Millennium Bulk Terminals-Longview, LLC v. State

MILLENNIUM BULK TERMINALS-LONGVIEW, LLC, and COWLITZ COUNTY Respondents, and BNSF RAILWAY COMPANY, Respondent-Intervenor, STATE OF WASHINGTON, SHORELINES HEARINGS BOARD, COWLITZ COUNTY HEARINGS EXAMINER, Respondents Below, v. STATE OF WASHINGTON, DEPARTMENT OF ECOLOGY, and WASHINGTON ENVIRONMENTAL COUNCIL, CLIMATE SOLUTIONS, FRIENDS OF THE COLUMBIA GORGE, SIERRA CLUB, and COLUMBIA RIVERKEEPER, Petitioners.

No. 52215-2-II

Court of Appeals of Washington, Division 2

March 17, 2020

UNPUBLISHED OPINION

Melnick, J.

Millennium Bulk Terminals-Longview (Millennium) sought to build the largest coal export terminal in North America, to be located in Longview. Millennium planned to build the facility in two stages, Stage 1 and Stage 2. An environmental impact statement (EIS) under the State Environmental Policy Act (SEPA), chapter 43.21C RCW, analyzed the impacts of the facility based on the completion of Stage 2. As necessary for the project, Millennium applied to Cowlitz County for a substantial development permit and a conditional use permit. The permit application only sought permits necessary to build Stage 1 of the project.

The County recommended approval of the permit application. However, after a hearing, the Cowlitz County Hearing Examiner denied Millennium's permit application. Millennium and the County then petitioned the Shorelines Hearings Board (the Board) for review of the Hearing Examiner's decision. The Department of Ecology (DOE) and numerous environmental groups^[1](collectively, WEC) intervened as respondents. BNSF Railway Company (BNSF) intervened as a petitioner.

Before conducting a hearing, the Board granted DOE's and WEC's motions for summary judgment. The Board's ruling affirmed the Hearing Examiner's denial of Millennium's permit application based on the Hearing Examiner's exercise of SEPA substantive authority. Millennium then sought judicial review of the Board's decision, and we accepted direct review.

Millennium^[2] argues that the Board erred when it limited the scope of its review to the record created before the Hearing Examiner, an error which was compounded by the fact that the Board never obtained the full record before the Hearing Examiner and then did in fact accept extra-record evidence from DOE. Millennium next contends that the Board erred when it concluded that the Hearing Examiner properly considered impacts from the whole project, when it only sought permits for Stage 1. Similarly, Millennium argues that the Board erred when it concluded that the Hearing Examiner took due account of the impacts and mitigation related to Stage 1.

Finally Millennium contends that the Board erred in affirming the Hearing Examiner's exercise of SEPA substantive authority to deny its permit application. We affirm the Board's decision.

FACTS

I. Environmental Impact Statement

Millennium sought to build a coal export terminal in Longview, which would receive coal by train from various states. The trains would then be unloaded, stockpiled, and loaded by conveyors to ships which would transport the coal to Asia.

Because significant adverse impacts on the environment would likely result from the facility, SEPA required the preparation of an EIS. Cowlitz County and DOE served as co-lead agencies responsible for the EIS.

The EIS recognized that Millennium would construct the facility in two stages. At the completion of Stage 1, the terminal would have an annual throughput capacity of approximately 25 million metric tons of coal per year. At the completion of Stage 2, often termed "full build-out," the terminal would receive and send out approximately eight trains per day, load approximately 70 ships per month, and "have a maximum annual throughput capacity of up to 44 million metric tons of coal per year." Admin. Record (AR) at 511, 515.

The EIS analyzed the significant adverse impacts and proposed mitigation measures based on the facility at full build-out. The EIS discussed how

[i]f the proposed mitigation measures [identified in the EIS] were implemented, they would reduce but not completely eliminate significant adverse environmental impacts resulting from construction and operation of the [facility]. Unavoidable and significant adverse environmental impacts could remain for nine environmental resource areas: social and community resources; cultural resources; tribal resources; rail transportation; rail safety; vehicle transportation; vessel transportation; noise and vibration and air quality.

AR at 518. The EIS then analyzed those nine impact areas, and potential mitigations measures, in greater detail.

The EIS also contained a lifecycle assessment of estimated net greenhouse gas (GHG) emissions. While the EIS did not list GHG emissions among the project's significant adverse impacts, it assumed that Millennium would offset 100 percent of GHG emissions. Thus, the EIS determined that "[w]ith implementation of proposed mitigation, there would be no unavoidable and significant adverse environmental impacts from [GHG] emissions." AR at 981.

II. Shoreline Permits

In 2016, Millennium applied to Cowlitz County for a substantial development permit and a conditional use permit as required under the Shoreline Management Act of 1971 (SMA). In its permit application, Millennium noted that it would construct the facility in two stages, which would require separate permit applications.

Millennium's permit application only sought permits for Stage 1. Stage 1 consisted of the construction of two docks, one shiploader, conveyors, two stockpile pads, train unloading facilities, one rail track, and up to eight rail storage tracks. Stage 1 also included substantial dredging of the Columbia River. At the completion of Stage 1, the facility would have the capacity to ship 25 million metric tons of coal per year.

Stage 2 included the construction of an additional shiploader, two stockpile pads, and conveyors. At the completion of Stage 2, the facility would have the capacity to ship 44 million metric tons of coal per year.

The County issued a staff report recommending approval of Millennium's permit application with 36 conditions. The staff report recognized that Millennium's permit application only sought a permit for Stage 1 and that Millennium would have to submit a second permit application prior to any construction related to Stage 2. The staff report noted that "construction of Stage 2 would occur beginning at the completion of Stage 1." AR at 710. Although the staff report recognized that Millennium only sought permits for Stage 1, it analyzed the project's impacts at full build-out.

As required under Cowlitz County Code 19.20.050(A)(1), the staff report and Millennium's permit application were transmitted to the Cowlitz County Hearing Examiner for review.

III. Hearing Examiner

The Hearing Examiner held a three-day hearing.^[3] The County, Millennium, WEC, and other interested parties participated in the hearing; DOE did not. The parties submitted prehearing memoranda and exhibits, and presented testimony and argument. Near the outset of the hearing, Millennium confirmed that its permit application covered only Stage 1.

During the hearing, the Hearing Examiner gave Millennium and the County "the opportunity to propose reasonable mitigation" in addition to the mitigation measures discussed in the EIS. AR at 10. Millennium submitted an exhibit that summarized questions the Hearing Examiner posed. It largely related to mitigation measures and responded to the Hearing Examiner's questions on that subject.

It appears the Hearing Examiner thought that a great deal of Millennium's expert evidence conflicted with the EIS. The Hearing Examiner stated:

[Millennium] has presented the testimony of several experts whose opinions are in conflict with the []EIS but, in the absence of any appeal [of the EIS], this testimony is largely irrelevant to the issue of whether the ten unavoidable, significant adverse environmental impacts identified in the []EIS can be reasonably mitigated.

The conditions proposed in the Staff Report do not reasonably mitigate these impacts. At the conclusion of the hearing the County chose not to propose any new conditions, and [Millennium's] position is nearly identical to the County's. As a result, neither the County nor [Millennium] propose reasonable mitigation for any of the unavoidable, significant adverse environmental impacts identified in the []EIS.

AR at 56-57.

The Hearing Examiner's ruling documented findings related to SEPA. The ruling discussed the EIS's findings regarding adverse impacts, and the Hearing Examiner found that the project would result in adverse impacts. Regarding GHGs, the Hearing Examiner recognized that the EIS operated on the assumption that Millennium would mitigate 100 percent of the GHG emissions associated with the project. During the hearing, however, Millennium stated that it would not mitigate 100 percent of the GHG emissions but would instead only mitigate about 0.5 percent of the GHG emissions. Thus, although the EIS only identified nine significant adverse impacts, the Hearing Examiner found, with the addition of GHG emissions, that the project had 10 significant adverse impacts associated with it.

The Hearing Examiner's ruling then summarized Millennium's proposed mitigation:

• The parties' proposed mitigation for noise impacts is insufficient to ensure that Quiet Zones will be implemented.

• The parties do not propose any mitigation for the increased risk of cancer. Their only suggestion is that eventually the BNSF will upgrade to Tier 4 status, but currently only 6% of the BNSF fleet meets this standard. The remainder of the fleet will not be completely upgraded for more than 20 years.

• The parties' proposed conditions to mitigate traffic

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