said Dale Beasley, President of the Coalition of Coastal Fisheries, a group that includes Washington commercial fishermen, oyster growers, and charter boat operators. “Today’s decision gives commercial fishermen another handle to protect our livelihoods.”

The state high court justices overturned a lower court ruling that the Ocean Resources Management Act (ORMA in Court documents) did not apply to oil shipping terminals. The Court held: “ORMA is designed to address environmental threats to our coastal waters and specifically addresses the threats posed by increased expansion of the fossil fuel industry along the Pacific Coast. . The language of the statute indicates that the legislature intended it to combat current environmental dangers and to preemptively protect the coastline from future environmental risks.”

Many questions remain after the Court’s decision. Among them, will Contanda, if they choose to proceed with the project, need to go through an entirely new environmental impact statement process? What are the next steps required by Contanda? David Bennett, the Department of Ecology’s southwest region spokesman, said shortly after the decision, “Ecology is reviewing the court’s decision to determine its full implications.” When asked for comment about the outcome of the case, State Attorney General’s Office communications director Peter Lavallee said, “We would defer to our client, the Department of Ecology, for any substantive comment.” The Attorney General’s Office represented the Department of Ecology in the case.

In late 2013, the Quinault Indian Nation, Friends of Grays Harbor, Sierra Club, Grays Harbor Audubon, and Citizens for a Clean Harbor (co-counseled by Earthjustice attorneys Kristen Boyles and Matt Baca and Knoll Lowney of Smith and Lowney) successfully challenged the initial permits issued for oil shipping terminal projects on Grays Harbor, forcing further public safety and environmental review.

At one point, three separate oil storage and shipping facilities were planned, all on Port of Grays Harbor land in Hoquiam. Two of the three initial proposals dropped out, leaving the Westway (recently renamed Contanda) Terminal project as the only active proposal. The Final Environmental Impact Statement for Westway, issued in September 2016, found that there were significant harms and risks from the oil shipping terminal and recommended a long list of actions that could mitigate potential harm.

The city of Hoquiam is currently reviewing Westway’s permit application and a decision was expected as early as next month. It’s not clear what will happen to that process now. Hoquiam City Administrator Brian Shay, who would make the ruling, said by email, “I hope to talk to the Department of Ecology to get their input on how this impacts the proposed project’s review.” He says that it’s his understanding that “there has never been a project in our state where ORMA was applied, so this is entirely new territory.”

Thursday’s Court decision focused on one thing and one thing only: Does the Ocean Resources Management Act, which became state law in 1998, cover the construction of the type of facility Contanda is proposing? Contanda and the state argued the 1998 Act was intended to cover the construction of offshore oil rigs, not facilities on the shorelines. The Court disagreed and said the Act did indeed apply.

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