Port of Kalama announces lease for proposed methanol facility will end

Company behind project says current “regulatory and political landscape” stopped work to build facility

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The proposed $2 billion methanol production facility in Kalama is likely out of gas as the city’s port says the project backers will end their lease.

On June 11, the Port of Kalama announced it had received word from Northwest Innovation Works (NWIW), who planned to terminate its lease of port property. In a release from NWIW themselves, the company pointed to the January denial of a key permit by the Washington State Department of Ecology as the reason for its decision, stating the regulations have “become unclear and unpredictable.”

NWIW’s release stated the company was “temporizing its development activities to assess the new regulatory and political landscape and determine an appropriate path forward.”

The company — which planned to build a facility that would produce methanol from methane that project backers said would be used for plastics manufacturing in China — stated it would “remain committed to addressing the global climate challenge,” while creating economic growth, and would continue to develop on net-zero pollution projects.

In its own statement, the Port of Kalama said the decision to end the lease effectively ended efforts to develop the plant. The port said benefits of the project would have included 1,400 construction and 200 permanent jobs, millions in tax revenue, and reduced global greenhouse gas emissions due to making methanol from natural gas as opposed to coal.

Port officials pointed to the state’s regulatory and political environment as a hindrance to the project that would have brought “local, sustainable jobs just when the need is the greatest.”

“This was the kind of innovative, job-creating project that originally was supported by the Governor’s office. Jay Inslee stood on Kalama’s waterfront to tout the climate benefits of the project, then turned on us when he ran for president,” Port of Kalama Director Mark Wilson said in the port’s statement. 

Inslee eventually reversed course on backing the plant in 2019.

“In the early days of (the Kalama project,) I said they could help reduce greenhouse gas emissions as we transition to cleaner energy sources,” Inslee said in a prepared statement at the time, “but I am no longer convinced that locking in these multidecadal infrastructure projects are sufficient to accomplishing what’s necessary.”

First announced in 2014, the facility has faced permitting issues for years, with Ecology’s January 19 decision to deny a Shoreline Conditional Use Permit for the project being the last straw for project backers. The department said that if built, the facility had the potential of preventing Washington from meeting greenhouse gas emission limits set by the state Legislature last year, and could have used out-of-state offsets for its mitigation plans. 

The proposed facility would be tied to 4.8 million tons of carbon emissions annually, according to Ecology’s analysis, most related to activities outside of the plant’s operation itself, including the extraction of methane to use in the plant’s production, as well as the uses of methanol in Asia. The department noted that though the facility had the potential to have less greenhouse gas emissions than other sources of methanol, “constructing the new facility would not actually decrease emissions.”

“The known and verifiable emissions from the facility would be extremely large and their effects on Washington’s environment would be significant and detrimental,” Ecology Director Laura Watson wrote in a statement included in the announcement of the permit denial.

“All the state has accomplished is to encourage more severe greenhouse gas emissions outside the borders of Washington and declare a false climate victory,” Wilson said in the port’s statement. The port stated the project went through “an unprecedented series of environmental studies.” The January denial followed the second of two supplementary environmental studies for the project.

“We’ve lost an opportunity to become a global showcase for innovation and environmentally conscious manufacturing in Washington,” Port of Kalama Commission President Randy Sweet said in the port statement. “Unfortunately, this is part of a larger pattern of the unwillingness to listen to differing opinions and find common-sense, balanced solutions.”

The port stated NWIW spent tens of millions of dollars to address concerns from state permitting agencies, “which shifted constantly over the course of the process.” 

“NWIW did everything right, and their understandable decision to pull out of this project is a real loss for families trying to make ends meet, the future of economic development in our state and our environment,” Port of Kalama Commissioner Troy Stariha said in the statement. 

Port and economic development officials were concerned about the broader implications that the project’s demise has.

“This project would have brought manufacturing jobs back to the U.S. from China and significantly lowered a host of environmental impacts,” said Cowlitz Economic Development Council President Ted Sprague in the port’s statement. “The reduction in global greenhouse gases would have been greater than the GHG emissions of Seattle. If not a project with benefits like this, then what is good enough?”

 

“Victory” for environmental groups

Following the port’s announcement, groups opposed to the facility heralded the end of NWIW’s lease as a victory for environmental activism.

“Kalama was a disaster waiting to happen, so this is a crucial victory for our climate and the people and wildlife along the Columbia River,” Center for Biological Diversity Senior Attorney Jared Margolis said in a joint statement along with other groups in opposition. “We need to move away from these climate bombs that would lock us into an unsustainable future and pollute the air and water we all need to survive.”

In an interview with The Reflector, Columbia Riverkeeper Executive Director Brett VandenHeuvel said the project’s process followed a similar pattern to other fossil fuel-related developments his organization has opposed, where a company comes in, local residents raise concerns and a long fight against the project ensues.

“I think the science and policy decisions around fracked gas are showing that it’s not acceptable to a clean energy future,” VandenHeuvel said. 

Opponents said the project would likely source its methane from fracking.

VandenHeuvel said one of the major changes in perception of the facility happened when project backers began promoting the methanol produced would be used as fuel in Asia, contrary to initial claims that it would be strictly for plastics production. 

“To the state’s credit, they evaluated all of the new evidence and came down with what I think is the right decision,” VandenHeuvel said. 

He also gave credit to Kalama and Cowlitz County residents for rallying against the now-shelved facility.

“It’s truly inspiring what the Cowlitz County residents accomplished,” VandenHeuvel said.

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