Fuel Project Lease Ended

By Karen Robes Meeks

The Port of Vancouver USA and Vancouver Energy have ended their Terminal 5 lease early, weeks following Gov. Jay Inslee’s January rejection of the project.

Vancouver Energy, whose proposed project involved bringing up 360,000 barrels per day of North American crude oil by rail to the port for ships bound for Alaska, California and Washington refineries, chose to terminate the lease a month early and give its March lease payment to nonprofits.

“This agreement with the port to end our lease a month early makes it possible for Vancouver Energy to contribute the March lease payment amount of $100,000 to support worthwhile community causes through our donor-advised fund in partnership with the Community Foundation for Southwest Washington,” said Jared Larrabee, Vancouver Energy general manager. “While the outcome of our project isn’t what we had hoped, we have worked closely with the Port of Vancouver USA for more than four years and appreciate the opportunity to conclude this effort on a positive note and in a way that benefits the community.”

Port CEO Julianna Marler said the port appreciates the generosity of Vancouver Energy and their approach to this process.

“Vancouver Energy and Jared have been very strong partners,” she said. “The (Energy Facility Site Evaluation Council) process took a lot longer than we anticipated. We worked very well together and came up with some creative solutions, and I just want to express my appreciation for their partnership and hard work.”

Washington Governor Rejects Oil Terminal

By Karen Robes Meeks

The site certification application for the Vancouver Energy project at the Port of Vancouver USA was rejected Monday by Washington Gov. Jay Inslee.

Inslee concurred with the Energy Facility Site Evaluation Council’s (EFSEC) earlier recommendation to reject the application.

“After considering all of the evidence in the record, the Council found that the risks of siting the proposed project at the Port of Vancouver exceeded the project’s potential benefits and determined that the application is not in the public interest,” Inslee wrote in a letter to EFSEC Chair Kathleen Drew.

After the council rejected the application, the port was not surprised by the governor’s decision, said port CEO Julianna Marler. “Our mission continues to be providing economic benefit to our community through leadership, stewardship and partnership in marine, industrial and waterfront development,” she said. “We appreciate the Governor’s recognition of our important role in regional trade and we will continue to fulfill that role.”

The project—a joint venture between Andeavor, formerly Tesory Corp. and Savage Companies—would involve building and operating a terminal that could take up to 360,000 barrels of crude oil delivered daily by rail and store it before transferring it onto vessels bound for West Coast refineries, where it would become transportation fuel and other byproducts for US consumers.

Vancouver Energy Faces Lease Loss

By Karen Robes Meeks

The Port of Vancouver USA’s Board of Commissioners recently voted 3-0 to give notice to Vancouver Energy, a joint venture between Andeavor (formerly Tesoro Corp.) and Savage Companies planning to build a $210 million terminal at the port. The company must get the necessary licenses, permits and approvals to operate by March 31 or face lease termination.

The proposed terminal would take up to 360,000 barrels of crude delivered daily by rail and store it before transferring it to vessels going to West Coast oil refineries, where it would become transportation fuel and other products for US consumers. When fully operational, the business would have the potential to generate $2 billion for the local and regional economy and “uniquely positions Washington to bring lower-carbon fuels to the West Coast,” according to Vancouver Energy’s website. The project, which has been under review by the Energy Facility Site Evaluation Council (EFSEC) since August 2013, received a setback December 19 when the council announced it would recommend that Gov. Jay Inslee deny the project.

“It’s gratifying to have our commission be united in its vision for the future of the port and community,” said Commission President Eric LaBrant. “We still await the governor’s decision on the project and we continue to be focused on supporting businesses, growing jobs and providing benefit to our community.”

Commissioner Jerry Oliver, a longtime supporter of the project and the EFSEC review process, said he was aware of the council’s rejection, but still sees a way forward. “I believe that when the decision on the oil terminal is behind us, in five years or ten years, the port will still be doing great things for the benefit of the community,” he said.

Vancouver USA Extends Terminal Development Contract

By Mark Edward Nero

On April 15, the Port of Vancouver USA Board of Commissioners unanimously approved an extension of the port’s lease with Vancouver Energy, the developer of a proposed oil transfer facility at the port.

The amendment extends Vancouver Energy’s permitting contract to March 31, 2017, with automatic three-month extensions after that date unless either party provides written notice of termination.

By next March, both parties would have to be satisfied that conditions such as permits to operate and environmental baseline work are met. If either party isn’t satisfied that these conditions are met on or before the end of the contract, the lease can be terminated.

If no action is taken, the lease continues for another three months.

The amendment approved last week also increases the contingency period fee from $50,000 to $100,000 per month, starting May 1; eliminates the opportunity for Vancouver Energy to operate a second petroleum-by-rail facility at the port; and provides Vancouver Energy 30 months to resolve any appeals if licenses, permits or approvals are granted and appealed.

The amendment also allows the port to use the leased area during the extended contingency period; and stipulates that oil moved through the facility must be “pipeline grade” and destined for domestic ports.

“I think we’ve ended up with a compromise that allows us to continue through the EFSEC process, but with some defined ending,” Vancouver Port Commissioner Brian Wolfe said.

Vancouver Energy’s proposal is moving through the Washington state Energy Site Evaluation Council (EFSEC) process. The Evaluation Council began reviewing the project in August 2013 and is expected to make a recommendation to Gov. Jay Inslee, who makes the final decision on the project, late this year or early 2017.

Vancouver USA Settles Document Lawsuit

By Mark Edward Nero

The Port of Vancouver USA on Aug. 5 settled a lawsuit that contended a version of a Vancouver Energy lease provided by the port in response to a public records request was excessively redacted.

As part of the settlement agreement, the port lifted all but three redactions on the lease document and paid $45,000 to limit further legal costs.

Vancouver Energy is a partnership between oil refiner Tesoro Corp. and transport firm Savage Companies. In April 2013, the companies announced a plan to build a major terminal for receiving oil by rail and transferring it to ships, which would take it to West Coast refineries.

The Clark County Natural Resources Council filed the lawsuit after it received a heavily redacted document from the port in response to a May 2014 public records request.

Under the settlement, the plaintiff has agreed to waive all statutory penalties and will dismiss their claim with prejudice, meaning the claim can’t be resurrected against the port in the future.

In a statement, the port said it provided the redacted copy in May 2014 “to protect information that, if made public, ran a high risk of harming the port’s ability to compete and generate economic benefit for the community.”

“It’s now been two years since the Vancouver Energy lease was first approved,” port CEO Todd Coleman said. “We’re now at a point where we feel releasing this information is important for transparency, and poses little risk to the port’s ability to remain competitive.”

The 429-page Vancouver Energy lease can be seen at http://www.portvanusa.com/assets/TSJV-Lease-10232013-RevRedactions-073015.pdf