Regulatory review of Millennium Bulk Terminal takes toll on Longview, puts state economy at risk

We’ve not written much about the proposed Millennium Bulk Terminal for a while. The terminal would be a major export facility for coal and other commodities in Longview, Cowlitz County. It’s been caught up in a complex web of regulation that’s drawn on for years. 

Our most recent post was last May, when we wrote of the release of the draft environmental impact statement. Public comments were then taken, with the comment period ending in late June. According to the ecology department,

Over 2,000 people attended the open houses and public hearings.

With Labor Day on the horizon, interest in the project is again picking up. In an op-ed in the Puget Sound Business Journal by AWB president Kris Johnson and National Association of Manufacturers president Jay Timmons use the project as an example of regulatory overreach. 

Take, for instance, the ongoing delay in permitting the Millennium Bulk export terminal, one of three major projects facing severe regulatory challenges along with proposed Gateway Pacific Project in Whatcom County and Vancouver Energy project in Clark County.

Millennium is a win-win project that cleans up a contaminated site along the Columbia River and constructs a critical infrastructure project to access foreign markets. The recent release of the state Department of Ecology’s draft environmental impact statement for the proposed export terminal in Longview is an example of good regulations gone wrong.

Johnson and Timmons cite the appropriate strength of the local environmental review process and note 

…the Department of Ecology concluded in its draft EIS that the Millennium project will meet Washington’s strict environmental standards.

But then the rules changed.

Unfortunately, the state now holds this project and all others like it responsible not only for the local environmental impacts of its facility, but also the impacts associated with the production, transport and consumption of the goods passing through the export terminal.

They comment,

This is such an odd, unprecedented set of requirements that the federal government would not even join with the Department of Ecology in conducting the review.

It also sets a very dangerous precedent for businesses seeking to export their products from Washington.

The Washington Research Council in 2014 published a special report addressing the department’s expanded review. The report, “A Newly Expanded SEPA Threatens Washington’s Competitiveness, concluded,

The Department of Ecology’s approach to the SEPA review of recent projects is troubling. It represents an expansion of the process that no other state has done…

By expanding SEPA in these cases, Washington risks its competitiveness by making the process more uncertain for future projects.

The WRC report provides useful context for understanding the challenges and obstacles the expanded SEPA puts in place. We recommend it. 

Then there are the on-the-ground effects.

This week, in the Daily Caller, a national online publication, Joseph Hammond reports on what the extended review process means to Longview.

Five years ago, Millennium Bulk Terminals acquired the 540-acre site. Officials planned to convert an old aluminium smelter into a profitable industrial export facility. They restored a wetland area in one part of the site to show their commitment and began the permit process to export coal.

That was four years ago.

Today, there are more birds and fish on the site than workers, and the coal terminal project has yet to be approved. The project’s environmental approval process is nearing the longest in the history of Washington state.

The terminal’s extended delay has had an economic impact on Longview, where the unemployment rate is roughly 8 percent, higher than the average for both the country and the state of Washington as a whole.

If completed, the project will export 44 million tons of coal per year to East Asia and provide jobs not only in Longview, but further inland in states like Wyoming and Montana.

Hammond reports on the people affected by the policies and the politics. It’s a good read. He also interviews Washington Farm Bureau CEO John Stuhlmiller, who makes a critical observation.

Making his pitch for the site, Stuhlmiller offered a big picture argument, “We are an export orientated state and we need to stay that way. This site has been handling coal since 1941, look if this site isn’t built the coal is going to be exported elsewhere. Maybe it will be exported from Canada or Mexico which would be a net loss of jobs to us here in Washington.”

The Seattle Times this week also looked at Cowlitz County and the community’s shifting political demographic. The story doesn’t mention the export facility, but it describes the challenges of a community struggling with a declining manufacturing base and an uncertain economic future.

Timber and manufacturing jobs have declined. Wages have dropped.Unemployment remains above state and national rates.

“The county has had some success with diversification,” according to state economist Scott Bailey, “but it has been a case of two steps forward, one step back.”

…“I’d agree people are generally disgruntled about the security of jobs and what the lifestyles of their kids and grandkids will be,” said Kurt Gallow, president of Local 153 of the pulp and paper workers’ union.

Like the Daily Caller piece, the Times story examines the people affected by the politics. 

Regulatory uncertainty is rarely a virtue. And  it clearly contributes to the economic challenges facing the region. 

In our foundation report, we called out the problem with the state’s approach to the terminal.

In terms of regulatory content, Washington regulations routinely exceed the minimums required by federal law. For example, the state chose to require a global environmental impact statement, rather than a project-specific analysis, for proposed coal export facilities in 2014.

We wrote,

While regulations ultimately reflect Washingtonians’ policy preferences, they should be regularly reviewed to see if, for example, the benefits justify the added costs of compliance. 

It’s unlikely the expanded EIS would pass that test.