July 12, 2016 - 12:50 PM EDT
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Experts Tout Benefits and Commitment to Safety of Vancouver Energy

Through nearly two weeks of testimony, the state panel reviewing the proposed Vancouver Energy crude oil distribution terminal at the Port of Vancouver USA heard from numerous experts in support of permitting the project. This critically important addition to Washington’s energy infrastructure will provide $2 billion of economic value, prioritize safety at all levels of operation and meet some of the country’s strictest regulations for environmental protection and safety.

Vancouver Energy is a joint venture between Tesoro Refining & Marketing Company LLC and Savage Companies. The terminal will facilitate the safe transfer of midcontinent, North American crude oil from rail to ship, providing an essential link in the supply chain for West Coast refineries in producing the transportation fuels and other products used by American families and businesses. The project will increase U.S. energy independence and security by significantly reducing the country’s reliance on foreign oil.

More than 20 experts covering topics that included engineering, economics, marine science, rail safety and logistics testified in favor of the project in the first phase of adjudicative proceedings of the Washington State Energy Facility Site Evaluation Council (EFSEC) being held in Vancouver and Olympia. The purpose of the proceedings is to enable EFSEC to gather evidence before it makes a recommendation on the proposed terminal to Governor Jay Inslee. The second phase of the proceedings begins today.

“When you focus on the terminal, it is not really that complicated,” said Vancouver Energy attorney Jay Derr in his opening statement to the council. “It may be controversial, but it is not complicated.

“The project is not a refinery or petroleum processing facility. It is simply a transfer operation—where crude oil arrives by train, is unloaded into a storage tank and then loaded onto vessels for shipment to refineries on the West Coast.”

Other highlights from adjudication proceedings include:

Commitment to rail safety: Vancouver Energy has committed to only accepting DOT-117 or better rail cars into the terminal, testified John Hack, Senior Manager of Rail Operations for Tesoro. In 2015, Tesoro purchased DOT-120J rail cars in advance of the federal regulations specifying the transition to DOT-117s. The DOT-120J rail cars exceed the federal standard and are already in service in the state of Washington.

In addition, BNSF Railway, whose rail network would be used to transport crude oil to Vancouver Energy, said the proposed terminal would not significantly increase overall traffic on the BNSF system. Dava Kaitala, general director of construction permitting and senior environmental attorney for BNSF, also testified that the company’s commitment to safety goes far beyond federal standards. BNSF has wayside detectors on key routes, including in the Columbia River Gorge, in place every 10 miles – quadruple the amount required by the Federal Railroad Administration (FRA). The company also does visual inspections on the same key routes at least four times a week, double what the FRA requires.

Focus on vessel safety: Vancouver Energy has voluntarily committed to require outgoing vessels from the terminal to be escorted by a suitably matched tugboat, which is not required under current regulations, testified Capt. Marc Bayer, senior director of shipping operations for Tesoro Maritime. In addition, vessels arriving at the terminal will be “vapor-tight,” meaning they won’t release any emissions from the crude oil because of the secure oil delivery system and the design of the vessels. Further, between the Vancouver terminal and the mouth of the Columbia River in Astoria, Oregon, the vessels will be under the control of experienced, licensed river pilots with extensive knowledge of the river, Bayer said.

Positive economic impact: Todd Schatzki, vice president of the Analysis Group, testified that the proposed Vancouver Energy terminal would provide family-wage jobs throughout the Southwest Washington region. According to Schatzki, an expert in energy and environmental economics, the combined effects of the construction and operations of the project would yield an average of more than 1,000 jobs a year over the assumed 16-year construction and operation period. The cumulative impact of the terminal would include nearly $1.6 billion in labor income and more than $2 billion in economic value added to Clark County and surrounding communities, Schatzki said.

Need for the project: The terminal is necessary because it provides a flexible way to meet growing demand for petroleum until alternative fuel sources are viable and widely available, testified Brad Roach, senior director for market analysis and senior economist at Tesoro. It would not increase demand for petroleum, but would help meet the demand that already exists. In the six-state region that Vancouver Energy would serve (Washington, Oregon, California, Nevada, Arizona and Alaska), petroleum provides 95 percent of the energy for transportation fuels, including gasoline, diesel and jet fuels.

The terminal would provide an economy of scale to allow West Coast refineries to more efficiently access domestic crude oil from U.S. producers, Roach said. This, in turn, increases U.S. energy independence and its competitiveness against oil from foreign countries, helping gasoline consumers in Washington and other Western states.

“If you’re able to bring in 300,000 barrels a day of U.S. crude (to Vancouver Energy) and displace 300,000 barrels a day of foreign crudes, that has a pronounced impact on the pricing mechanisms those (foreign) countries have to price crude,” Roach testified. This leads to a reduction in crude costs that translates through to the economy and benefits the consumer, he added.

Safety mechanisms in place: The Vancouver Energy terminal will contain state-of-the-art spill response equipment, including equipment that is already pre-staged along the Columbia River even though the terminal isn’t built yet, testified Eric Haugstad, director of contingency planning and response for Tesoro. The terminal is designed to withstand a 9.0 magnitude earthquake. In addition, the double-bottomed oil storage tanks include equipment designed to detect hydrocarbons to prevent a leak from getting through the bottom of the tank, providing added protection against spills, Haugstad said.

Dr. Elliott Taylor, a marine scientist at Polaris Applied Sciences, testified Washington has some of the most stringent requirements on oil spill prevention and response preparedness in the U.S. and around the world, and the proposed Vancouver Energy terminal meets all those requirements.

Keith Casey, Tesoro’s Executive Vice President, Operations, and a member of the Vancouver Energy management committee, testified about the joint venture’s commitment to safety. Every person at the site will have stop-work authority. This means that every worker, no matter their role, has the obligation to stop the operations if they observe an unsafe condition, Casey said.

Casey also explained the benefits of the facility, stating that refineries in Washington will have increased access to North American crude oil and, because the West Coast functions as a market, the terminal will increase availability to benefit the entire region.

Testimony will continue through the week of July 25. For more information about the proposed Vancouver Energy terminal, visit www.VancouverEnergyUSA.com.

Vancouver Energy Media Relations
Christina Barbee, 210-626-7702
[email protected]

Source: Business Wire (July 12, 2016 - 12:50 PM EDT)

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