Quinault Indian Nation v. City of Hoquiam

Washington Supreme Court·Decided January 12, 2017·No. 92552-6·Published

Opinion

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/ I N CLERKS OFFICE This opinion was filed for record .._COURT. . DATE 1111<TE OFWASHINGTOII

JAN 12.1817 at ll&\ onlw ~ 21Jin j-1 ' ;_IAAA hAIIA.&t I CHili/' JUSTICE

c9 . 8~~c:x.~.

SUSAN L. CARLSON

SUPREME COURT CLERK

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

QUINAULT INDIAN NATION, FRIENDS )

OF GRAYS HARBOR, SIERRA CLUB, )

GRAYS HARBOR AUDUBON, and ) No. 92552-6 CITIZENS FOR A CLEAN HARBOR, )

) En Bane Petitioners, )

)

v. )

) Filed __J_A_N_1_2_2_111_7_ IMPERIUM TERMINAL SERVICES, LLC;)

CITY OF HOQUIAM; WASHINGTON )

STATE DEPARTMENT OF ECOLOGY; )

WESTWAYTERMINALCOMPANY, )

LLC; and WASHINGTON SHORELINES )

HEARINGS BOARD, )

)

Respondents. )

_________________________)

OWENS, J. - Two companies applied for permits to expand their oil terminals on the shores of Grays Harbor. The expansion would facilitate the storage of additional fuel products, which would arrive by train or truck and depart by ocean-

bound ship. The issue here is whether the Ocean Resources Management Act

Quinault Indian Nation, eta/. v. Imperium Terminal Svcs., eta/. No. 92552-6

(ORMA), chapter 43.143 RCW, applies to these expansion projects. 1 The Shoreline Hearings Board (Board) and the Court of Appeals held that ORMA does not apply to these projects based on limited definitions in the Department of Ecology's (DOE) ORMA implementation regulations. We hold that this interpretation improperly restricts ORMA, which was enacted to broadly protect against the environmental dangers of oil and other fossil fuels. The pmties also contest whether these projects qualify as "ocean uses" or "transportation" under DOE's regulations. We hold that these projects qualify as both ocean uses and transportation. Finally, though not discussed by the parties or the Court of Appeals, these projects qualify as "coastal uses" under DOE's regulations. Accordingly, we reverse the Court of Appeals and remand for further review under ORMA's provisions.

FACTS

Westway Terminal Company LLC owns a terminal used for storing petroleum products in the Port of Grays Harbor within the city ofi-Ioquiam. Grays Harbor and the areas along the rail and ocean vessel route contain many environmentally sensitive areas including streams, rivers, wetlands, and migratory bird habitats. Westway applied to the city of Hoquiam and DOE to expand its

1 ORMA was originally passed in 1989 in the wake of the Nestucca and Exxon Valdez oil spills. When the legislature passed the law, it explicitly noted the danger that oil spills pose to the state's marine environment. LAWS OF 1989, 1st Ex. Sess., ch. 2.

Quinault Indian Nation, et al. v. Imperium Terminal Svcs., et al. No. 92552-6

existing bulk liquid storage terminal to allow for the receipt of oil trains, storage of crude oil from those trains, and outbound shipment of oil by vessel and barge. The crude oil would be shipped from the Port of Grays Harbor to regional refineries. Westway's expansion project is situated on the shores of both Grays Harbor and the Chehalis River in the city of Hoquiam. Construction of the proposed project will be at least 160 feet from the river.

Westway plans to expand its existing facility by constructing four aboveground storage tanks for storing crude oil. Each tank will have a capacity of 8.4 million gallons, meaning the entire Westway project will have a capacity of 33.6 million gallons. Westway also plans to expand its rail facility from two short rail spurs to four longer spurs with a total of76loading spots. Westway would also add a vapor combustion unit and a structural hose support system to accommodate loading tanker vessels with crude oil. Once complete, Westway's expanded terminal is estimated to receive 403.2 million gallons of oil per year. This is equivalent to two "unit train" transits (one loaded and one empty, with 120 railcars each) every three days. Westway's expansion is estimated to increase the amount of train traffic by up to 243 transits per year. Westway's expansion project is also estimated to increase ocean vessel traffic by up to 120 transits per year.

Quinault Indian Nation, eta/. v. Imperium Terminal Svcs., eta/. No. 92552-6

Imperium Terminal Services LLC operates a similar terminal facility next to Westway's in Grays Harbor, also adjacent to the Chehalis River. Like Westway, Imperium applied to expand its bulk liquid storage terminal to allow for the receipt, storage, and shipment of crude oil, biofuels, and other fuel products. This expanded facility "would be served by three independent modes oftransportation: water, rail, and truck, each of which would provide pathways for inbound raw materials or outbound products." Admin. Record (AR) at 228, 524. Imperium's expansion would include construction of nine additional storage tanks, each with a storage capacity of3.36 million gallons, for a total capacity of30.24 million gallons. Approximately 6,100 feet of new track would be constructed to expand their current railyard. Two new pipes would also be constructed, connecting the tank farm with a preexisting shipping terminal. Finally, a marine vapor combustion unit would be installed in order to incinerate vapors displaced during vessel loading. The unit would overhang the harbor's waters.

Imperium estimated its expansion project would increase terminal operations up to two unit trains per day (one loaded and one empty), each consisting of 105 tank cars, and would result in up to 200 ships or barges a year. Combined, the Westway and Imperium expansion projects would increase vessel traffic by 520 transits per year and increase train traffic by 973 transits per year. This would be a

Quinault Indian Nation, eta!. v. Imperium Terminal Svcs., eta!. No. 92552-6

310 percent increase in vessel transits and a 133 percent increase in train transits per year through Grays Harbor.

In order to gain permission to begin these expansions, Westway and Imperium applied for substantial shoreline development permits (SSDPs). DOE and the city of Hoquiam worked as "co-leads," tasked with making a threshold determination of nonsignificance, determination of significance, or mitigated determination ofnonsignificance (MDNS). The co-leads issued an MDNS to both Westway and Imperium for their proposals and issued SSDPs for both terminals in April and June 2013. Petitioners 2 appealed the permits and MDNS to the Board, arguing in part that DOE and the city of Hoquiam failed to consider both the State Environmental Policy Act (SEPA), chapter 43.21C RCW, and ORMA before issuing the MDNSs.

Petitioners and respondents 3 all filed motions for partial summary judgment.

Petitioners claimed that respondents violated SEP A because they ignored the cumulative impact of their own projects, as well as the foreseeable additional impact of a third, similar project when assessing environmental impact at the "threshold determination stage." Id. at 1142-52. The Board granted petitioners'

2 Petitioners are Quinault Indian Nation, Friends of Grays Harbor, Sierra Club, Grays Harbor Audubon, and Citizens for a Clean Harbor. 3 Respondents are Imperium, the city of Hoquiam, DOE, Westway, and the Board.

Quinault Indian Nation, et al. v. Imperium Terminal Svcs., et al. No. 92552-6

motion for partial summary judgment, holding that respondents' failure to account for the cumulative impact of all three projects made the issuance of the MDNS clearly erroneous. Respondents have not challenged this finding before this court. 4 However, the Board also granted respondents' motion for partial summary judgment, determining that ORMA was not applicable to the proposal. It reasoned that ORMA only applies to ocean-based projects because of the ORMA implementing regulation promulgated by DOE, WAC 173-26-360. Using the definitions from that regulation, it noted that ORMA was designed to regulate activities in the ocean, such as extraction of oil, gas, and minerals, and concluded that the proposed Westway terminal did not fall within the definition.

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