Whatcom County may restart Cherry Point regulatory work

Whatcom County may restart Cherry Point regulatory work
After lengthy efforts by industry and environmental groups to reach compromise on proposed regulations for the Cherry Point refineries, the Whatcom County Council may start the whole process over again. Photo: freepik.com

For more than four years the Whatcom County Council has explored reregulating the Cherry Point industrial area, already one of the most regulated and environmentally clean in the world. The Planning Commission in August recommended changes to the council’s proposed regulatory amendments following an extensive stakeholder process. However, recent statements by councilmembers at its Sept. 29 meeting suggest they intend to ignore those recommendations.

Meanwhile, industry members warn that the wrong policies adopted could jeopardize the region’s economy that is already reeling from the curtailment of Intalco’s smelting plant earlier this year.

“Industries and refineries – they can pack up and leave,” Mills Electric President and CEO John Huntley said. “If that happens, Whatcom will be a disaster.”

The Cherry Point industrial area contains two refineries – the Cherry Point Refineries: BP Cherry Point Refinery and Phillips 66 Ferndale – which are one of the county’s largest employers. According to a 2019 report, the area provides 3,320 jobs that pay a median wage of $110,00, and the area composes 3.75 percent of all employment in the county.

The area has been the focus of regulatory changes for almost five years. The Planning Commission conducted 10 work sessions with industry members and environmental groups after the council submitted its proposed changes.

The commission recommendations differing from the council’s included:

  • Allowing ongoing maintenance, repair, or modification to existing facilities;
  • Mitigating greenhouse gas emissions only through the State Environmental Policy Act (SEPA) rather than through zoning;
  • Allowing new or expanded renewable fuel facilities through a permitted use rather than conditional use;
  • Modified standards for “expansions” requiring a conditional use permit (CUP); and
  • Modified requirements for “proof of insurance for hazards created in this county.”

“What came out of the planning commission was workable for everybody and didn’t really put too much of a damper on the industries at Cherry Pont,” Huntley said. “They’re workable.”

Associated General Contractors Northern District Manager Lance Calloway holds a similar assessment. “The Planning Commission asked the industry folks as well as various NGOs (non-government organizations) to sit down and work through some of the issues…and make some compromises. Overall, I thought there was some good give and take. That was always a positive.”

However, the council may ignore the commission’s recommendations on issues such as CUPs in which all changes at the refineries would be required to have one. In addition to triggering the SEPA process, CUPs allow greater subjectivity by the county in approving an application.

“Conditional use permits take up time, and that relates to money,” Calloway said. “From our perspective in the construction industry, it’s the uncertainty of the permitting processing and regulatory process for large capital projects.”

He added that while the council’s changes may allow for existing facilities, “most businesses want to produce more. This is where there are opportunities for member firms to add jobs and bring in additional people on the payroll,” adding that expansion projects “result in permanent construction jobs for overall maintenance and processing.”

Laborers Local 292 Political Director Trevor Smith told the council at its Sept. 29 meeting that “I’m frustrated by how the council seems to be pushing back on the hard-fought compromises that were crafted during the commission process. It’s not perfect and probably won’t ever be, but compromises were found. Industry, labor, environment – everybody came together, worked on this language, and created something…everybody is willing to work with.”

Not only can excessive regulation stymie economic development, but it can also deprive local contractors of new work. For three years Phillips 66 worked with Green Apple Group to build a 250-million-gallon-per-year renewable diesel facility within its refinery. However, in May both parties withdrew due to “permitting delays and uncertainties,” and the facility has since been permitted at a facility in Louisiana. According to Callow, the decision cost three contractors $500 million worth of construction work.

Whatcom County recently suffered job loss in June when Intalco curtailed its smelting plant due to depressed aluminum prices. Curtailment means that the plant is closed but can be reopened if economic conditions change. The plant employed 700 workers paid an average of $100,000 annually.

Calloway noted that industry closures create significant economic problems for the county. “People either find another job, which is very tough to find in this community at that wage level, or they’re having to leave the community.”

Huntley said: “if we all work together, we can get to the right conclusion. They (refineries) got lots of money to do different things and closing them down is not the answer.”

The council’s next meeting is scheduled for Oct. 27. The council is expected to propose amendments that will involve public comment.

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