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.
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