Port of Vancouver Wins Terminal Lawsuit

By Mark Edward Nero

A Superior Court Judge on Jan. 10 ruled against three environmental groups that have been trying to stop the Port of Vancouver, Washington from moving forward with a proposed 42-acre oil-handling terminal.

The three groups – Columbia Riverkeeper, the Northwest Environmental Defense Center and the Sierra Club – sued in October 2013 to stop the project, maintaining that its 10-year, $45 million lease was approved before an environmental study had been conducted.

Judge David Gregerson dismissed the claim, but also said the environmental groups are still allowed to continue pursuing a separate complaint, which alleges that the port violated the Washington state open meetings laws by conducting a “secret” meeting to discuss the lease last July 22.

Gregerson’s decision against the environmental groups is eligible to be appealed, but on the day of the ruling, Columbia Riverkeeper Executive Director Brett VandenHeuvel would not comment on whether the groups would appeal the decision. The port’s legal representative, however, said Vancouver intends to adhere to the stipulation regarding the July 22 executive session conducted by the Commission.

“We understand the court’s desire to allow the plaintiffs time to pursue limited additional evidence,” port attorney Lawson Fite of the Markowitz, Herbold, Glade & Mehlhaf firm, said. “We intend to work with the plaintiffs to provide the necessary information in an efficient manner.”

The project in question is a joint proposal by petroleum products company Tesoro Corp. and supply chain solutions business Savage Companies, a to develop and operate a new 120,000 barrel-per-day (bpd) crude-by-rail unloading and marine loading facility at the Port of Vancouver.

The Tesoro-Savage joint venture would own the crude unloading and marine loading facilities and enter into a land lease agreement with the port for an initial 10-year period. Savage would oversee and manage the design, construction and operation of the facility on the joint venture’s behalf.

The deal, which was approved by the Port of Vancouver Board of Commissioners last October, is still subject to approval by state regulatory agencies.

“The port will continue to work collaboratively with the environmental community and other stakeholders as the Tesoro-Savage project is reviewed,” port Executive Director Todd Coleman said in a statement.

Port of Vancouver Oil Terminal Lease Approved

On July 23, the Port of Vancouver USA’s Board of Commissioners unanimously approved a 10-year lease for a crude oil handling facility at the port. The approval came after a series of five public workshops over a ten-week period dealing with issues related to crude oil as well as information specific to this proposal.

The project, proposed by longtime port tenant Tesoro in partnership with the logistics company Savage, is expected to bring North American crude oil to the port by rail, where it would then be transferred to marine vessels for transport to refineries in California, Washington and Alaska.

With the lease approval, the project now moves into the environmental permitting process. Washington State’s Energy Facility Site Evaluation Council is to act as the lead agency for local and state permits, and the companies will work through an extensive process to address local, state and federal requirements.

The Tesoro-Savage Joint Venture, or TSJV, would lease about 42 acres of port property to accommodate a rail unloading facility, storage tanks and a vessel loading area. The estimated capital investment by TSJV is $100 million, and revenue to the port is expected to exceed $45 million over the 10-year lease period.

When operational, the terminal would be capable of shipping up to 360,000 barrels of crude a day, with up to four trains arriving daily from North Dakota and Canada. The port also says the facility is expected to create between 80 and 120 permanent jobs and 250 temporary construction jobs.

In the weeks and months leading up to the vote, the proposed terminal had drawn the support of business and labor leaders and the opposition of environmentalists and others who expressed concerns about the project’s safety and potential impact on climate change.

Although the three-member commission acknowledged that the contentious issue would likely not sit well with a substantial portion of the local community, all three said they felt the project was in the port’s best interest.

Tesoro, Savage Planning Vancouver USA Rail Facility

Petroleum products company Tesoro Corp. and Savage Companies, a supply chain solutions business, have formed a joint venture to develop and operate a new 120,000 barrel-per-day (bpd) crude-by-rail unloading and marine loading facility at the Port of Vancouver, Washington.

 The deal is subject to approval by regulatory agencies and the port commission, but if all hurdles are cleared, the Tesoro-Savage Joint Venture would own the crude unloading and marine loading facilities and enter into a land lease agreement with the port for an initial 10-year period.

Port of Vancouver USA CEO Todd Coleman called the Tesoro-Savage joint venture “an ideal fit” for the port.

“This project aligns with our strategic goals and our mission to provide economic benefits to our community through leadership, stewardship and partnership in marine and industrial development,” he said. “The port will benefit from Tesoro’s and Savage’s shared expertise and we look forward to working with them to help support the local economy by further diversifying our cargo handling capabilities.”

Under the plan, Savage would oversee and manage the design, construction and operation of the facility on the joint venture’s behalf. Tesoro and Savage have already operated in close partnership for almost ten years on the West Coast.

“We are pleased to be partnering again with Savage,” Tesoro President and CEO Greg Goff said in a statement. “Building upon the recent success of the rail unloading facility at our Anacortes, Wash., refinery, where we have been delivering mid-continent crude oil ... this project is the ideal next step.”

Savage President and COO Kirk Aubry said his company was looking forward to bringing crude oil destination services to the Port of Vancouver. “This partnership solidifies Savage’s position as a leading provider of services in the crude-by-rail market to refiners, producers and marketers,” he said.

The facility, which is expected to be operational in 2014, could cost between $75 to $100 million to build according to the companies, and would be designed to handle an estimated initial volume of 120,000 bpd with potential near-term expansion capability to 280,000 bpd.