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Pacific Northwest Methanol Projects Stalled by Environmental Issues

Once ambitious plans by a Chinese-based consortium to build three methanol production plants in the Pacific Northwest have hit permitting hurdles, the latest because of issues regarding an environmental impact statement (EIS) for a facility planned for Port of Kalama, WA.

Last September Northwest Innovation Works (NWIW) hit a hurdle after the Washington State Shorelines Hearings Board issued a partial summary judgment for the proposed Kalama Methanol & Marine Export Facility, designed to carry methanol to Asian markets. The board said the projected greenhouse gas (GHG) impacts noted in the EIS were inadequate and required further analysis.

The Port of Kalama in turn appealed the board review last Monday. NWIW, meanwhile, had decided it would not, as its primary focus remains on building the Port of Kalama methanol facility.

NWIW’s Kent Caputo, general counsel, said the company plans to “focus on assessing the upstream and downstream GHG emission profile as mandated by the Shorelines Hearing Board. This assessment will provide critical science in furtherance of the very high environmental standards in our state -- standards we are prepared and proud to meet and exceed."

With plentiful North American natural gas, the commitment to develop methanol production capability and meet growing Asian demand has remained strong on the Gulf Coast, but Pacific Coast projects have struggled.

Nevertheless, NWIW said it is committed to using ultra-low emission technology to reduce GHG emissions by up to 90% versus traditional methods to manufacture methanol. Additionally, the company said it would be the first major industrial site to implement zero liquid discharge technology to eliminate untreated wastewater from entering the Columbia River.

The state hearing board reversed the project’s shoreline substantial development and conditional use permits because of the EIS inadequacy judgment. The permits have been remanded to Cowlitz County, WA officials and the Port of Kalama for further state analysis.

NWIW dropped plans last year to build what was to have been the largest methanol facility at the Port of Tacoma, WA. However, plans remain on track for the two separate $1.8 billion facilities, the Port of Kalama project and another at Port of St. Helens at Port Westward in Oregon.

NWIW, owned by Shanghai Bi Ke Clean Technology Co. Ltd., was created by Chinese-based Clean Energy Commercialization Co. in partnership with units of Double Green Bridge and the Chinese Academy of Science Holding Co. Private investors include H&Q Asia Pacific.

Last year NWIW named Technip USA Inc. as lead contractor and at that time projected it would begin construction this year. Port of Kalama approved a lease agreement in 2014.

In addition to its permitting challenges, NWIW's multi-billion-dollar plans to convert natural gas into methanol for export to Asian markets has carried significant economic and energy planning implications for the Pacific Northwest, where future gas demand remains uncertain. For example, in Oregon annual industrial gas consumption fell 2.3%/year from 2002-2012.

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