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Port to vote on methanol export requirements

Port to vote on methanol export requirements

Methanol plant site

Northwest Innovation Works' $2 billion methanol plant would be built at the north end of the Port of Kalama. 

Port of Kalama commissioners are set to vote Wednesday on an amendment to Northwest Innovation Works’ lease that would prohibit exported methanol to be used for fuel.

Kent Caputo, NWIW general counsel, said the company worked with the port on the amendment in response to “confusion” over the use of methanol produced at the plant.

“This creates a fence line for us,” Caputo said. “But it’s not going to change what we’re doing because this has always been our plan.”

Brett VandenHeuvel, Columbia Riverkeeper executive director, said the “completely unenforceable” amendment feels like a “last-ditch effort to backtrack on misleading regulators and the public” about what the methanol will be used for.

The company has maintained for years that the methanol would be used for plastics manufacturing in Asia. In late April, a NWIW investor presentation that focused on using methanol for fuel was released, which Columbia Riverkeeper representatives said made it appear like the company was misleading the public, state regulators or potential investors.

“Northwest Innovation Works has lost a lot of trust by misleading the state and the public,” VandenHeuvel said. “I don’t think it will be easy to fool the Department of Ecology with this stunt. ... Northwest Innovation Works should have honestly and thoroughly disclosed the full impact of burning methanol as fuel to the public and they didn’t.”

NWIW officials said the Kalama project is dedicated to the materials market and the presentation was used as overall methanol education and not specific to the project.

The lease amendment creates “clear constraints” on methanol use to address the claim that NWIW is going to make fuel, Caputo said.

Along with project opponents, the state Department of Ecology also raised concerns about the methanol use in a comment on the draft supplemental environmental study focused on the project’s effect on global greenhouse gas emissions. The draft of the study, released last fall, showed the plant would decrease those emissions by displacing coal-powered methanol refineries in China. The draft of the study didn’t analyze the effects of methanol as fuel.

Ecology recommended that the final study fully evaluate both potential uses of the methanol unless the company could better demonstrate that 100% of the methanol would be used for plastics manufacturing.

Caputo said the lease amendment “clearly manifests” the company’s statement that the methanol won’t be used for fuel. It’s something permitting agencies can take into account when reviewing the two shoreline permits the project needs to move forward, he said.

NWIW is leasing about 90 acres at the port for the planned $2 billion methanol plant. Port commissioners first signed the 30-year lease agreement in April 2014. NWIW is currently paying $49,725 monthly to lease the land set aside for the methanol plant. That would increase after construction begins.

The amendment to the dock use agreement requires documentation of the use of the product that goes over the wharf and includes a NWIW covenant that the methanol produced at Kalama will not be sold for use as a fuel, said Liz Newman, port marketing and communications manager.

It would require NWIW to keep records of the methanol use and provide them to the port at the company’s cost, Newman said. NWIW would also pay for any port audits of the records.

The company would pay a 100% and 200% surcharge of the wharfage rate of $1 per metric ton for the first and second breaches of the lease agreement. If NWIW breaks the agreement for a third time, it would pay a 300% surcharge and lose use of the wharf, she said.

The money from the surcharge would be used for greenhouse gas emission mitigation as outlined in the supplemental environmental study, Newman said.

“This is something we encouraged,” said Vee Godley, chief development officer for NWIW. “We’re tired of having the message moved away from the true message that this is for materials.”

Riverkeeper’s VandenHeuvel said neither the port nor NWIW will be able to police the methanol’s end use in China.

The port commission meets at 5:30 p.m. Wednesday at the administration building on West Marine Drive.

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