Gateway Pacific: the Zombie Terminal by Terry Wechsler

Gateway Pacific: the Zombie Terminal

by Terry Wechsler

Some progressives now refer to the proposed Gateway Pacific Terminal, or GPT, as “The Zombie Terminal,” because it Just.Won’t.Die.

The public stabbed the coal terminal in the heart roughly 14,500 times with substantive comments on the scope of the environmental impact statements (EIS) being conducted in accordance with the State and National Environmental Policy Acts (SEPA and NEPA).

The Lummi Nation attempted a decapitation with its Jan. 15, 2015 letter to the U.S. Army Corps Engineers (the Corps) in which Chairman Tim Ballew asked the federal government to immediately deny permits in accordance with the Treaty of Point Elliott of 1855.¹

The coal industry has tried to parry these blows with breathtaking brazenness by messaging on behalf of the economically disadvantaged Crow Tribe in Montana which happens to control one of the largest reserves of low sulfur coal in the nation. This fairly transparent and self-serving strategy has been surprisingly effective with political officials.

The Real Players

The National Mining Association created the Count on Coal Montana campaign which has recast the issues and characters and carefully orchestrated stakeholders to get on message. In a March 11, 2015, press release,² the campaign quoted various spokesmen of the Montana coal industry who referred to GPT as “The Crow Terminal” (Count on Coal Montana and Montana Coal Council) and “The West Coast Crow Terminal” (Montana Contractors Association and Montana Chamber of Commerce). The groups’ website, however, does not list the Crow Tribe as a member.³

A self-described “grassroots campaign,” Count on Coal Montana’s members include cities and county commissions across Montana, business groups including the Montana Coal Council and labor organizations. Conspicuously absent from its supporters is the Crow Tribe.⁴

The notion that Montana’s taxing authorities, business organizations and labor unions support the permitting of GPT to benefit a Montana tribe is the latest salvo in a multi-pronged campaign invoking both the U.S. Constitution’s Article One’s “Dormant Commerce Clause” and the Fifth Amendment’s “takings provision.”

The Zombie Fights Back

Montana’s legislature recently approved $1 million in seed money for a litigation fund in the event Washington dared to invoke SEPA and deny permits for GPT.⁵ Perhaps the most aggressive action to date was the introduction by Montana’s U.S. Sen. Steve Daines, a Republican, of an amendment to the 2016 national defense budget. If passed, SA 1809 would require the Corps to complete an EIS before making a determination under the Treaty of Point Elliott.^{6       -continued below-}

Cue Entrance of the Swamp Thing⁷

Amendments to a defense budget are a common way for congressmen to promote their pet causes and fund pork barrel projects. The original House version of the current spending bill, HR 1735, now has over 500 amendments attached, most of which will no longer be attached when the joint budget bill emerges from Congress heading to the president for signature. Off the record, two Washington insiders said the Baines Amendment is unlikely to see daylight, but deep in the swamps of Washington, D.C., there still currently lurks the following text:

“At the end of subtitle E of title X, add the following:

“SEC. 10__. CORPS OF ENGINEERS PROJECT REVIEW PROCESS. The Corps of Engineers shall not make any determination regarding usual and accustomed fishing places in connection with the Gateway Pacific Terminal project until after the Corps issues a final environmental impact statement required under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) that analyzes the potential impacts from the construction and operation of the proposed project required by the `Memorandum For the Record, U.S. Army Corps of Engineers Scope of Analysis and Extent of Impact Evaluation for National Environmental Policy Act Environmental Impact Statement’ (dated July 3, 2013).”

Sen. Daines’ communication director, Alee Lockman, said the senator introduced the amendment to benefit the Crow Tribe in response to an email asking who requested that action. Was this the senator’s official position, that the Crow Tribe had asked him to abrogate the Lummi Nation’s sovereign tribal treaty interests? An email asking this question yielded this answer from Lockman: “[T]hrough conversations with numerous stakeholders, Steve has learned about the importance of this project and the issues affecting its potential construction.” [Emphasis added.]

What the Crow Tribe Actually Requested

In a Jan. 20, 2015, letter to the Corps, Crow Chairman Darrin Old Coyote asked the federal agency to consider the tribe an interested party. Expressing concern about the possibility of immediate Corps action in response to the Lummi Nation’s request, Old Coyote also asked Corps regional commanders to act as a “convener to facilitate a dialogue with affected tribes.”

District Commander Col. John Buck, responding for the Corps in a letter of March 10, 2015, acknowledged meeting with Crow tribal leadership and staff in Montana and touring the existing Spring Creek Mine. Buck pledged to consult with the tribe throughout the permit review process for GPT. He declined, however, to facilitate dialogue with the Lummi Nation and suggested the Bureau of Indian Affairs (BIA) might be the more appropriate agency to do so.

The Bellingham Herald reported on March 23 that the Lummi Nation did host members of the Crow Tribe earlier that month. Without discussing the nature of the talks, Lummi Chairman Tim Ballew told Herald reporter Ralph Schwartz in a March 19 email that the Crow Tribe’s request to the Corps was “not a setback to … an explicit treaty fishing right that the Corps needs to respond to.”

“The Cloud Peak Terminal?”

Is the Crow Tribe one of the “numerous stakeholders” who encouraged Sen. Daines to interfere with the Lummi Nation’s sovereign treaty right? Or was it more likely Cloud Peak Energy and other members of the Count on Coal Montana campaign?

Coal mining giant Cloud Peak entered into an exclusive contract in January 2013 to mine coal on the Crow Reservation, according to the company’s latest Annual Report. Its option to mine up to 1.4 billion tons of coal there is subject to BIA approval and being granted the necessary permits. The report also states that there is “significant risk and uncertainty” given that extraction forecasts are not based on “proven and probable reserves.”⁸

Cloud Peak has other option contracts as well. The company entered into an agreement with Ambre Energy on Aug. 29, 2014, to option up to 7.7 million metric tons per annum (mmta) of coal through the proposed Millennium Bulk Terminal in Longview in Washington. The company’s annual report notes it has a February 2013 option with SSA Marine for up to 17.6 mmta throughput at the proposed GPT. A September 2014 press release, however, stated that the Ambre Energy option positioned Cloud Peak “to meet anticipated future growth in Asian thermal coal demand.”⁹

That would be consistent with the fact that Cloud Peak reports it has never exported more than 4.7 million tons — or 4.3 mil. metric tons — to Asian markets. The Ambre Energy and SSA Marine contracts, combined, would represent more than a 500 percent increase in Asian exports for Cloud Peak, an aggressive position not described in its annual report.

That it is Cloud Peak, and not the Crow Tribe, messaging GPT as “The Crow Terminal” is bolstered by this statement on page 3 of the company’s annual report:

“Cloud Peak Energy continues its membership with the Alliance for Northwest Jobs and Exports and Count on Coal Montana. These groups aim to educate and inform communities and policy makers about the substantial economic and social benefits that additional export-loading facilities would bring to Washington, Montana and Wyoming as we work to overcome opposition to U.S. coal exports.”

Why Opposers Need Educating

There is more at stake than just the federal permits if the Corps agrees with the Lummi Nation that GPT poses more than a de minimus impact to their treaty right to fish in usual and accustomed waters. While the inevitable appeal of that decision works its way through the courts, the next obvious question is whether the state and county would halt their joint environmental impact review or whether they would complete their joint EIS. As a threshold matter, that would depend on whether Pacific International Terminals (PIT) — the SSA Marine subsidiary proposing to build the coal terminal — agrees to continue to reimburse the agencies for ongoing expenses.

In response to an email query whether the agencies had discussed this issue with the project proponents, Regional Director Josh Baldi of the Washington Department of Ecology responded on behalf of the state and the county that no such discussion had yet occurred; the agencies will wait until action is taken by the Corps, if any, to determine how they will proceed. In an unsolicited follow up, however, Baldi noted:

“Whatcom County’s Major Project Permit code requires a project to ‘be consistent with applicable laws and regulations.’ This requires the project to be consistent with State and Federal laws and based on the Corps decision on the Lummi’s request this may affect the permit decision by Whatcom County. This of course, is after the SEPA review if PIT chooses to continue.”

Article 6 of the U.S. Constitution actually imposes a duty on “the judges in every state” to honor “the supreme law of the land,” which includes the Constitution, federal laws, and “all treaties made … under the authority of the United States….” It seems likely, therefore, that a Corps decision to deny federal permits for GPT in accordance with the Treaty of Point Elliott would preclude state permits as well, although PIT could theoretically agree to continue funding completion of the EIS.

In a phone interview, Craig Cole, local spokesman for GPT, said that if SSA Marine officials have discussed this scenario with permitting officials, he was not privy to that fact. “I’m clueless,” he said, adding that “every significant event creates a reassessment of how to go forward.” Bob Watters, senior vice president of SSA Marine, did not return phone calls.

SSA Marine’s Response to the Corps

The Corps has given SSA Marine the opportunity to respond to the Lummi Nation’s assertion that the current proposal cannot be mitigated to avoid impacts to their fishing rights. In a five-page letter dated May 12, 2015, Vice President Skip Sahlin of Pacific International Terminals explained that the company needs 90 days to consult with experts to determine if the terminal could be redesigned to avoid impacts.

Sahlin complained in the May 12 letter of “the very general allegations made in the [Lummi] declarations.” However, prior to filing their permit applications in 2011, PIT was in receipt of a 35-page “Guide for Analysis of Project Impacts on the Lummi Nation” prepared by Meyer Resources, Inc. in September 2004. That document maps usual and accustomed fishing grounds and describes “Lummi Fish and Shellfish Resources and Activities” in detail. We know PIT knew about the Guide, because it is a reference listed at page 6-1 of the Feb. 28, 2011, Project Information Document.

It is not clear why SSA/PIT, Cloud Peak, or any other stakeholder is so insistent the Corps’ treaty determination should await completion of an EIS under NEPA. It seems likely, however, that the Corps will make a determination soon after the expiration of the 90 days requested by SSA Marine to respond, around mid- to late August.

And then things will get very interesting.

Endnotes

1. For a discussion of the effect of the Lummi request, see Terry Wechsler, “Legal precedent undergirds Lummi request to the Corps,” Whatcom Watch, Feb. 2015,http://www.whatcomwatch.org/php/WW_open.php?id=1810.

2. Located online June 20, 2015, at https://docs.google.com/document/d/1zKfWaehXC3YLvsFNoauyltkKRjVbrcfzTxr-e1Tf5Ec/mobilebasic?pli=1.

3. http://www.countoncoalmontana.org/index.php?our-supporters-new.

4. Located online June 20, 2015 at http://www.countoncoalmontana.org/index.php?our-supporters-new.

5. http://laws.leg.mt.gov/legprd/LAW0203W$BSRV.ActionQuery?P_SESS=20151&P_BLTP_BILL_TYP_CD=HB&P_BILL_NO=244&P_BILL_DFT_NO=&P_CHPT_NO=&Z_ACTION=Find&P_ENTY_ID_SEQ2=&P_SBJT_SBJ_CD=&P_ENTY_ID_SEQ=.

6. Last located online on June 19, 2015, at https://www.congress.gov/amendment/114th-congress/senate-amendment/1809.

7. Don Hawkins of The Washington Post argued in an Aug. 29, 2014, article, “No, D.C. isn’t really built on a swamp.” http://www.washingtonpost.com/posteverything/wp/2014/08/29/no-dc-isnt-really-built-on-a-swamp. We nonetheless stand by the comparison.

8. Cloud Peak Energy 2014 Annual Corporate Report, p.1 fn.4.

9. Sept. 4, 2014, press release, “Cloud Peak Energy and Ambre Energy Announce Signing of Deal for Ambre Energy’s Purchase of Decker Mine Interest from Cloud Peak Energy.”