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Riverkeeper: Kalama firm misleading regulators about methanol use

Riverkeeper: Kalama firm misleading regulators about methanol use

Northwest Innovation: Lying to public, regulators or investors would be 'foolhardy'

Methanol plant site

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

An environmental organization says Northwest Innovation Works (NWIW) misled regulators about the how the methanol produced at its $2 billion Kalama plant would be used in China.

The company scoffs at the suggestion.

Northwest Innovation for years has maintained that the methanol would be used in plastics manufacturing, and a recent analysis of the plant’s impact on climate change focused exclusively on that use.

But Columbia Riverkeeper Conservation Director Dan Serres said a NWIW investor presentation shows the methanol would be used as fuel. He said someone who attended a pitch to potential investors sent his group a 26-slide presentation, and most of it relates to using methanol for fuel.

NWIW officials told The Daily News Tuesday the Kalama project is “dedicated and focused on the materials market.” The methanol produced at the site will be sent to China to produce olefins used in plastics manufacturing, as the company has said all along, said Kent Caputo, general counsel and chief commercial officer.

The presentation in question was used as overall education on the methanol market and was not specific to the Kalama project, he said.

Serres said the presentation also makes it appear that NWIW is misleading either the public, state regulators or potential investors.

But Caputo said any investor who did “their due diligence” would see this project limited to the “materials market.” For investors looking to get into the fuel market it “would not be an investment they would want to make” because the methanol will be dedicated to plastics manufacturing, he said.

“You can imagine what would happen if we held out to investors that we had a different purpose than what we’ve said,” Caputo said. “It would be foolhardy at best.”

NWIW wants to build the methanol plant at the Port of Kalama. Shoreline permits for the project are on hold until they can be reviewed under the final version of a supplemental environmental study expected to be released in the next few months.

The company contracted Life Cycle Associates to complete a cradle-to-grave analysis of the project’s effect on global carbon emissions after the state Shorelines Hearings Board concluded the original climate change analysis for the plant was inadequate.

The draft of the Supplemental Environmental Impact Statement (SEIS), released last fall, concluded that the plant would significantly decrease global greenhouse gases because it would displace coal-powered plants in China. Aside from that, the company has promised to completely eliminate all its carbon emissions in Washington through offsets and other means.

However, Serres said the investor presentation undercuts the study’s outcome because the greenhouse gas emissions from fuel use were not analyzed.

“It makes the analysis much less favorable in terms of greenhouse gas impact,” Serres said.

Columbia Riverkeeper Friday submitted a supplemental comment to the state Department of Ecology and the Port of Kalama regarding the presentation, asking the agencies to assess the effects of burning some of the methanol as fuel when reviewing the permits.

The presentation calls into question NWIW’s commitments to reduce or offset the site’s greenhouse gas footprint in other ways, Serres said.

“What this brings home for us is it raises the question of the veracity of all of those claims,” Serres said. “When looking at this issue of not telling the truth of what the methanol is for, it calls into question the whole project.”

NWIW Chief Development Officer Vee Godley Tuesday doubled down on the company’s commitments to reduce or compensate the site’s carbon emissions by purchasing verified carbon credits or paying a comparable amount to a greenhouse gas mitigation fund.

“We have a commitment to addressing climate change while bringing jobs to community,” he said.

The plant would create about 1,000 construction jobs and 200 permanent jobs, according to NWIW. It would also significantly decrease property taxes for homeowners in the Kalama School District, according to the port.

It would convert natural gas into methanol, which would then be shipped to China, according to NWIW. Part of the reason environmentalists oppose the plant is that 67 percent of the gas produced in the U.S. is obtained through the ecologically controversial extraction method called fracking, which injects high pressure water or liquid underground to force out oil and gas.

Local opponents of the project have voiced concerns about the use of the methanol as fuel in the past. The state Department of Ecology also raised the issue recently in a comment to the greenhouse gas study, which was released late last year.

“The Draft SEIS states that methanol will only be used for olefin production,” Ecology’s comment said. “However, because there are no requirements for this and consequently it seems reasonable to suggest and discuss in the Final SEIS that some methanol from this project would be used for mobile or stationary fuels at some point in the 40+ year lifespan of the project.”

Ecology also recommended that the final study fully evaluate both potential uses of the methanol unless “a more robust demonstration of 100 percent use as olefins was provided.”

Caputo said NWIW would limit how the methanol gets used through long-term commitments with olefin producers in China to make sure it goes to facilities “dedicated to the materials pathway.”

Once the final environmental study is released in the next few months, Cowlitz County and the state Department of Ecology will review it to see if it requires issuing a new shoreline permit or an amendment to the permits, Godley said.


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