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Oil, coal, gas: Export proposals are growing

Oil trains at the Tesoro refinery in Anacortes. Credit: Paul K. Anderson, Chuckanut Conservancy

The Big Energy Export Train aimed at Pacific Northwest deep-water harbors is looking to add a new cargo: liquefied petroleum gas (LPG), also known as propane and butane.

The new export LPG cargo would be added to a menu that includes coal from the Powder River Basin of Wyoming and Montana; crude oil from the Bakken fields of North Dakota; and liquefied natural gas (LNG) from . . . well, you get the idea.

Petrogas, a Calgary-based energy company, plans to upgrade a small export terminal at Cherry Point in Whatcom County, near a proposed coal-export terminal and two oil refineries. The facility has had several owners since 1976 and has exported a small amount of LPG to Ecuador and Asia.

A Texas energy company, Sage Midstream, has announced plans for a new LPG export terminal at Longview; the site is near a proposed coal-export terminal, Millennium Bulk Products.

At least two proposals for liquefied natural gas terminals are on the table in Oregon: a longstanding one at Astoria near the mouth of the Columbia and a newer one at Coos Bay on the southern Oregon Coast. The Coos Bay project would include a 232-mile-long pipeline from south-central Oregon.

A little technical explanation: Natural gas is drilled from deep underground rock formations and liquefied natural gas is natural gas that has been converted to liquefied form for ease of transportation or storage; liquefied petroleum gas is largely captured from the waste of petroleum refineries (flaring). Natural gas is composed of methane and ethane, LPG from propane and butane. Both are explosive if exposed to fire or ignition.

Petrogas included few details in its Cherry Point announcement, and officials declined our request for an interview. But officials of Sage’s subsidiary, Haven Energy, were quick to address rail-transportation safety issues. Haven President Greg Bowles told the Longview Daily News that butane and propane would be shipped in the modern DOT-112 rail tank cars, which are built to a higher standard than the DOT-111 cars used to ship crude oil.

The most serious LPG accident in recent years killed 17 people in Viareggio on the Tuscan Riviera in Italy in 2009. The derailment of a 14-car LPG train caused an explosion and also forced the evacuation of 1,000 people, the New York Times reported.  In 2013, a derailment in Alberta caused an explosion and fire but no injuries, Reuters reported; one LPG car exploded and three others caught fire.

Industry sources defend the safety of LPG, and stress training to prevent accidents in transportation or use. ProActive Gas Safety, a consulting firm, termed the Italy explosion “extremely rare.” The Federal Railroad Administration in 2012 issued new safety rules for LPG. The proposed LPG terminals are relatively small compared to several crude-oil terminals proposed in the Northwest; at most it appears that a train or two per day (full and then empty for returning) would serve each terminal.

The $275 million Longview facility promises up to 125 permanent jobs and many more construction jobs; it would open in 2016. The key agency is likely to be the state Energy Facility Site Evaluation Council (EFSEC), which reviews large energy projects. The agency is now reviewing the Vancouver crude-oil terminal and beginning an Environmental Impact Study (EIS) similar to those being conducted by state, federal and local agencies for the coal-terminal proposals. Haven has been instructed to check with EFSEC, but the agency has yet to receive an inquiry, Manager Stephen Posner told Crosscut. Until he receives an inquiry he cannot determine if the project meets the criteria for EFSEC review. The little-known agency will depend heavily on other agencies to meet the crush of energy-export proposals, but Posner said he feels it can handle the load.

EFSEC is currently reviewing a large crude oil-export terminal at Vancouver on the Columbia River; an international consulting firm with office in Seattle and Portland, Cardno Etrix, will lead the environmental review for EFSEC. Ultimately, recommendations from the agency go to Gov. Jay Inslee for a final decision.

Environmentalists and climate-change activists have actively opposed both coal and oil exports because of coal’s contribution to global warming and the effects on local communities from added rail traffic and on Puget Sound because of added shipping. LPG is able to assert environmental credentials, however, because much of the product is the result of capturing gas from mining and refining, reducing that impact on the atmosphere.

Liquid gas for the Ferndale facility would primarily originate in Canada’s shale oil fields. The facility, currently the only LPG terminal on the West Coast, built an export market in the 1990s, but exports then slowed until the recent energy boom. Ferndale gets much of its LPG from adjacent refineries, as a byproduct, but future production is likely to involve additional Canadian LPG. Expansion at Ferndale would probably not require EFSEC approval, but Whatcom County permits would be required.

The Ferndale product is expected to be shipped to Asia; Idemitsu Kosan Co. of Japan has acquired an interest in Petrogas.

LPG is only the most recent entry into a regional energy derby that began in 2010 with filing of applications for the nation’s largest coal-export terminals at Longview and Cherry Point in Whatcom County. Millennium and Gateway Pacific applications are now going through environmental reviews for the counties involved, the State Department of Ecology and U.S. Army Corps of Engineers. Other agencies will also weigh in on special permits, and Native American tribes will play a role.

In Oregon, a coal-export terminal at Boardman on the Columbia River — which involves barging the coal downstream to a St. Helens loading terminal — is trying to meet requirements of state agencies and is under intense pressure from environmental groups.

Both Oregon and Washington are also looking at proposed crude-oil terminals. The largest would be at Vancouver, across the Columbia from Portland, but three separate companies want to build a terminal on Grays Harbor at Hoquiam. EFSEC Director Posner said the Grays Harbor terminals are not large enough for his agency to review; it will fall to Ecology to conduct the EIS.

Refineries at Anacortes, Cherry Point, Tacoma and St. Helens are already taking or planning to take crude oil by unit trains from North Dakota. Existing refineries generally do not need EFSEC approval. Federal law bars the export of most crude oil but Congress is under pressure to lift the ban.

Coos Bay, on the southern Oregon Coast, seeks permits to export liquefied natural gas, which would require a 232-mile-long pipeline from an existing pipeline at Malin in south-central Oregon to Coos Bay. It could be the first LNG terminal on the West Coast. A similar project at Astoria, at the mouth of the Columbia, is pending regulatory permits after a long battle with regulators and critics.

A tangle of federal, state and county officials in two states are struggling to keep up with the onslaught of energy proposals; few West Coast terminals are capable of shipping coal, oil and natural gas to the hungry Asian marketplace and the demand is building. The process of environmental review and lengthy construction times places the projects at the mercy of the world’s volatile energy market.

All of the plans have aroused fears and resistance from environmental and climate-change groups as well as communities worried about the impacts of rail and ship transportation. Coal is the most vulnerable of the commodities because of its proven damage to the ozone, a critical element of global warming. But the transportation of crude oil by rail carries fears of fires and explosions from train accidents; trains would run through many cities, including Seattle.

The volume and complexity of the projects defies the region’s ability to set priorities and invites additional proposals. “Until we have a coherent energy policy, the Northwest will be at ground zero,” comments Erik dePlace of Sightline Institute, an environmentally oriented think tank that has studied the impacts of the various proposals on the region’s economy and infrastructure.

Pressure is also building on Govs. Inslee and John Kitzhaber of Oregon, both supported by environmental organizations in previous campaigns. Inslee plays a key role as the final say on large new energy facilities such as the Vancouver oil terminal. Kitzhaber chairs the Oregon Land Board, overseer of the submerged and submersible Columbia River banks and shore, required for the Ambre coal-export terminal.

A petition and letter-writing campaign spearheaded by anti-coal groups generated over 20,000 signatures in a six-week period targeting Kitzhaber’s office, according to Sierra Club officials. No decision in imminent on the Ambre project on the Oregon side of the Columbia.

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