Jay Inslee, champion of action on climate change, must decide whether to approve the nation’s largest oil-by-rail terminal
By Lauren Dake, January 12, 2015, The Columbian
A few months ago, President Barack Obama spoke to a room full of world leaders and tried to convey the importance of acting on climate change.
“We are the first generation to feel the impact of climate change and the last generation that can do anything about it,” Obama said at the United Nations Climate Summit in September.
Obama attributed the quote to an American governor: Washington’s Jay Inslee.
The first-term Democratic governor has carved out a reputation as a green-energy pioneer and the nation’s greenest governor.
Inslee recently unveiled an ambitious climate-related package that calls for taxing the state’s biggest polluters. It will face fierce opposition in the state Legislature.
But there is one decision facing the governor that is his alone to make, and some have likened it to the choice now facing Obama on the Keystone XL pipeline; Inslee will decide whether to approve the nation’s largest oil-by-rail terminal at the Port of Vancouver.
Dan Riley, the public face for the West Coast’s biggest refinery, Tesoro Corp., which is behind the proposed Vancouver project, said despite the governor’s climate-friendly reputation, Inslee has “every reason to say yes” to the terminal.
One former key player in the regulatory process, Vancouver lawyer Jim Luce, disagreed.
“I think if you’re Tesoro, you’re most worried about the governor,” Luce said.
Inslee is constrained by law and can’t say a word about the terminal until a recommendation from the environmental siting council lands on his desk.
Then he has 60 days to make a decision.
While unveiling his lofty climate package at REI in Seattle last month, Inslee subtly hit a note he’s hammered before: The green revolution is not only about the environment, but also the economy.
The state needs to kick its addiction to fossil fuels, the governor told the crowd.
“It’s not healthy for us, physically or fiscally,” he said.
In 2007, Inslee co-authored a book on the topic titled “Apollo’s Fire: Igniting America’s Clean-Energy Economy.”
The motivation behind his policies, the governor told The Columbian, “are as much economic and job creation and entrepreneurial” as they are environmental.
“I think that’s something that is lost on a lot of people,” Inslee said. “My major was economics at the University of Washington; it was not in granola or mountain flowers.”
In his book, Inslee, a U.S. congressman at the time, lauds Sweden for trying to eliminate oil use altogether and writes that he believes the U.S. should do the same.
Considering the decision now in front of the governor, there is one particularly prescient passage; it details the “thorny issues” that would face policymakers as they work to shape a “new policy agenda.”
“Not all new energy technologies answer the national goals of both energy independence and climate protection,” the passage states. “Increasing our domestic use of alternative fossil fuels by harvesting tar sands and oil shales, for example, would help improve our domestic energy security but would greatly worsen CO2 emissions.”
This is a concept climate activist KC Golden, senior policy advisor with the environmental group Climate Solutions, which opposes the terminal, seizes upon and hopes the governor will, too.
Golden compared Inslee’s decision on the proposed terminal in Vancouver to the one facing Obama’s decision on the Keystone XL oil pipeline, adding that he hopes Inslee uses what he’s coined the “Keystone Principle.”
“President Obama said last June he would reject Keystone if it significantly increases carbon pollution. This suggests a vital principle for climate action: First, stop making it worse,” Golden wrote in the Huffington Post.
Golden later told The Columbian that it’s not possible to “eliminate emissions overnight,” but it’s time to stop making long-term capital investments that “lock in dangerous emission levels.”
Personal to political
The governor’s childhood might seem like a scene depicted in an L.L. Bean catalogue, with family vacations to state parks, kids packed in the back of a 1956 Chevy station wagon, pup tents and Trapper Nelson backpacks.
Inslee learned early on that one of the best things in life “is catching a trout in a mountain lake.”
His father was a high school biology teacher, and both parents spent summers in Mount Rainier National Park, where they helped restore alpine meadows.
“I just had a very treasured growing up (experience) with my mom and dad, and I feel very fortunate,” Inslee said. “My goal now is not too philosophical or highfalutin. It’s just that I would like my grandkids to have the same experience with their children. And that’s just a very personal, if not commitment, a desire.”
It appears Inslee also passed that dedication to the environment along to his children. One of the governor’s sons worked with the National Oceanic and Atmospheric Administration on oil spill responses.
When Inslee landed at the University of Washington as a college student, he was already interested in energy, said David Fluharty, one of Inslee’s professors at the university.
“I don’t know if I can say I inculcated any particular values he didn’t already have,” Fluharty said, but “we certainly helped him develop those interests.”
Fluharty, who still teaches at the university, has kept in touch with Inslee over the years. The two traveled to the first United Nations conference on the Human Environment in Stockholm in 1972.
Inslee’s energy interests were cultivated at a time when economists started to examine additional effects of energy projects.
Projects were evaluated as something more than “just the price of oil and gas,” Fluharty said. People started to consider “what it takes to extract it and what happens when it burns. You look at all these different elements (more than just) oil and gas, and it starts to look a lot more expensive than renewables.”
A difficult decision
Seventeen days before Tesoro Corp., the refinery, and Savage Companies, a supply-chain management business, were scheduled to present their application to the oil-by-rail terminal to the Energy Facility Site Evaluation Council, which is charged with making a recommendation to the governor, the chair of the council — who had served more than a decade — resigned.
The siting council, a quasi-judicial environmental panel, was created in 1970 by the state Legislature to evaluate large energy projects. The council is tasked with considering energy and protection of the environment of the projects as well as safety.”
Luce said he decided to resign, in part, because he knew the oil-by-rail proposal for the Port of Vancouver would be one of the most consuming and complex projects the council has ever faced. The terminal would be capable of handling as much as 360,000 barrels of volatile crude oil per day. Luce, who is 70 years old, said he was ready to travel with his wife and didn’t want to spend another three or four years shackled to the project.
Bill Lynch was chosen to replace Luce as chairman of the environmental siting council after Inslee personally interviewed him.
Lynch declined to be interviewed for this article, but he told The Columbian in a previous interview that when he was appointed, the governor didn’t say “do this or that.”
Luce’s final project before retiring was the siting of the Whistling Ridge Energy Project. Despite not speaking to the Gregoire directly about the project, the Vancouver lawyer said he was aware of her position on wind projects.
“To the extent I had discretion, while following the law, I would consider the governor’s policy,” he said.
Luce knew Gregoire was “a big proponent of renewable wind sources. Unless I can find a compelling way to reject, I’m going to find a way to approve it in a way that is consistent with the environmental safeguards.”
State law gives the siting council one year to make its recommendation to the governor, who then has 60 days to approve, approve with conditions or reject the project. The council has never recommended rejecting a project outright, although it has recommended approval with restrictions. And no governor has outright dismissed the council’s recommendation.
After Inslee decides on the proposal, extensions likely will be filed. His decision could also be appealed to the state’s Supreme Court.
Luce said it’s a real possibility the council’s recommendation won’t necessarily be as black-and-white as outright rejection or lax approval.
“You want a bold stroke? Reject it,” Luce said of the governor’s decision. “You want to walk the middle line? Approve it with stringent conditions that satisfy all the community interests, and if Tesoro can build it, they build it. But with all the environmental safeguards that the community wants? Is that possible? I don’t know.”
With enough conditions tacked on, the project could likely no longer be considered economically viable, Luce said.
Riley, the vice president of government affairs for Tesoro, said the company has no backup plan if the governor rejects the proposal.
Any transition to green energy has to be gradual, Riley said, adding that in the meantime, the oil terminal will bring jobs and infrastructure.
“Some people, because of their environmental values, believe in the end of oil. They want to see us ween off fossil fuels,” Riley said. “That’s why I go back to say, this is a bridge to the energy future … . There’s going to be technology breakthroughs and we’ll see a change, but for the foreseeable future, we are still dependent.”
Transitions take time
Five years ago, Inslee said, he could not have predicted the “explosion of oil production in our country.”
“It’s happened because of enormous strides in technology,” the governor said. “And I know this sounds a little bit contrarian, but that technological change, I think, is an indication of what we’re capable of.”
That same intellectual talent could be tapped to work on innovative carbon policies and new technology, Inslee said.
But he agreed with Riley that the transition will not happen overnight.
“No one is asking people to park their cars Friday and switch to these technologies,” Inslee said.
And the jobs need to be there before making a transition.
“If we want our kids to go with their parents to a state park,” Inslee said, “we also want parents to have jobs so they can afford to have a way to get to the park and a roof over their heads when they aren’t in the parks.”