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Facility's owner, Global Partners, disputes 'violation'

by: SPOTLIGHT FILE PHOTO - A unit train of DOT-111 tank cars rolls along the Portland & Western Railroad through Columbia City last fall.A major facility at the Port Westward industrial park in north Columbia County has been exceeding the terms of a state permit in violation of state rules, the Oregon Department of Environmental Quality claimed in a Friday, Feb. 28, public notice.

The Columbia Pacific Bio-Refinery, owned by Massachusetts-based energy company Global Partners LP, has been transloading “significantly” more than the 50 million gallons of crude oil per year for which it received a DEQ permit in June 2012, the department alleged.

Because the transloading is said to exceed the 50 million gallons per year allowed under the permit, the activity is no longer considered “incidental” to plant operations under DEQ rules and requires a separate permit, according to the public notice.

Global Partners-owned Cascade Kelly Holdings LLC has applied for such a permit — an air quality permit that would allow the facility to receive and transload almost 1.84 billion gallons of crude oil per year onto oceangoing vessels. DEQ is considering the permit and will hold a public hearing April 3 in the Clatskanie Middle/High School auditorium on the matter.

For now, DEQ has not finalized an enforcement action against the refinery’s operators. The company is contesting the alleged violation.

“Global has not received a notice of violation,” said Ed Faneuil, executive vice president and general counsel with Global Partners. “And Global believes that it is conducting its operations at that facility at Port Westward in compliance with the existing permits.”

Faneuil declined to say how many gallons of oil the Columbia Pacific Bio-Refinery received last year.

Dave Monro, DEQ’s regional air quality manager, said the Columbia Pacific Bio-Refinery exceeded its 50 million gallon-per-year allowance in March 2013, after beginning crude oil shipments in December 2012. He said DEQ learned of the potential permit violation late last year through conversations with company officials.

Monro said Columbia Pacific Bio-Refinery officials inquired with DEQ in 2012 about the company’s intention to significantly increase the volume of crude oil transloaded at the facility, soon after DEQ approved the transloading of incidental amounts.

“It wasn’t long after the modification when they informed us of their intent to start doing that,” Monro said.

DEQ at that time informed Columbia Pacific Bio-Refinery of the requirement to get a new permit, he said.

Exactly how much in fines DEQ could seek has not been determined, Monro said.

“It’s case-specific,” he said. “We take a lot of different factors into account for what that penalty could be.”

There is little to no difference in allowable emissions between the facility’s existing permit and the permit DEQ is now requiring for the increased quantities of crude oil, Monro said. He said required annual reports have shown the facility is in compliance with emissions allowances.

The Port of St. Helens owns Port Westward, where the refinery is located, and controls the rail lead that branches off the Portland & Western Railroad to serve Port Westward.

“The amount of unit trains that are received at that facility is currently subject to the contractual limits that are in our lease agreement with the Port of St. Helens as our landlord,” Faneuil said.

Port commissioners approved an increase in the number of unit trains Global can bring to the facility on the Port Westward rail lead last November. The number is now 24 trains per month, with the potential to increase to about 38 trains per month beginning next year.

Patrick Trapp, the port’s executive director, said Global has not come closer than half its current allowance in any month.

“Even with the rail cap set at 24 [trains] right now, they’ve never had a month higher than 12,” Trapp said Wednesday. “And the average last year was nine trains a month.”

Trapp noted that Global requested the cap increase last year at the same time it announced plans to spend as much as $70 million expanding and upgrading its facility at Port Westward.

“The limit obviously is going to be what kind of storage do they have ... and it’s going to be how quickly they can move it from that storage capacity onto oceangoing vessels,” said Trapp.

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