Providing coverage of Alaska and northern Canada's oil and gas industry
November 2013

Vol. 18, No. 47 Week of November 24, 2013

Washington board blocks rail project

Shorelines Hearing Board reverses local permit for Grays Harbor project, requiring state, local officials to conduct a new review

Eric Lidji

For Petroleum News Bakken

A Washington state regulatory board is blocking the proposed expansion of a storage facility at Grays Harbor that would accommodate shipments of crude oil by rail.

The Shorelines Hearing Board reversed a permit issued for the project, saying the city of Hoquiam and the Washington Department of Ecology violated the State Environmental Policy Act by approving the expansion. Specifically, the board said the regulators failed to adequately consider the cumulative effect of several facilities proposed for Gray harbor and fell short of requirements for gauging how the project might impact the environment.

The reversal delays the project, but the Washington Department of Ecology could still allow the expansion to move forward if it is able to pass a more thorough review.

The Pacific Northwest is seeing numerous rail facility proposals to accommodate the increase in mid-continental oil supplies, particularly from the Bakken formation.

The Shorelines Hearing Board handles appeals of local permits.

Three projects

Westway Terminal Co. LLC has operated a terminal at the port since late 2009. The facility currently includes four 3,340,000-gallon storage tanks, two short rail spurs with 18 loading spots and associated buildings. In December 2012, the company sought permission to expand the facility. The proposed expansion would add four 8,400,000-gallon storage tanks and expand the rail facilities to four long spurs with 76 spots. The expansion would also require a pipeline connecting the storage tanks to the terminal.

A coalition of citizen and environmental groups challenged the project, but also questioned whether regulators properly considered it alongside two other projects.

In February 2013, Imperium Terminal Services LLC also sought a permit to expand its facilities just west of the Westway operation. The expansion would also accommodate shipments of liquid fuels, including oil, by adding nine 3,360,000-gallon storage tanks and some 6,100 feet of track through new rail spurs, as well as an associated pipeline.

And US Development LLC recently proposed a third project in the area.

The $50 million rail facility would have six-to-eight storage tanks with capacity of 800,000 to 1 million barrels and receiving capacity of less than 50,000 barrels per day.

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