Washington enters uncharted regulatory territory: fish consumption, coal export EIS and judge-ordered GHG reductions

It’s been a busy week in Washington state’s regulatory world. The big news was the long — and we mean long — awaited environmental impact statement for the proposed Millennium Bulk Terminals (MBT) coal export project in Longview, but there were also new developments in water quality and greenhouse gas regulation. We’ll take them up in order.

But first, consider today’s Wall Street Journal commentary on America’s Slow Growth Tailspin and the role played by regulation. John H. Cochrane, a scholar with the Hoover Institution at Stanford University, mentions three reasons cited for the sluggish recovery: First, We’ve “run out of ideas; second, “secular stagnation,” a “savings glut,” and,

The third camp (mine) holds that the U.S. economy is simply overrun by an out-of-control and increasingly politicized regulatory state. If it takes years to get the permits to start projects and mountains of paper to hire people, if every step risks a new criminal investigation, people don’t invest, hire or innovate.

Well, slow permitting characterizes the MBT project. The Associated Press reports,

A coal-export terminal proposed along the Columbia River in southwest Washington state could have unavoidable, significant impacts on greenhouse gases emissions, vessel traffic and rail safety, according to an environmental review released Friday…

Millennium Bulk Terminals-Longview is proposing a terminal that would handle up to 44 million metric tons of coal a year. Coal would arrive by train from the Powder River Basin in Montana and Wyoming and the Uinta Basin in Utah and Colorado to be stored and loaded on ships for export to Asia.

The Keep Washington Competitive coalition responded to the EIS with a press release supporting the project

“Working families in Washington state have been waiting for more than four years already,” said Lee Newgent, executive secretary of the Washington Building & Construction Trades Council. “The Millennium project will bring much-needed, family-wage jobs to the people of Southwest Washington.”

…“We need companies to continue to invest in manufacturing, construction, and infrastructure to support trade,” said Kris Johnson, president of the Association of Washington Business. “Washington’s regulatory process has become longer and more uncertain, which sends the wrong message to employers. We are glad to see today’s release of the draft EIS for Millennium, but remain concerned other companies will not be willing to tolerate the delays of Washington’s permitting system and will not bring the needed investment to our state.” (AWB statement here.)

The Washington Research Council called attention to the unusually broad scope of the EIS, which was the subject of a 2014 special report by the WRC.

The National Association of Manufacturers also sharply criticized the EIS scope and delay. 

…today’s SEPA analysis, which broadens the scope dramatically to include cumulative, lifecycle impacts not only of the terminal but the commodities being shipped through that terminal. It’s an unusual practice to say the least, and has had manufacturers concerned for a long time, given the potential precedent that could be set for all exports of manufactured goods.

…One area that immediately gives us concern is how the WDOE and Cowlitz County evaluate the greenhouse gas (GHG) footprint of the facility and the mitigation measures recommended. This is largely uncharted territory from both a legal and policy standpoint, and one that could have a significant impact on similar analyses in Washington and other states. Manufacturers depend heavily on exports, and conditions placed on one exported product could cascade to other products as well. If those conditions get in the way of trade or unduly delay exports, it could also violate U.S. international treaty obligations under World Trade Organization (WTO) agreements.

While the coal export facility EIS represents troubling expansion of regulation, it’s not the only new game in town.The Lens reports on the latest responses to the state’s proposed water quality requirements, based on an as-yet undetermined fish consumption rule. The online news service cites industry and city calls for the regulations to be drafted by the state Department of Ecology rather than the federal Environmental Protection Agency. That doesn’t mean everyone’s happy with DoE, though. 

In a letter signed by nearly 20 companies, Chris McCabe, Executive Director of the Northwest Pulp and Paper Association (NWPPA), wrote that “our greatest concern” is the current insistence of Ecology – and the EPA – of keeping the cancer risk rate at one in a million while increasing the fish consumption rate to 175 grams a day from the current 6.5 gram rate. These criteria are part of an equation used to determine acceptable levels of chemicals in wastewater and industrial discharge water before it can go back into rivers, streams and lakes.

But the state agency may provide more flexibility.

Ecology’s draft rule seeks to provide relief for cities or companies seeking permits. One approach creates exemptions in which permitees only need to keep the discharged water as clean as it was when they received it, but Ecology has admitted this pathway would not be widely available. The draft rule would also remove the ten-year limit on compliance scheduling to meet the new standards. The rule also allows for variances but to date, they have never been granted in the state, and also require EPA approval.

Again, uncharted territory with significant consequences. Then there’s the King County Judge who ordered the Department of Ecology to complete greenhouse gas regulations

In a ruling from the bench, Judge Hollis Hill also said the state next year must come up with a legislative proposal for future emission reductions, according to Andrea Rodgers, a Western Environmental Law Center attorney who represents plaintiffs.

“She gave us everything we wanted,” Rodgers said.

Rodgers represents eight young climate activists, supported by Our Children’s Trust, who have waged a two-year legal battle aimed at stepping up state efforts to cut greenhouse gas emissions.

As we wrote in our foundation report

Many state-level regulations reflect Washingtonians’ commitment to protecting human health and the natural environment. However, the costs of regulatory compliance have a direct impact on investment and job creation.

…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. {Note: That’s the MBT terminal.) Policies to address climate change and water quality are frequently cited by employers as areas of uncertainty that can affect long-range planning…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. 

The latest development add urgency to our call for cost-benefit justification.