By John Gillie, April 24, 2014, The News Tribune
A multinational consortium of energy, chemical and investment concerns is planning the largest financial investment — $1.8 billion — ever made to create a Tacoma industrial facility if the Port of Tacoma Commission next week grants it a long-term lease on a key Tacoma Tideflats tract.
Northwest Innovation Works is proposing to build a plant to convert natural gas into methanol on the former site of the Kaiser Aluminum smelter near the port’s Blair Waterway.
The methanol in liquid form would be exported in tankers to Asia from a wharf on the port’s busiest industrial waterway. Those tankers would deliver most of their cargo to China, where the methanol would be used as a basic feedstock to create plastics.
The new plant, which would take five or more years to plan and build, would require 1,000 construction workers to create and would employ more than 200 employees to operate when it opens in 2019, according to Northwest Innovation Works.
The plant would be built in two phases, one costing about $1 billion and the second about $800 million. The second phase would follow the completion of the first immediately.
“I think it’s just a wonderful proposal,” said Tacoma port commissioner Connie Bacon Wednesday. “It’s good for jobs; it’s good for the port’s finances. It looks to be a very safe use of the property.”
Commission President Clare Petrich was more cautious.
“I think it’s an interesting proposal,” she said. “It looks like a good possibility if it can clear all of the environmental and financial hurdles.”
The port’s last prospective tenant for the Kaiser site, Targa Sound Terminal, backed out of its proposal last year after finding the fuel storage and distribution facility it proposed for the land wasn’t financially feasible.
Northwest Innovation Works is proposing an initial 18-to-24-month permitting and feasibility phase of its lease with the port to allow it to more carefully study the site and to seek environmental permits for the plant. The consortium would pay the port a reduced rent during that period when it wasn’t yet producing any methanol.
The company, an alliance among the Chinese Academy of Science, BP, Dalian Xizhong Island Petrochemical Park, and H&Q Asia Pacific, an American investment firm, was the winner among three companies that proposed new industrial uses for the former smelter site. After Targa exited its exploratory lease, the port had sought new proposals for the key industrial site.
Bacon said Northwest Innovation Works’ proposal was far superior to the two other plans for the site both in investments made in the property and the number of jobs that would be created.
The company isn’t seeking any incentives to locate its plant in Tacoma.
The Tacoma site isn’t the only site where Northwest Innovation is planning a gas-to-methanol plant, said Charla Skaggs, a spokeswoman for the company. The company also is planning similar facilities at the Port of Kalama, on the Washington side of the Columbia River and at Port Westward on the Oregon side of the Columbia.
The three developments are being driven by the abundance of relatively inexpensive new natural gas discoveries in the United States and Canada, said Skaggs, and by the Chinese desire to reduce pollution in their country.
Chinese plastics manufacturers now use methanol produced from coal or petroleum to feed their plants, she said. Using methanol made from natural gas would cut total emissions from the production process by 70 percent, Skaggs said.
Port of Tacoma Commissioner Don Johnson said one of the attractions of the methanol plant proposal is that the plant won’t put many new strains on the local infrastructure.
Natural gas would be delivered to the plant via a pipeline branch from an existing gas pipeline that follows Interstate 5. Unlike oil or coal export facilities, which have created significant new rail traffic in the area, the new plant would create no major truck or train traffic.
Skaggs claimed that the plant would be relatively nonpolluting, emitting mostly water vapor from its processes. About 30 percent of the natural gas entering the plant from the pipeline will be used to power plant processes, she said. That use of natural gas for plant processes will create emissions which will be the subject of permitting and regulatory controls.
Water used in the methanol production process, she said, would be recycled an average of 15 times.
Methanol would be stored on the plant site in three large and six smaller tanks, according to preliminary plans for the facility.
Skaggs said that the plant would employ advanced spill detection and control devices. If methanol somehow were to enter the environment, she said, its effects would be relatively small because it is soluble in water and it is biodegradeable in the ground.
Tacoma Fire Department spokesman Joe Meinecke said the department is just beginning its study of measures it would require to ensure the plant won’t be a fire or explosion hazard. Methanol, which is used in such common products as windshield washer fluid, race car fuel and solvents, is a flammable liquid, and appropriate safeguards would need to be incorporated in the plant to handle accidents, he said.
Bill Anderson, executive director of Citizens for a Healthy Bay, said Wednesday that the environmental organization is aware of the proposal. “We have not yet studied it in depth.”
Port commissioner Johnson said he’s confident that any environmental issues could be mitigated using appropriate technology.
“What’s important to me is that this project will produce jobs, put land back on the tax rolls and diversify the port’s business,” he said.
The Port of Tacoma faces new competition in the container importing business, traditionally the cornerstone of its business, from cargo consolidation and the use of larger ships.
The highlights of a proposal by Northwest Innovation Works, a Chinese-British partnership, for a natural gas-to-methanol plant on the former Kaiser Aluminum smelter site on the Tacoma Tideflats.
Cost: $1.8 billion total. First phase, $1 billion; second phase, $800 million
Production: 1.8 million metric tons of methanol per phase annually
Construction jobs: 1,000 at peak employment
Operations jobs: 200-plus when both phases are operating
Ancillary employment: Longshore and tug company workers to handle tankers, pipeline construction workers to build natural gas pipeline extension.
Planning and study: 18 to 24 months.
Construction: 3.5 to 4 years to finish both phases.
Ship traffic: Two tankers weekly at full production carry methanol to Asia
PORT MEETING DETAILS
The Port of Tacoma Commission is tentatively scheduled to consider a lease with Northwest Innovation Works for a methanol plant at its next regular meeting. The public can comment on the proposal before the commission votes on the lease deal.
When: Noon, May 1
Where: Fabulich Center, Room 104, 3600 Port of Tacoma Road, Tacoma