Opportunity to possibly opt out of contract could arise
By Aaron Corvin, May 19, 2015, The Columbian
In discussions of its lease for what would be the nation’s largest rail-to-marine oil transfer terminal, the Port of Vancouver has not disclosed the deadline for two companies to secure permit approvals to build the project. But if the companies don’t obtain the necessary state and federal permits on time, it would create an opportunity for the port to opt out of the contract.
Now, an environmental group says it has an estimate of the deadline for permits, known as the conditions precedent outside date. It also says that Tesoro Corp. and Savage Cos. may not be able to meet it, and that the port, under state law, must discuss and decide what to do about it in meetings open to the public.
Whether the port decides to terminate the lease or “to ignore Tesoro and Savage’s inability to meet the deadlines in the lease, that decision should be made by a vote of the commissioners in an open public meeting,” according to a May 18 letter to the port from Miles Johnson, clean water attorney for Columbia Riverkeeper. The environmental organization sent a copy of the letter to The Columbian.
Abbi Russell, a spokeswoman for the port, said in an email to The Columbian that she was looking into questions asked by the newspaper in light of the letter but that it was unlikely she would be able to respond by the newspaper’s deadline. She provided no additional response by the end of the workday.
In an email to The Columbian last week, Jennifer Minx, a spokeswoman for Tesoro, said the company believes the oil-handling facility will win approval. “Though it’s taken much longer than initially expected, Tesoro remains committed to the (Washington state Energy Facility Site Evaluation Council) process and believes it will demonstrate the Vancouver Energy terminal can be built and operated in a safe, environmentally responsible manner while bringing economic and energy security benefits to Washington state and beyond.”
Columbia Riverkeeper’s letter to the port comes as the proposed oil terminal undergoes an environmental impact analysis by the state Energy Facility Site Evaluation Council. Tesoro, a petroleum refiner, and Savage, a transportation company, operating as Vancouver Energy, want to build a facility receiving an average of 360,000 barrels of crude per day.
The companies must obtain permit approvals, including from the evaluation council and from the U.S. Army Corps of Engineers for in-water work. For its part, the evaluation council is expected to issue a draft impact analysis in July. The public would then have an opportunity to comment on it.
Eventually, the council will make a recommendation to Washington Gov. Jay Inslee, who may approve or deny the project, or send it back to the council for more work. The outcome may be appealed to the state Supreme Court.
Although the port “has kept the precise” deadline for the companies to obtain all necessary permits “secret,” according to Columbia Riverkeeper’s letter, documents released by the port “strongly suggest” the deadline “will be Aug. 1, 2016 — 36 months after the lease’s effective date.”
Whenever the deadline “will actually fall, that date is approaching and the state and federal permits that Tesoro and Savage need are nowhere near complete,” according to the letter. “The Port of Vancouver should begin considering — publicly — how it will respond if Tesoro and Savage violate the Conditions Precedent Outside Date.”
Under the state’s Open Public Meetings Act, the letter says, any discussions, deliberations or communications by two or more of the port’s three elected commissioners about whether to terminate the lease “may only be taken in open public meetings, and not in executive sessions, as none of the OPMA’s narrowly-tailored exemptions would apply.”
And any decision to terminate the lease, ignore the companies’ inability to meet deadlines or to waive conditions precedent “should be made by a vote of the commissioners in an open public meeting,” according to the letter.
Port commissioners unanimously approved a lease with Tesoro and Savage in 2013. A lawsuit filed by Columbia Riverkeeper, Sierra Club and Northwest Environmental Defense Center alleges the port violated the state’s open public meetings law in approving the contract. The port denies wrongdoing.