Pacific Northwest's Salish Sea Eyed as Fossil Fuel Gateway

Proposed projects would move oil, gas, and coal through the ecologically sensitive marine area.

Trains loaded with crude oil from North Dakota's Bakken shale formation rumble past the outfield bleachers of the Seattle Mariners' baseball stadium several times a week. From there, the trains head north, their cargo destined for multiple refineries in Washington State.

The traffic is new: Just three years ago, no oil trains were coming to Washington. Bakken crude is filling a void created by dwindling shipments from aging oil fields on Alaska's North Slope, and the petroleum industry wants to bring in more. But the push to build more rail and shipping capacity in the Pacific Northwest is spurring debate over how that oil flow will affect the region—and where it should ultimately go.

The issue is particularly important for residents of the coastal towns that ring the Salish Sea, a group of waterways shared by Washington State and British Columbia that includes the Puget Sound. A region that historically has been "at the vanguard of environmental progress globally is right at the cusp of becoming one of the world's biggest fossil fuel export hubs," said Eric de Place, policy director for the Sightline Institute, a Seattle-based environmental think tank.

Gateway for Fossil Fuel Export

Speckled with emerald isles and hemmed by snow-capped peaks, the Salish Sea is an ecologically rich marine environment. The area is home to more than 100 at-risk species, a list that includes sea turtles, whales, owls, and sharks. The communities lining its shores are largely powered by clean energy. Washington State, for example, gets four-fifths of its electricity from renewable sources, primarily hydroelectric dams on the Columbia and Snake rivers.

But the recent oil and gas boom could transform a region with nary a coal mine or oil well in its backyard into a robust fossil-fuel gateway. After all, the straightest path between these fossil fuel deposits in the interior of North America and markets overseas "goes through the Pacific Northwest," said de Place.

A number of proposed port projects along the coasts of Washington, Oregon, and British Columbia seek to move not only oil from the Bakken and Canada's oil sands, but also coal from the Powder River Basin in Montana and Wyoming, and natural gas from northeastern British Columbia and the U.S. Southwest. (See related story: "North American Natural Gas Seeks Markets Overseas.")

Debate over the projects is not just about the environment—it's also about exports. None of the Bakken crude coming into the Salish Sea area is headed out unrefined to international markets, because a decades-old policy bans most U.S. exports of domestic oil (except for a small amount that goes almost entirely to Canada).

The oil industry and others argue that the ban, which dates to the oil embargo crisis in the 1970s, should be lifted so U.S. producers can benefit from prices on the international market. New capacity to move oil within the Pacific Northwest and Canada could lay the groundwork for eventual exports.

"The Pacific Northwest is going to have acute pressure to become an energy hub," said Charles Ebinger, an energy security expert at the Brookings Institution in Washington, D.C., who has advocated lifting the export ban for economic and security reasons. "It is just a matter of how many of those projects both in the U.S. and Canada the environmental community lets get built."

Will More Trains Mean More Ships?

The first oil trains began rolling through the Pacific Northwest less than two years ago, and traffic has increased steadily since then. Refineries can currently accept about 300,000 barrels of oil per day by rail, according to a Sightline report by de Place, and they are working to boost capacity so they can take more.

If all of the planned facilities are built, Sightline estimates that the region's oil-by-rail capacity will more than triple to 962,7000 barrels per day. That's more than the controversial Keystone XL pipeline, which would carry crude from Canada's oil sands to U.S. Gulf Coast refineries.

At least for now, concerns that oil trains will necessarily lead to increased vessel traffic in the Salish Sea and elsewhere along the West Coast are unfounded, according to Frank Holmes, the Olympia, Washington-based Northwest region director for the Western States Petroleum Agency, an industry trade group that represents oil producers and refiners.

The de facto ban on domestic crude oil exports means only refined products such as diesel and jet fuel can be shipped abroad. As for the traffic of vessels carrying refined products, Holmes says it remains "fairly constant" even with the new oil, because it is replacing lost supply from Alaska. And tanker shipments of crude from Alaska's North Slope, Holmes said, have dropped from about 250 vessels a year in the 1990s to 123 in 2013.

"You're seeing Alaskan production declining and a brand new, good-quality oil being developed domestically," he said. "So, it is a nice fit."

The Tar Sands Twist

But oil trains filled with Bakken crude are not the only means by which shipping traffic in the Salish Sea could rise. After all, there is no restriction on the export of Canadian oil, and the industry is moving to open paths overseas for it.

Kinder Morgan is proposing to nearly triple the capacity of its Trans Mountain pipeline, which runs from Edmonton, Alberta, southwest to Burnaby, British Columbia, to 890,000 barrels per day. If approved, about 80,000 more barrels would flow daily to Washington's refineries, up from the current 142,000, noted Holmes. The bulk of the rest would be shipped to Asia, ramping up vessel traffic for crude oil through the Salish Sea.

To handle the additional export load, Kinder Morgan wants to expand its marine terminal for the pipeline. Under its proposal, tanker traffic would be poised to jump nearly sevenfold, from about five tankers per month to 34.

With the pressure of new oil traffic adding on to existing calls to export coal, "I think we can anticipate a massive increase in crude transport through the straits," said Matt Krogh, a campaigner for the environmental group ForestEthics who is based in Bellingham, Washington.  His group is calling for a moratorium on permitting new projects in Washington until the state can decide whether all the developments are a net benefit to the region.

Caught Up by Coal

The crude-by-rail boom in the Pacific Northwest snuck up on residents who were focused on the pros and cons of several proposed coal terminals. As cheap natural gas has eroded the domestic market for coal, producers have turned to markets in Asia and Europe. But the lack of port capacity in the Pacific Northwest has constrained coal exports to Asia. (See related story: "As U.S. Cleans Energy Mix, It Ships Coal Problem Abroad.")

Boosting exports could bring thousands of jobs and millions of dollars in tax revenue to the region, but the prospect of increased rail traffic and ships threading tricky passages through the Salish Sea's San Juan Islands alarms conservation groups. (See related story: "Seeking a Pacific Northwest Gateway for Coal.")

The proposed Gateway Pacific Terminal north of Bellingham, for example, would have the capacity to ship 54 million metric tons of bulk commodities a year, most of that coal. At full capacity, according to the project backers, the export facility would create 1,250 jobs and pump nearly $140 million into the area economy.

Currently undergoing an environmental impact review, the terminal would also bring nine coal trains, each a mile long, through Seattle and north along the Puget Sound coast daily. It would draw 487 ships a year through the Strait of Juan de Fuca and the San Juan Islands, raising concerns about traffic congestion at railroad crossings, air pollution, and the risk of fuel oil spills in the waterways.

Jack Weiss, a city council member in the coastal town of Bellingham, said the terminal played a large role in local elections last fall. "A lot of money came into the election from interests opposed to the coal terminal," he said. Now four of the seven officials elected to the county council that will evaluate the permit for the Gateway Pacific Terminal would be inclined to reject it.

Bellingham was accustomed to weighing safety concerns about increased coal train traffic, Weiss said, but oil by rail is even more worrisome. "Much of the tracks are right against the Puget Sound, the Salish Sea area," he said. "If you had an accident there, then we would have our own little personal Exxon Valdez situation."

How many of these projects eventually get approved and built remains to be seen, said Brookings Institution's Ebinger. Indeed, of six proposed coal terminals in the Northwest, three have fallen through in the past two years, stymied by siting and funding problems. And Kinder Morgan's Trans Mountain expansion project is still under review.

"I don't think it is going to be a cakewalk for the energy industry, by any means," Ebinger said.

Nevertheless, factors such as the "almost insatiable" appetite for coal in Asia and growing pressure to move North American crude, Ebinger said, are strong market forces in the industry's favor.

That reality has driven the anti-fossil fuel campaigns by ForestEthics' Krogh and others. Krogh said, "My nightmare scenario is all of these terminals becoming a faucet to the world that you can't turn off."

This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.

Additional reporting by Christina Nunez

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