- Associated Press - Tuesday, March 4, 2014

CLATSKANIE, Ore. (AP) - A Columbia River industrial plant converted from making ethanol to shipping volatile North Dakota crude oil has been operating improperly by moving six times the volume its permit allowed, Oregon regulators say.

The company that runs the Clatskanie industrial plant disputes the allegation, saying its permit covers what it’s been doing. It is, however, seeking the new permit the Department of Environmental Quality demands, The Oregonian (http://bit.ly/1c6hpQQ) reported.

In June 2012, the agency quickly signed off on an air pollution permit change that allowed the plant to move crude from trains onto barges bound for West Coast oil refineries, saying the shift had an incidental effect on air emissions.

Now DEQ regulators say the Columbia Pacific Bio-Refinery needs a new permit to unload crude and has committed the “highest level violation” of state environmental rules by moving 297 million gallons of oil between December 2012 and November 2013 when its permit allowed 50 million gallons.

The terminal’s new proposed air pollution permit would allow it to move 1.8 billion gallons of oil annually, enough to bring in 50 trains per month.

That’s twice the number of trains it’s allowed to handle today. It can accept 24 trains a month and increase to 38 monthly if improvements are made to tracks running through downtown Rainier, where mile-long rail trains took people by surprise in late 2012.

“We didn’t know. No one knew,” said Steven Massey, a Rainier city councilman. “We knew they had over 100 cars. People were alarmed at the blockage at intersections, but we didn’t have any idea they were hauling volatile crude.”

The terminal is owned and operated by Global Partners LP, a Massachusetts company. It faces a maximum $25,000 fine for each day it operated out of compliance.

The company says it has the approvals it needs for the facility, even though it’s now seeking a new permit.

“We respectfully disagree with the position asserted by DEQ but look forward to that dialogue with them during the process,” said Ed Faneuil, Global Partners’ general counsel.

An environmental group said the state should have allowed public participation much sooner.

“These decisions about projects with major threats to our safety and salmon shouldn’t be made in private,” said Brett VandenHuevel of Columbia Riverkeeper. “We need a robust public discussion. Doing so a year and a half later is unacceptable.”

The ethanol facility was built with the help of $36 million in state aid, but the company that built it went bankrupt after producing little fuel.

Global Partners bought the plant, and officials say it also wants to restart ethanol production investing $50 million to $70 million to expand storage, improve infrastructure and hire employees. To make ethanol, the plant would need to accept about 11 trains carrying only corn each month. Those would count against the company’s forecast monthly maximum of 50 trains.

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