Coal study copy

Hundreds attend a public hearing on the U.S. Corps of Engineers draft environmental study of the coal dock in October 2016. 

The state Supreme Court has upheld a state agency’s denial of a sublease to Millennium Bulk Terminals, dealing yet another potentially fatal blow to the proposed Longview coal export dock.

Millennium had asked for a sublease on state aquatic lands at the old Reynolds Metals Co./ Northwest Alloys dock on the Columbia River. The state Department of Natural Resources’ refusal to grant the sublease in 2017 has been subject to court battles since then.

“The decision to not allow this coal terminal on our public lands was the right decision for Washington, and I applaud the Supreme Court for recognizing that,” state Commissioner of Public Lands Hilary Franz said in a prepared statement Wednesday.

“I work every day to make sure Washington’s public lands make our state stronger and healthier, now and for future generations. Allowing a company to use our waters without a full, transparent accounting of the environmental and fiscal impacts would jeopardize that mission,” Franz said.

Representatives for Millennium could not immediately be reached for comment.

The state high court denied a petition from Northwest Alloys to review a Court of Appeals opinion upholding the DNR’s decision to deny the sublease.

DNR requested details about the structure of the agreement between Millennium and Northwest Alloys, the primary leaseholder of the state aquatic property. DNR also requested information about the firm’s financial integrity and the viability of international coal exports, but that information was not provided, DNR asserted.

Millennium issued a statement in response to the decision.

“We are disappointed that the Supreme Court will not hear our appeal regarding DNR’s decision to deny Millennium a sublease. DNR’s denial of the sublease was both legally wrong and unfair. Millennium has spent millions of dollars cleaning-up this brownfield site for productive re-use, secured permits to operate, is in compliance with all laws and regulations, and is an important member of the local community. We are looking at all of our options.:

Millennium is continuing to fight another court battle over the state Department of Ecology’s denial of a shorelines permit for the plant. The case is in federal court.

Millennium already operates on a state aquatic lands lease for its existing bulk materials dock in the Columbia River. The company has said the lease should be sufficient to develop the coal dock. However, DNR says the company would need additional approval to expand its terminal because the scope of the expansion is so large.

The 30-year lease expires in 2038. The current lease allows for up to three 220 foot docks. Millennium currently has one dock and proposes to add two new docks, two new ship loaders and an access trestle.

Millennium and its parent company, Lighthouse Resources Inc., want to build the largest coal export dock on the U.S. West Coast to ship coal to Asia. But the $680 million project has been fought by environmentalists and some members of the medical community at every turn. The state Department of Ecology withheld a key shorelines permit, and the project is tied up in other court battles, with the company mostly on the losing end so far.

Much of Ecology’s objection is over diesel emissions caused by locomotive exhaust in the Highlands neighborhood, which adjoins the “Reynolds Lead” rail line that would serve the terminal. The terminal would require 16 mile-long train passages a day — eight bearing coal, the other eight exiting empties — to transit the rail corridor from the Longview Wye to the Millennium site.

Millennium estimates construction would require 1,300 workers and about 130 permanent workers to operate at full build-out. It also would generate millions of dollars annually in taxes.

The state appeals court justice had reversed a previous decision by Cowlitz County Superior Court Judge Stephen Warning that DNR acted “arbitrarily and capriciously” in denying Millennium sublease for aquatic lands leased by Northwest Alloys Inc.

But the state appeals court said DNR’s consideration of Millennium’s financial condition and business reputation was “expressly authorized under the lease” with Northwest Alloys, according to court documents.

“And the additional information DNR sought from Millennium, which Millennium failed to provide, was relevant to DNR’s inquiry. Accordingly, we conclude that DNR’s denial of consent to sublease was not arbitrary and capricious,” the judges wrote.

The Supreme Court’s decision not to review that finding means the appeals court decision stands.

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