After five years of development, Lighthouse Resources — the company formerly known as Ambre Energy North America — announced Thursday it is backing out of a $242 million project that would have shipped 8 million tons of coal per year to Asia through an enclosed terminal at the Port of Morrow.

The port, however, is not giving up yet on building the dock and will continue to appeal Oregon’s decision to reject a key permit needed for construction in the Columbia River.

Based in Salt Lake City, Lighthouse Resources owns two coal mines in the Powder River Basin, including the Decker Mine in Montana and Black Butte Mine in Wyoming. Lighthouse began working on the Morrow Pacific Project in 2011 as a way to reach Asian markets via the Pacific Northwest.

But in 2014, the Oregon Department of State Lands denied a remove-fill permit needed to build the Coyote Island Terminal at the Port of Morrow. According to the state’s decision, the dock would have interfered with usual and accustomed tribal fisheries.

Earlier this year, Lighthouse also gained full ownership of Millennium Bulk Terminals in Longview, Washington, which would ship roughly 48.5 million tons of coal. The U.S. Army Corps of Engineers recently issued a draft Environmental Impact Statement of the project, which is expected to generate more than 2,000 direct and indirect jobs.

In addition, Lighthouse started sending coal to South Korea earlier this month through Westshore Terminals in Vancouver, British Columbia. As a result, Lighthouse CEO Everett King said the company has decided to move on from Morrow Pacific.

“Our ability to now ship to our customers in Asia allows us to achieve our short-term goals while we continue to focus on further long-term growth at Millennium,” King said.

King said the decision made by the Department of State Lands was “unprecedented,” and prevented Lighthouse from adding trade, jobs and economic development in Oregon.

“Though we are disappointed for our Morrow Pacific Project supporters, we are very excited to commence delivery of products to our customers,” King said.

Though Lighthouse has stepped aside, the Port of Morrow will continue to fight to build a new dock. Joe Taylor, president of the Port Commission, said they have already invested around $50 million in rail infrastructure to serve the site.

“This new dock will allow us to ship commodities in the same manner as our existing facilities,” Taylor said. “Without this dock, hundreds of jobs and millions of dollars are at stake for Morrow and Umatilla counties, and Oregon.”

Gary Neal, the port’s general manager, said he feels the state’s decision to deny the dock permit was politically motivated. Coyote Island Terminal would be built along a stretch of river in the port’s East Beach Industrial Park, between two existing terminals: one to ship grain, and another to ship biofuels.

Neal is not sure what commodities might be handled at the new dock, but unless they build now, he said companies will continue to take their business elsewhere.

“If you don’t have something available, those opportunities pass you by,” Neal said. “It’s unfortunate we lost Lighthouse for the jobs and capital investment. That commodity is moving. It’s just moving through Canada now.”

Chuck Sams, spokesman for the Confederated Tribes of the Umatilla Indian Reservation, said the tribes maintain their stance that the project would harm tribal fishing rights guaranteed by the Treaty of 1855.

“Again, we’re not against economic development in any way, unless it interferes with or infringes on our treaty rights, which are guaranteed by both the treaty and the U.S. Constitution,” Sams said.

Jan Hasselman, attorney for Earthjustice who represents Columbia Riverkeeper and other environmental groups, said Lighthouse’s decision to abandon the project in the middle of its own appeal shows the project never had a legitimate chance to move forward.

“It’s time to turn the page on coal exports in the Pacific Northwest,” Hasselman said.

The port believes otherwise. It purchased the land along the shore back in 1967 from the Army Corps, Neal said, which had been condemned after it was flooded by the construction of the John Day Dam. Under the terms of the agreement, the now-flooded land was to be used for “port or industrial facilities.”

The Coyote Island Terminal is just one of two remaining sites for major industrial development in the John Day Pool of the Columbia River, Neal said. The Department of State Lands found the proposal did not adequately consider alternatives that would have less impact on the river and tribal fisheries.

“We just need to convince the (state) they were incorrect,” Neal said.

A hearing is scheduled on the appeal before an administrative law judge in November.

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Contact George Plaven at gplaven@eastoregonian.com or 541-966-0825.

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