Tesoro Savage EFSEC Adjudication Findings of Fact, Conclusions of Law, and Order to Proceed to Recommendation to the Governor
December 19, 2017
Washington state law requires applications for large energy facilities be reviewed and permitted by the statewide Energy Facility Site Evaluation Council. A primary task for the Council is to hold an adjudicative hearing in order to balance the harms and benefits of a proposed project. EFSEC held a 5-week trial in June-July 2016, where multiple parties presented witnesses and argument for and against the terminal. EFSEC’s Adjudication Order, at over 400 pages, addresses all issues raised during the trial, finding multiple areas where Tesoro-Savage (also called Vancouver Energy Distribution Terminal or VEDT) failed to carry its burden to show that benefits outweighed risks and harms. Quotes from the Council’s order on important aspects of this proposed project are reproduced below; the entire Order can be found at here.
Seismic and Earthquake Risks
“What has been established is that the site selected for the proposed project poses substantial risks associated with lateral spreading during a major subduction earthquake, which the applicant has not demonstrated, can be mitigated with the measures proposed. The Council generally agrees with Dr. Wartman’s assessment that dangerous facilities such as the VEDT should not be sited on lands that are geologically unstable and hazardous. Although risk cannot always be eliminated, when the consequences can be catastrophic, the level of acceptable risk is greatly reduced. Given the consequences, the Council concludes that in this instance, the level of risk is too high.” Page 25.
“Thus, the Council concludes that the VEDT, as proposed by Tesoro Savage, poses a substantial risk to human life and safety and the environment.” Page 30.
Increased Rail Traffic
“Based on Tesoro Savage’s single day count of existing trains, this would also represent a potential 29 percent increase in the number of all current inbound trains, and a 25 percent increase in the average length of trains. The Council believes that regardless of fluctuations in other rail traffic on the route, new traffic generated by the VEDT is a significant added impact because it represents an estimated increase of 283 percent to 430 percent in the number of inbound unit trains carrying Bakken crude oil or bitumen on the rail route compared to the current 10 to 18 per week estimated by BNSF.” Page 36.
Rail Accidents, Oil Spills, and Fires
“The record provides substantial evidence that the new VEDT trips, regardless of existing rail traffic, are at risk of generating a high consequence event somewhere along the rail corridor simply due to the projected increased number of rail trips.” Page 47.
“The record provides substantial evidence that the consequences of a derailment and spill could be significant. Derailed trains without any oil release pose little risk of fire or explosion, but derailments with a release and no initial fire can escalate to fire. Released oil can flow downhill and emit vapors. Spilled oil can reach adjacent waterbodies, including by the application of water for firefighting. The Council is convinced that most future oil spills stemming from derailments, other than the smallest, will involve fire with consequences varying depending on the location and nature of the accident, response, and other factors. Damages could reach as high as $6 billion if a large population or particularly vulnerable environmental area is harmed. The VEDT is projected to generate 21 percent of the United States’ crude oil and ethanol tank car shipments so adjusting for the length of the Washington route, the PHMSA’s methodology would project that without additional safety improvements the VEDT would generate one higher consequence event with at least $1.15 billion in costs and at least 49 fatalities somewhere along the Washington route every 49 years and one high consequence event every 8-9 years somewhere along the full rail corridor to North Dakota. Even a lower consequence event will result in fatalities at a rate of .048 per mainline derailment, which when adjusted to this proposal, would project one fatality from a consequence event every 41 years on average in Washington and once every 15 years along the full route.” Page 51.
“As required by RCW 80.50.010, Washington citizens and the environment must be protected by ensuring minimal impacts to the environment. Even if emergency response personnel and assets are fully available, rapidly deployed to the incident, and seamlessly managed, there is insufficient analysis in the record demonstrating or purporting to demonstrate that this would necessarily be sufficient to fully mitigate impacts from the projected accidents over the life of the VEDT to satisfy that statutory standard. There is no evaluation or argument that recent oil train accidents that involved significant harm to persons, property or the environment would have had a better outcome had they occurred along the proposed rail corridor because of better emergency response in Washington. Conversely, with the exception of the Mosier accident, there is no evidence or argument provided that recent oil train accidents with “good” outcomes turned out that way because of an emergency response level that can be expected consistently in the future. With regard to the Mosier accident, Tesoro Savage’s assertion that the outcome was “very good” appears based on the coordinated performance of the responders and lack of fatalities or injuries, not a full accounting of impacts. … Commendable performances by responders are not the same thing as safe, low impact outcomes.” Page 66.
Vehicle Delays At-Grade Crossings
“However, these ten at-grade crossings likely represent only a small fraction of at-grade crossings on the route, as BNSF indicates they have 25,900 such crossings on their full 32,500 mile network, suggesting there would be approximately 306 at-grade crossings on the inbound Washington route if it has a similar ratio, and perhaps a roughly comparable number on the outbound Washington route as well. There are a reported 111 at-grade crossings in Vancouver and Spokane alone, although some may be on other tracks not serving the terminal. For the full Washington route serving the VEDT the record contains no information or estimates of the number of crossings, the estimated number of vehicles using them, or the approximate total vehicle hours of delay created by the proposal’s inbound and outbound trains passing through each crossing.” Page 67.
Columbia River Oil Spills
“The evidence establishes that pre-booming will either not occur or will be ineffective for much of the year primarily due to current speed. Wave steepness may also inhibit effective pre-booming. Even if Tesoro Savage chooses to pre-boom in currents up to 1.5 knots, conventional booms deployed perpendicular with the current tend to fail at 1 knot of current. Tesoro Savage expects that current speed will exceed 1.0 knot on a frequent basis during all months of the year. With spring flows approaching 3 to 5 knots, pre-booming would rarely occur or be effective during the entire spring season. Tesoro Savage also recognizes that current speed will be a deterrent to effective pre-booming at the terminal for a substantial portion of the year.” Page 86.
“The Council is persuaded that the potential amount of crude oil that can be spilled under current loading limitations is significant, which could lead to very serious problems. Even after including the positive impact of tug escorts, the projected average spill volume of 63,463 bbl equates to 2.7 million gallons, approximately 95 percent of the entire contents of a 100-car oil train. There is no evidence in the record of a spill this size ever occurring on the Columbia River, and under the proposal it would have a 2/3 chance of occurring during the assumed 20-year life of the project. Such a spill would be 16 times larger than the 1984 Mobile Oil spill, which involved 3925 bbl and is the only other major Columbia River oil spill noted in the record.” Page 95.
Impacts to Columbia River Fish
“The Council is persuaded that, where scores of fish are observed to be stranded by a single vessel-passing event, this avoidable impact should outweigh the very slight cost to shipping speed. The burden to oil shipping efficiency would be minimal if there were a mandatory slowing of the vessels carrying oil from the VEDT facility. This translates into a matter of minutes of extra travel time down the Columbia River. The benefits to a fish species listed under the Endangered Species Act would be significant.” Page 104.
“Mortality is increased in not only the fish that were directly exposed but also in their offspring. This is a population level effect. In individual animals, effects can last for years and in doing so, can affect their ability to survive and reproduce. For example, elevated salmon mortality rates after the Exxon Valdez oil spill resulted in two pods of killer whales losing 40 percent of their population in about a year, leaving one pod with no reproductive females.” Page 144.
Harm to Tribes
“In making its recommendation to the Governor, the Council must balance the need for increased energy against the broad public interest. This requires consideration of the impacts of the proposed facility on populations in the affected area, including Indian peoples’ cultural and economic interests.” Page 178.
“Tribal Parties have significant and unique cultural and economic interests at risk that are important not only to their tribes, but to other populations, to Washington’s natural resources, in particular endangered salmon, and to the State of Washington. Tribal people have been living and subsisting in the same places along the Columbia River since pre-history. Tribal ties to the Pacific Northwest and the Columbia River are deep. The Columbia River system is the life-blood of all the tribes and First Nations found along its entire length. Since time immemorial, the water, salmon, game, roots, and berries of our homeland—the sacred first foods—have sustained our health, spirit, and cultures. So fundamental was this connection that when the Yakama, Umatilla, Warm Springs, and Nez Perce tribes entered into treaties with the United States in 1855, they specifically included language to ensure that they could continue to fish, hunt, and gather their first foods. These treaties that guaranteed Tribes access to fish, hunt, gather, and protect sacred sites in their usual and accustomed places, first foods to practice culture, and continue their way of life and plan for the future, cannot be abrogated.” Page 179.
“The Fruit Valley Neighborhood is in such close proximity to the VEDT that the VEDT will have a greater impact on its residence than other areas of Vancouver. Although the Neighborhood is zoned for industrial uses, this does not mean that the incoming industry should be such that it has a disproportionate adverse impact on its residents. The increase emissions of pollutants, even within acceptable regulatory standards, could have an adverse impact on the health of these residents. To date, Tesoro Savage has not agreed to make any changes that would reduce this impact.” Page 226.
Need for the Project
“On balance, the Council agrees with Opponents that there is little evidence that the VEDT will benefit Washington refiners directly.” Page 275.
“While Tesoro Savage has shown at least potential benefits to refiners from the VEDT, the Council does not find substantial evidence in the record that the VEDT is necessary to secure refiners’ supplies of crude oil.” Page 276.
“The Council concludes that Tesoro Savage has not provided substantial evidence to show that consumers of refined products, in Washington or elsewhere in PADD V, would benefit from the refiners’ supply-chain efficiencies. Tesoro Savage’s expert witness opined that supply chain efficiencies were generally competed downward, thus benefitting consumers. These bare assertions, offered without substantial evidence, are insufficient to persuade the Council that the VEDT would materially benefit consumers.” Page 277.
“[O]utside of insurance coverage, there will be little to no other funds available to compensate third parties for potential losses. The Council takes notice that should Tesoro Savage, as a limited liability company, file for bankruptcy upon a catastrophic incident, any insurance (1) may not be immediately available; and (2) could become part of a bankruptcy estate, distributable under the bankruptcy laws in accordance with the normal priorities to creditors, including the state and other persons or entities damaged.” Page 287.