Whatcom County deals coal port a serious setback
by Floyd McKay
Editor’s note: the story has been updated to include comments from SSA Marine.
Whatcom County dealt a serious, if preliminary, blow Thursday to a proposed new coal export terminal north of Bellingham by requiring an entirely new application from SSA Marine for a key shoreline permit for its Gateway Pacific Terminal. County planners told developers they could not simply revise a 1997 shoreline permit, because the much-larger terminal planned in 2011 is “not within the scope and intent of the original proposal.”
SSA Marine could appeal the decision to the county hearings officer and, if denied, to the state Shoreline Hearings Board. The county also termed “incomplete” a second application, for a major development permit, but the requirements to bring that report up to muster did not appear to be as serious a setback as the shoreline ruling. At the least, the ruling will slow the process of starting environmental work on the terminal, which would be the largest coal-export facility in the country.
The decision, announced at close of business Thursday (June 23), was a victory for environmental and community groups that had fought the idea of a terminal exporting some 48 million tons of coal annually to Asia, primarily China. Much of the community opposition, in Bellingham and increasingly in other rail-line towns, centered on increased rail traffic, an estimated 18 additional mile-and-a-half-long trains each day when the terminal is at capacity.
Jack Delay, co-chair of a Bellingham group whose logo is a train engine with a question-mark, termed the decision, “a victory for common sense and due diligence in looking out for the interests of Whatcom citizens.”
The county’s ruling has no immediate impact on rail traffic; the next step in that process is when opponents ask the county to expand the scope of environmental studies to go beyond the terminal site itself and include impacts on communities along the rail line. Scoping, as that process is called, won’t begin until a new application is filed, however.
The terminal at Cherry Point requires a host of permits, but the immediate issue was two permits issued in 1997 by Whatcom County, a shoreline substantial development permit and a major project permit. The former primarily deals with waterfront and wharf, the latter with upland storage and operations. SSA Marine on June 10 filed an entirely new permit for the uplands but only a revision of its 1997 permit for the shoreline. Those filings triggered today’s decisions.
SSA, in its Project Information Document, asserted the reasoning: “Because the upland portion of the Terminal design has changed from the previously permitted project, it is anticipated that a Major Project Permit (MPP) will be required. . . No changes to the Shoreline Substantial Development Permit for the wharf and trestle are required. Once the MPP is granted, several additional County permits will be acquired, including building permits.”
Terminal opponents argued that the changes are so large — primarily including the dominance of coal exports — that applications should go through a new application process and not be allowed to revise an old permit that no longer seems applicable to the project. A coalition of environmental organizations represented by Earth Justice attorneys Jan Hasselman and Kristen Boyles, wrote to the county on June 17, charging that the shoreline application was “neither legal nor sensible,” and should be rejected by the county as “incomplete.”
“Export of coal involves substantially different environmental, health, fire control, and safety risks compared to other products; it uses different practices for handling, dust control, loading, and transport; and it is exceedingly controversial with the public,” the Earth Justice letter to Whatcom County asserts. “Simply put, the previously-approved dock will be put to a new “use” — loading of huge volumes of coal — and that requires a new permit.”
Hasselman’s June 17 letter triggered a last-minute letter from SSA Marine attorney William Lynn. In a letter sent just hours before the decision, Lynn stated: “We disagree that the inclusion of coal as a commodity changes the ‘use’ of the facilities . . . the Whatcom County Shoreline Management program defines use in a very broad way and the use approved here was a multiple commodity bulk-shipping terminal with provisions to change commodities over time. The proposed revisions do not change that use.”
Hasselman and Bob Ferris, director of Re-Sources a Bellingham sustainability organization that is among groups represented by Hasselman’s letter, termed the county decision a victory for “a full and fair process.” Ferris asserted, “The applicant pursued an inappropriate pathway in order to avoid a full and modern public process. The strategy failed.”
Updated: SSA Marine had this comment on Friday morning: “The County’s decision appears to agree with SSA Marine on a key point — that the scope of the revisions to our permit requires a new permit. What is not so clear is a second key point — that SSA Marine also has an existing permit, and the rights associated with it cannot be ignored. The County and Department of Ecology have made very clear to SSA Marine that the conditions of the original permit cannot be avoided by a new permit process; but of course, you can’t have conditions unless you also have a permit. We believe that both our permit and the conditions that were imposed on that permit are relevant.”
The differences between the 1997 and 2011 shoreline applications are significant, primarily because of the nature and volume of the export plan. The earlier permit began its journey in 1992 when Pacific International Terminals, a wholly-owned subsidiary of SSA Marine, applied for a permit to export some 8.2 million tons annually from Cherry Point to Asian customers. The permit was finally approved in 1997 and listed the exporting of “grains, petroleum coke, iron ore, sulfur, potash, and wood chips,” necessitating around 140 ship calls annually. Coal was not an approved commodity under the 1997 Permit, nor did the 1997 permit anticipate the use of Cape-sized freighters, the largest freighters in the world; docks and terminals were designed for smaller ships.
The 2011 shoreline permit application calls for exporting up to 54 million tons annually, nearly seven times the volume in the 1997 permit; an estimated 48 million tons would be coal, a commodity not anticipated in 1997. Shipping would increase from 140 vessels a year to 487 vessels, many of which would be the giant Cape-size ships.
To accommodate the change, SSA Marine would expand the size and nature of its bulk storage to concentrate on coal. Its application states that Phase One of its project, called the East Loop, will be entirely devoted to coal, with the exception of an administration building. No immediate plans are contemplated to begin building Phase Two (the West Loop) to handle bulk cargoes other than coal.
The Bellingham organization, CommuntywiseBellingham.com, concludes “SSA has been clear that if more contracts for coal are forthcoming they will install the additional equipment to increase capacity sooner, perhaps during initial construction. This makes eminently good sense to any business person. Surely competent management was a big part of the reason Goldman Sachs purchased a 49 percent stake in SSA indicating confidence that rational economic decisions will be made. The logical corollary is that SSA would not be inclined to invest in the West Loop bulk terminal until there is sufficient demand to make it profitable. When, and if, market conditions might provide that demand remains an open question.”
SSA Marine maintains, in full-page advertisement in local newspapers, that there is a demand for commodities other than coal, particularly grain. But there is no plan to build facilities that could store and ship grain in Phase One and, as we pointed out in an earlier article, there appears to be no shortage of grain-export capacity at other Pacific Northwest ports.
Gateway Pacific Terminal is a project of Pacific International Terminals, a wholly owned subsidiary of SSA Marine, Seattle, one of the world’s major operators of shipping terminals. SSA Marine, which grew out of a small stevedoring firm developed in Bellingham by the Fred Smith family, is now 49 percent owned by Goldman Sachs.
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