This story has been updated. In a setback for the proposed $2.3 billion Kalama methanol plant, the state Department of Ecology Tuesday denied a key permit for the project, citing a “significant increase in greenhouse gas emissions and inconsistencies with the Shoreline Management Act,” as principal reasons.
The project’s future is unclear, as applicants have 21 days to appeal the decision to the Shoreline Hearings Board. The board could uphold Ecology’s decision, overturn it, or make a more nuanced decision, according to Ecology.
“I want to emphasize that this was a difficult decision, and we did not make it lightly,” wrote Laura Watson, Ecology director, in a blog post explaining the decision. “As a state agency, Ecology has a responsibility to protect Washington’s environment, but that includes a responsibility to support environmentally responsible economic development. Unfortunately, in our final analysis, the Kalama methanol project did not meet that threshold.”
A Northwest Innovation Works spokesperson said Tuesday the company was disappointed in Ecology’s decision and maintained the project would have a net decrease of global greenhouse gas emissions.
“Given the strong scientific findings and multiple reviews over the last six years, it is difficult to understand why the original vision for both economic and environmental security has been bypassed,” said Vee Godley, NWIW chief development officer. “The Kalama project will achieve a substantial overall global emissions reduction and will mitigate any in-state emissions; the plan is that simple, that clear.”
Northwest Innovation Works wants to build the plant on land leased from the Port of Kalama. The plant would convert natural gas into methanol for use in plastics manufacturing in China and would employ about 200 people, according to the company.
Local elected officials and economic development proponents have called construction of the methanol plant along the Columbia River critical to the economic recovery of the region.
NWIW predicted the three-year construction project would create 1,434 new full-year jobs, with 192 permanent full-time jobs.
While the jobs and economic benefits of the project are important, as an environmental regulator, Ecology has to look at the project’s environmental impacts under the standards of law, said Stuart Clark, special assistant to the director of Ecology.
Ecology said its decision was based on results of its greenhouse gas analysis of the project completed in December. The department began the second supplemental study about a year ago after it had determined the analysis provided by Northwest Innovation Works and the Port of Kalama had been inadequate.
According to Ecology, the department’s reasons for denying the permit include inconsistencies with policies of the state Shoreline Management Act that “insure the development of shoreline in a manner which will promote and enhance the public interest,” as well as “protecting against adverse effects to the public health, the land and its vegetation and wildlife, and the waters and aquatic life.”
The project would produce about 1 million metric tons of in-state emissions annually, making it one of Washington’s top 10 emitters, according to Ecology’s greenhouse gas analysis of the project released in December.
The study concluded that the project could increase global emissions at a lower rate than other methanol sources but it would cause an overall increase.
According to the analysis, the proposed plant could reduce global greenhouse gas emissions by 5.5 to 6 million metric tons per year, compared to the 10 million metric tons concluded by the earlier environmental study by the Port of Kalama and Cowlitz County.
However, Watson wrote the uncertainty of basing the permit decision “on the future behavior of something as unpredictable as a commodity market in fossil fuels and the policy decisions foreign governments may make that influence those markets” is troubling.
“At the end of the day, we know with certainty that this proposal would result in significant new greenhouse gas emissions,” Watson wrote. “We do not know with certainty how environmental and economic policy decisions around the globe may impact the overall methanol market and rate of emissions.”
According to Ecology’s decision, the department also denied the permit because the plant’s emissions would exacerbate climate change affects to the shorelines.
The project would “significantly impede” the state from meeting new greenhouse gas limits the Legislature set in 2020, which require the state to cut emissions 45% over the next nine year and 95% over the next 30 years, reaching net-zero emissions by 2050, according to Ecology.
Northwest Innovation Works volunteered to mitigate all in-state emissions, with a preference for in-state and regional projects. The proposal does not require in-state mitigation and it’s likely a “substantial portion” of mitigation projects will be out of state and wouldn’t help decrease the state’s emissions, according to Ecology’s decision.
Ecology also stated the project conflicts with Cowlitz County’s Shoreline Master Plan, including failure to demonstrate that the project would not adversely affect the Columbia River Shoreline.
The applicant also failed to demonstrate the public interest would be protected from detrimental effects of the project, according to Ecology’s decision. In this case, “public interest” refers to the harm the project would cause to the environment and people, said Ecology’s Clark.
Many industries in Washington require a healthy climate to be viable, including outdoor recreation, fishing, shellfish, agriculture and forestry, said Jeff Zenk, Ecology spokesman. The department has an obligation to look at all industries when looking at climate change and environmental regulation, he said.
This doesn’t mean that no projects on the river will be approved, according to Ecology.
“Ecology is committed to working with the communities of Southwest Washington — and with communities across Washington — to permit projects that meet our state’s requirements,” Watson wrote.
Ted Sprague, Cowlitz Economic Development Council president, said he doesn’t understand the decision and that NWIW has done more than any company he’s worked with the satisfy permitting needs.
“This project represents next level greenhouse gas mitigation for the globe and our own Department of Ecology seems to be ignoring that,” Sprague said. “I don’t know how we can continue to tell people that Washington is open for business when our regulatory environment is such that projects can’t get permitting.”
NWIW is evaluating options for an appeal and “we feel confident that science and reason will prevail,” said Kent Caputo, general counsel for NWIW, in a statement.
The Port of Kalama is also consulting with its legal team to review the decision and to evaluate next steps, according to a statement.
“It’s disheartening that after six years of robust expert review through three environmental impact statements and comprehensive public engagement, additional and unnecessary barriers continue to be raised,” said Mark Wilson, port executive director. “Instead, we should be moving forward together and delivering the real economic and environmental benefits made possible through this project.”
The project, first proposed in 2014, has generated considerable opposition from environmental groups, including two lawsuits.
“Without the necessary state and federal permits, this climate-wrecking proposal is going nowhere,” said Brett VandenHeuvel, executive director of Columbia Riverkeeper, in statement Tuesday. “Ecology’s decision is cause for celebration for people across the Northwest who value bold leadership to tackle the climate crisis.”
VandenHeuvel said he’s been amazed by the Cowlitz County residents “who have fought to protect clean water and our climate for many years.”
“It’s refreshing to have leadership really listen and reflect those public concerns in their decision. So we’re thankful for the Department of Ecology for holding a good process and listening to the people of Cowlitz County and throughout the northwest.”
Other permits would be required for the project to move forward, including two federal permits vacated in November.
A federal court in November vacated the federal Clean Water Act permits the U.S. Army Corps of Engineers approved in April 2019, sending the project back to the Corps for review.
It’s unclear how long it may take the Corps to complete an environmental impact statement for the project, but Ecology’s greenhouse gas study took about a year.