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China-backed company envisions major methanol export plants at Kalama, Clatskanie
Methanol

China-backed company envisions major methanol export plants at Kalama, Clatskanie

Officials estimate project will bring 2,000 construction jobs during initial building period.

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Local officials are cheering a Chinese company’s plan to build two methanol export plants at the Port of Kalama and Clatskanie and create up to 480 permanent jobs and 2,000 construction jobs over next five years.

The $3.6 billion investment by a newly formed company won’t by itself be a salvation from hard times, but many people in business, government and labor were giddy with the news, noting that the projects will help boost government revenues, lower joblessness and restore hope for better times in the long-struggling region.

In addition to the methanol jobs, the plants should generate hundreds of “spinoff” jobs, and the full net job creation could hit 1,000, company officials estimated.

“This is how we build our way out of this recession,” Clatskanie Mayor Diane Pohl said Wednesday.

Cowlitz Economic Development Council President Ted Sprague said Wednesday that the project is just what Cowlitz County economic leaders have been trying to secure for years: It provides long-term employment and it’s environmentally sound, not just for the region but globally.

“This brings together all the best benefits of economic development. It’s a large capital investment, brings a lot of high-wage jobs, and exports a product. Plus, we like the green product,” Sprague said.

Northwest Innovations Works, a new company with offices in Vancouver, plans to build the twin plants (each costing $1.8 billion) in two phases. In addition to the economic boost, company officials say they’re building a green business that reduces greenhouse gas emission worldwide by helping reduce the burning of coal in China.

Initial reports suggested the jobs created would be half the amount reported Tuesday, but during a Wednesday morning meeting with The Daily News, company representatives said they plan to build a second phase at both plants. Company officials also said they’re looking to build three more plants on the West Coast to meet demand.

The boost in jobs would be the region’s largest since Steelscape opened at the Port of Kalama in the early 1990s. The project would also be the largest private capital investment in the history of the Lower Columbia River region.

At the Port of Kalama, Northwest Innovation Works officials want to lease a vacant site north of Steelscape for one of the manufacturing facilities. The company also would require a natural gas pipeline to supply the plant. At Port Westward Industrial Park near Clatskanie, Northwest Innovation is seeking to lease 82 acres for a similar, separate project. Natural gas lines already serve that area.

Northwest Innovation officials hope to start construction next year and begin fully operating both plants in 2018. The company would then begin exploring the second phases.

Northwest Innovation is a joint partnership between the Chinese Academic Sciences and BP, formally known as British Petroleum. The two proposed facilities will supply methanol to the northern Chinese city of Dalian, which uses the methanol to make olefins, a key ingredient in manufacturing plastics, such as water bottles.

The plants will not use any raw material other than natural gas, which is converted through a chemical process into methanol, a liquid that evaporates easily, completely dissolves in water and that has been manufactured in the U.S. for decades. By contrast, many Chinese plants manufacture ethanol by burning coal, a far dirtier process. Using natural gas is far cleaner and far more efficient and can help China reduce it contribution to global greenhouse gases, company officials said.

“We take natural gas and make a product out of it that is used to make things we touch on a daily basis,” Northwest Innovation Works President Murray “Vee” Godley III said. “Windshield washer fluid is 30 percent methanol.”

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The company considered the Pacific Northwest because of its low natural gas prices. Officials said they don’t expect their large consumption will cause a spike in prices for other consumers.

The company’s Chinese client is hungry for large quantities of the product, which would be shipped from the Columbia River ports on 50,000-metric-ton Panamax ships to Dalian. Methanol does not require any pressurized or special handling technology, they said.

“We need to get to market fast,” Godley said.

Workers will produce 5,000 metric tons daily of methanol at each plant and 1.8 million tons annually. The city of Dalian is planning to build an 8 million metric ton storage tank for the product.

Godley said Northwest Innovation intends to hire union contractors to build the plants and intends to hire local workers to staff them. The lowest-paid jobs would have salaries in the $40,000 to $50,000 range, but each plant also would employ a number of higher-paid engineers, chemists and professional workers.

Union construction officials said they’re seeking a written agreement to ensure most of the jobs are local. They said they met with Northwest Innovation officials Wednesday and were happy the company was actively seeking their help from the start.

“It seems like a huge boom, a huge surprise. ... We’re really looking forward to trying to find some more building trades people in the future,” said Jeff Washburn, president of the Kelso-Longview Building and Trades Council.

Asked why the company chose Kalama and Port Westward, Godley said, “These two ports fit our needs. You’ve got a good, strong workforce that’s local and needs jobs.” The company needed a northwest location to make it easy to ship products across the Pacific to China, he added.

Those involved with the deal stressed that the plans are in their earliest stages. Terms of lease with the Port of Kalama are still being worked out, and it’s unclear what sort of environmental and regulatory hurdles the company will face.

In addition to jobs, the two plants would provide a significant boost in tax revenue for local governments, though a precise estimate was not immediately available Wednesday.

Cowlitz County Assessor Terry McLaughlin said Northwest Innovation Works’ investment of $1.8 billion in the county would increase the county’s overall assessed property value by 20 percent. That’s about $10 million in new property tax revenue using existing levy rates, he said.

“It’s a significant contribution. It’s definitely going to help local government,” McLaughlin said. “It’s nice to see this community still being looked at as an investment to business.”

Northwest Innovation has not yet applied for building permits and must clear regulatory hurdles before construction begins. Company officials say the plant will release steam and trace amounts of carbon dioxide and nitrogen oxide.

Sprague said the company has been eyeing the region for four months and was attracted by the low energy costs.

Northwest Innovation Works is a subsidiary of the Chinese Academy of Science, a government-owned group that supports economic development projects worldwide.

Wednesday night, Port of Kalama commissioners granted Northwest Innovation officials permission to start preliminary work at the site.

On Thursday, the company will present its Oregon plan to Port of St. Helens commissioners at 5 p.m. at the Clatskanie PUD building.

Previous plans to build a natural gas line to the Port of Kalama have met with protests from citizens along the proposed route, some of whom argue that landslides on the soft ground could cause a line to rupture.

Erik Olson covers labor and industry and politics for The Daily News. Reach him at 360-577-2510 or eolson@tdn.comTony Lystra covers Kelso city government, Cowlitz County government and environmental issues for The Daily News. Reach him at 360-575-6210 or tlystra@tdn.com.

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