Environment | Energy

Oregon Utility Board Considers Controversial Sale Of Oil Tanks


Oregon utility regulators are considering a request by Portland General Electric to sell nine oil storage tanks on the Columbia River near Clatskanie.

The sale has raised concerns that the fuel distribution company Global Partners LP is buying the storage tanks so it can operate an oil-by-rail terminal.

The company currently ships ethanol by rail to the Columbia Pacific Bio-Refinery at Port Westward and transfers it to barges and ships. But it has the permits it needs to switch over to shipping crude oil.

Buying PGE’s oil tanks would give the company about half as much storage capacity as the oil-by-rail terminal proposed by Tesoro-Savage companies in Vancouver, Washington.

PGE built the tanks to store oil as a backup fuel source for a nearby gas-fired power plant, but the plant has never needed that much oil as a backup fuel supply, according to spokesman Steve Corson. The utility is required to consider the value of the assets to its ratepayers in deciding what to do with them.

Corson said maintaining the tanks or decommissioning them would cost money while selling them would generate income that could benefit the utility’s ratepayers.

The storage tank sale needs approval from the Oregon Public Utility Commission.

Miles Johnson of the environmental group Columbia Riverkeeper, sent a letter to the PUC last month asking the board to deny the sale because of the public safety risks of an oil-by-rail terminal. He cited the oil train derailment and fire in Mosier, Oregon, last year as an example of what could go wrong.

“The public interest in preventing more oil train traffic–and accidents–in Oregon communities strongly outweighs whatever minor monetary benefit PGE might gain from selling off these aging tanks,” Johnson told the PUC.

The biorefinery at Port Westward was originally built to produce ethanol, but its owner Cascade Grain quickly went bankrupt. In 2012, the facility was used to ship crude oil, but last year the current owner, Global Partners, announced it would switch to transloading ethanol in response to low oil prices.

 Johnson said when oil prices go back up, the company will be perfectly positioned to operate an oil-by-rail terminal, which he argues is not in the public interest.

The Public Utility Commission staff, however, has recommended the board approve the sale, noting in a staff report that Columbia Riverkeeper raises “serious concerns” about the risks of more oil train traffic. But the PUC doesn’t have jurisdiction over the railroads, the staff says, and thus oil train risks are “not part of the public interest calculus employed by the commission.”

In a news release, Dylan Remley, vice president for terminal operations at Global Partners, said the purchase of oil storage tanks is only a slight modification of his company’s longstanding plans to store and ship ethanol at the site.

The company already has permits to build its own storage tanks, he said, but with this sale it can refurbish the existing PGE tanks rather than building its own.

“Any claim that the sale under consideration by the OPUC is a new project is simply false and misleading,” Remley said. “We are encouraged by the prospect of revitalizing PGE’s underutilized neighboring assets as an alternative to building new storage.”

Catie Kerns, a spokeswoman for Global Partners, said the company’s permits allow for shipping up to 1.8 billion gallons of ethanol or crude oil per year, but given the current market conditions the company plans to continue shipping ethanol – not crude oil – for the foreseeable future.

 

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