Wyoming’s fight to build an export terminal on the West Coast hit another legal snag Tuesday when a Washington court upheld the decision by state regulators there to block permits needed to construct the proposed export terminal.
The ruling puts a damper on Wyoming lawmakers’ hope to export more Powder River Basin coal to other countries during a time when domestic demand for the commodity wanes. If constructed along the Columbia River, the Millennium Bulk Terminal would be able to receive about 16 trainloads of Powder River Basin coal to ship to customers in Asia each day.
But on Tuesday, the Washington State Court of Appeals affirmed a state board’s 2018 decision to uphold county regulators’ denial of shoreline permits for the terminal. The development and conditional use permits are required for the Millennium Bulk Terminal’s first stage of construction.
The legal debacle specifically over the shoreline permits reaches back to 2016 when the coal company submitted its permit application with Cowlitz County — the county where the terminal would be built. Officials with Cowlitz County declined to issue the permits due to the “significant adverse environmental impacts,” cited in the environmental impact statement.
The State Shorelines Hearing Board subsequently sided with the county regulator’s decision to deny the Millennium Bulk Terminal’s permit application. In response, Millennium requested judicial review of the decision.
Tuesday’s court decision from a panel of three judges rejected Millennium’s arguments against the county’s permit decision and upheld the board’s ruling.
Multiple legal fights
The fight to erect the largest coal export terminal in North America started in 2012, when Millennium Bulk Terminal’s parent company Lighthouse Resources pitched the plan to the state of Washington.
Since then, the project has hit numerous hurdles, including the denial of a water quality permit also needed before construction can commence.
The Washington Department of Natural Resources denied the water permit on environmental grounds. The Washington State Court of Appeals in August upheld the state’s choice to deny the required state-owned land permits for the terminal last year.
In response, Gov. Mark Gordon announced in January that Wyoming would undertake legal action against Washington state over its decision to block the project.
Montana joined Wyoming in asking the U.S. Supreme Court for a hearing on the dispute. By inhibiting the construction of the largest coal export terminal on the West Coast, Washington sought to regulate interstate commerce and thereby violated the Dormant Commerce Clause and Foreign Commerce Closure of the U.S. Constitution, the two coal-producing states alleged.
To Gordon, Washington’s decision to deny the permit was politically motivated. Politicians across the country have faced public pressure to address the increasing rates of carbon dioxide in the atmosphere and curb climate change. Washington’s action came down to “a question as old as our Constitution,” regarding the rights of states to conduct commerce, according to the governor.
Gov. Jay Inslee of Washington has adamantly defended his state’s decisions to deny permits for the terminal.
Several Wyoming lawmakers consider the West Coast terminal a vital step in bringing Powder River Basin coal to international markets and have fought hard to bring it to fruition. Even with the regulatory denials, lawmakers have vowed to forge ahead in pursuit of additional coal markets.
A bill proposed during Wyoming’s recently concluded legislative session would give severance tax breaks to coal exported from Canada and Mexico. The bill passed the House and Senate and has moved to Gordon’s desk for final approval.
The vicissitudes of international markets, steep transport costs and public pressure to block coal export terminals all have left murky the prospect of reviving global coal exports for Wyoming, several analysts said. Though Wyoming leads the nation in coal production, overseas export of coal remains minimal.
Follow the latest on Wyoming’s energy industry at @camillereports
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