Foes see partiality in oil terminal review process

State’s choice to help evaluate Tesoro-Savage documents has worked for Tesoro

By Aaron Corvin and Erin Middlewood, October 5, 2014, The Columbian

Ever since Tesoro Corp. and Savage Companies proposed an oil-by-rail terminal at the Port of Vancouver, company and port officials have said that the state energy facility siting panel’s rigorous review would address threats to safety or the environment.


Critics aren’t so sure. One concern: the initial draft analysis of the oil terminal’s impacts was written by consultants hired by the Tesoro-Savage joint venture. Another concern: the company hired by the Washington state Energy Facility Site Evaluation Council to help check that analysis has previously worked for Tesoro.


The analysis, called an environmental impact statement, is important because the siting council draws on it, along with a series of court-like proceedings, to make a recommendation to the governor. That official has the final say on whether to approve the oil terminal, which would receive an average 360,000 barrels a day. It may be years before the council finishes its work and the governor makes a decision. Even then, that ruling will be subject to appeal to the state Supreme Court.


Some experts say that such lopsided corporate involvement in an environmental impact study creates a bias in favor of the project applicant. “It’s par for the course in the corruption of the environmental analysis process in the United States,” said John Echeverria, a national expert on environmental law and a professor at Vermont Law School. “The concern is that a consultant will have greater loyalty to project proponents than to the agency. It’s not likely to be a document that serves the public well, but rather the interests of project proponents.”


Others say it’s simply not practical for agencies to keep all the experts on staff necessary to address every topic analyzed by an environmental impact statement. The Washington State Environmental Policy Act, which requires environmental impact statements, does not dictate who must prepare the documents, and gives agencies latitude for establishing their own procedures, said Richard Settle, a Seattle University School of Law professor emeritus who has written a book about that law.


Siting-council staffers said the review process involves many checks and balances. Amanda Maxwell, a spokeswoman for the council, said there are “strict requirements” to prevent any conflicts of interest, including suspending or terminating the council’s contract with its consultant if a conflict emerges.


Under state law, the siting council has several options in preparing an environmental impact assessment, including assembling its own documents, ordering an independent consultant to do so with council oversight or requiring the developers to write it under the council’s supervision.


In the case of Tesoro-Savage’s application, and several projects in the past, the siting council opted to require the proponents to write the initial draft environmental impact statement. That’s because they had to compile much of that information anyway just to file an application, said Stephen Posner, the council’s manager.


“We ask them to repackage that information, if you will,” he said. The council then uses that as a basis for developing the environmental impact statement.


Although Tesoro-Savage gets the first shot at crafting an initial draft environmental study, the joint venture won’t get the final say over whether it’s up to snuff. That’s the responsibility of the council, whose membership includes a chairperson appointed by the governor and representatives of five state agencies. But the council and its staff lean on an outside consultant, Cardno Entrix, which has previously done work for Tesoro. Cardno Entrix did not respond to phone calls and emails from The Columbian requesting comments. Before it was hired by the siting council, Cardno Entrix said in its proposal: “Our project experience includes wind, hydroelectric and thermal generation, electric transmission lines, and gas and oil pipelines. We specialize in managing large-scale, controversial projects to resolve long-standing resource conflicts in complex regulatory environments.”


‘Comprehensive proposal’

The siting council can devote only one of its nine staffers to work full time to evaluate Tesoro-Savage’s proposal. Cardno Entrix, a subsidiary of an Australia-based global company, has about 20 employees helping with the review.


Tesoro, a Texas-based petroleum refiner and marketer, has employed Cardno Entrix several times over 15 years, most recently in August.


None of the work had anything to do with the proposed Vancouver oil terminal, said Elizabeth Watters, a spokeswoman for Vancouver Energy, the Tesoro-Savage joint venture.


It “involved remediation and environmental compliance, oil spill drills and risk assessments, at several of Tesoro’s refineries, as well as for its retail arm,” she said. She wouldn’t put a dollar figure on the work, but said it lasted for two weeks to several months at a time.


As a third-party contractor, Cardno Entrix assisted the U.S. Department of State in preparing the environmental study for TransCanada’s proposed 1,700-mile Keystone KL pipeline. The pipeline would carry crude from northern Alberta, Canada, to the Gulf of Mexico. The state department’s hiring of Cardno Entrix drew criticisms of conflict of interest, given that the consultant previously worked directly for TransCanada, but an inspector general found no conflict.


Cardno Entrix also was involved in the Whistling Ridge wind energy project, a proposal to build up to 50 wind turbines on a 1,152-acre privately owned site in Skamania County. The wind farm received a green light from then-Gov. Chris Gregoire in 2012, following the recommendation of the siting council. But the decision also reduced the number of wind turbines from 50 to 35 to preserve views in the Columbia River Gorge National Scenic Area. The state Supreme Court upheld the project’s approval last year. Its construction has yet to begin.


Cardno Entrix’s involvement in the wind farm proposal included working with staff at both the Bonneville Power Administration and the siting council during preparation of the project’s impact evaluation.


Neither Tesoro nor Savage had a say in the council’s selection of its consultant on the oil terminal proposal. The council examined bids for the work from three firms, public records obtained by The Columbian show: Cardno Entrix, Ecology and Environment Inc. and Golder Associates. Out of a total possible score of 200 points, Cardno received the most, 170.6, with Ecology and Environment, and Golder clocking in at 164.6 and 129.3 points, respectively.


Cardno Entrix stood out for “the most comprehensive proposal,” including the firm’s ability to handle everything from biological assessments and geotechnical investigations to wildlife habitat mitigation plans, according to the siting council staff’s evaluation of the companies’ bids.


Tesoro-Savage pays the council for all costs linked to the oil terminal’s review. Cardno Entrix charges the council for its work. The firm’s bill so far: $248,981.


Firewalls protect against any conflicts of interest, said Maxwell, the siting council spokeswoman. She said Tesoro disclosed to the council the recent unrelated work done for it by Cardno Entrix. And Tesoro and Savage may only communicate with Cardno Entrix about the proposed oil terminal through council staff. According to its contract with the consultant, the council can fire the consultant if a conflict arises.


‘Very troubling’

That’s of little comfort to opponents of the project.


“I think it’s very troubling that a firm that was recently paid by Tesoro is supposed to act as an impartial critic of their terminal’s impacts and rail impacts to Columbia River communities and Vancouver,” said Lauren Goldberg, staff attorney for the environmental group Columbia Riverkeeper. “We feel it’s one of the greatest threats to Columbia River salmon in decades. We don’t intend to leave any stone unturned.”


The siting council may release a formal draft of the impact analysis before year’s end. When it does, the public will get at least 30 days to inspect and comment on it. The council and its consultant are still working on reviewing it, including checking for gaps and revising it as needed. However, Tesoro-Savage posted its initial draft on its Vancouver Energy website. The draft includes data-heavy reports on air and water quality, traffic, rail and marine safety, and archaeological resources, among other topics. Tesoro-Savage relied on lead consultant BergerABAM, as well as contributions from other firms, including Environ, Archaeological Investigations Northwest Inc., Analysis Group and Heartland.


The draft builds a case that, with adequate controls and equipment, the terminal will be safe and environmentally sound. Among its conclusions:


• “Significant cumulative air quality impacts are unlikely.”


• The terminal’s construction and operations would generate greenhouse gases amounting to one third of 1 percent of statewide greenhouse gas emissions in 2012.


• “It is neither practical nor feasible to meaningfully evaluate the potential climate change impacts of individual projects.”


• A tanker ship accident on the Columbia River is likely to happen twice every 1,000 years.


• The likelihood of an oil train accident is 1 in every 2.5 million ton-miles shipped.


• The planned commercial/residential redevelopment of Vancouver’s waterfront “is not viable as conceived, making an argument about the impacts to value from the proposed terminal irrelevant.”


The companies “believe the materials we’ve submitted … contain an accurate and adequate analysis of the environmental impacts discussed,” Jeff Hymas, a spokesman for Savage, said in an email to The Columbian. “A substantial amount of time, investigation and analysis went into the preparation of the preliminary draft (environmental impact statement).”


Trust the process?

It’s in a project developer’s interest to compile a thorough review, said Settle, the Seattle law professor. Slanting the environmental impact statement would expose developers to a legal challenge, he said.


“If it’s really distorting reality, it’s going to be discovered and challenged and (opponents) will win,” Settle said.


The credibility of the environmental analysis is the subject of intense debate in Vancouver. Opponents continually pack the Port of Vancouver’s public meetings, urging commissioners to scuttle the port’s lease with Tesoro-Savage. At least one critic, John Karpinski, a longtime Vancouver land-use attorney, has said “the game is rigged” at the siting council. Meanwhile, Vancouver Port Commissioner Brian Wolfe maintains that opponents should trust the process, which “should be thorough enough to ferret out all of the safety, all of the environmental issues there is to talk about.”


That remains to be seen.


“I start from a position of trusting fellow governments,” said Bronson Potter, attorney for the city of Vancouver, which opposes the Tesoro-Savage oil terminal. “But not having been through it before, I’ll have to say the proof will be in the pudding.”



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