After eight delays and more than two years of review, the Oregon Department of State Lands denied issuing a key permit Monday to the developers of a proposed coal export terminal in Boardman.

Australia-based Ambre Energy planned to ship 8.8 million tons of coal per year down the Columbia River and overseas to Asia from an enclosed terminal built at the Port of Morrow. The company applied in February 2012 for a “remove-fill” permit needed to begin construction on a dock as part of the facility. 

The application received more than 20,000 public comments. Supporters lauded the project's economic benefits and job creation, while opponents decried the environmental impacts of barging and burning coal. Ultimately, the Department of State Lands decided the project “is not consistent with the protection, conservation and best use of the water resources.”

Agency Director Mary Abrams said the application was scrutinized for months.

“We believe our decision is the right one, considering our regulatory parameters laid out in Oregon law and the wealth of information we have received from the applicant and the public,” Abrams said.

At $242 million, the Morrow Pacific project would send coal by rail from the Powder River Basin of Wyoming and Montana to the proposed Coyote Island Terminal in Boardman. From there, it would be barged down to the Port of St. Helens near Clatskanie and loaded onto ocean-going vessels for export to Asia.

A summary of the permit decision states Ambre Energy did not adequately consider alternatives that would have less impact on the river and tribal fisheries — such as sending the coal on trains directly to St. Helens.

Greg Smith, the Republican state representative from Heppner whose economic development firm was hired to help shape Morrow Pacific, said they disagree with the agency’s ruling and will now step back to consider their options.

“Obviously, we’re disappointed,” Smith said. “We do not view railing coal as the best alternative. We thought covering it on barges was the best alternative.”

The state lands permit is separate from the Oregon Department of Environmental Quality's Section 401 Water Quality Certification, which was discussed in a public hearing Aug. 12.

In a brief statement, Ambre spokeswoman Liz Fuller said the company will consider its full range of options. Ambre could file an appeal within 21 days, which would include a hearing before an administrative law judge.

Until then, Morrow Pacific cannot break ground and the project is apparently on the ropes.

“I hate to move the economic benefits out of the state of Oregon,” Smith said. “But it appears that is the governor’s decision.”

Gov. John Kitzhaber, a Democrat seeking reelection, has opposed Northwest coal exports and said the region should lead a transition to clean energy sources. Kitzhaber supported the DSL’s decision Monday, which he said reflects both the historical and present-day importance of healthy waterways and fisheries to Oregonians, including local American Indian tribes.

“Columbia River tribes have fundamental rights to these fisheries, and projects that may interfere with these rights or affect important public resources are held to appropriately high standards,” Kitzhaber said.

A number of tribes, including the Confederated Tribes of the Umatilla Indian Reservation, came out in opposition of the project as an assault on their treaty fishing rights guaranteed by the Treaty of 1855. The Yakama and Lummi nations of Washington state also held a protest in Boardman against building the export terminal.

“As stewards of our natural resources, we must stand up and protect the water, air and land now and for future generations of tribal members and our fellow citizens of the Pacific Northwest,” said Gary Burke, chairman of the CTUIR Board of Trustees.

Environmental groups from across the state also applauded the department’s decision to deny the Morrow Pacific permit. Peter Maille, board chairman for Oregon Rural Action in La Grande, said there were simply too many unanswered questions about train crossings, dust, noise, public health and pollution for the project to move forward.

Brett VandenHeuvel, executive director of Columbia Riverkeeper in Hood River, said he was pleased to see Oregon stand up to coal.

“It doesn’t surprise me, given the huge impacts of this project to our river, our climate and our communities,” VandenHeuvel said. “It sends the message that coal export has a huge impact on our waterways and climate, and it’s not the way we want to go.”

Yet the Morrow Pacific project counts numerous Eastern Oregon businesses, governments, individuals and elected leaders among its supporters, who looked forward to the investment and its creation of 25-30 permanent family-wage jobs. In addition, Ambre Energy pledged a voluntary amount of 10 cents per ton of coal to Morrow and Columbia county schools, which would total about $800,000 per year at full capacity.

Both the Umatilla County Board of Commissioners and Morrow County Court supported the project. Umatilla County Commissioner Larry Givens said the board has never wavered in that support, despite bringing on two new commissioners since the project was first introduced.

“We’ve always been supportive because of the science explained to us, and what measures were in place to keep it a clean project,” Givens said.

Morrow County Judge Terry Tallman agreed there were enough safeguards in place to ensure the project was environmentally responsible.

“I just don't think (opponents’) characterization is accurate at all,” Tallman said. “They made a political statement out of it, instead of deciding how we can make it a win-win.”

There are two more coal export terminals proposed in the Northwest: the Gateway Pacific and Millennium Bulk terminals, both in Washington state. Of the three, Morrow Pacific is the smallest.

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Contact George Plaven at gplaven@eastoregonian.com or 541-564-4547.

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