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A War of Words, or How Not to Have a Meaningful Conversation


December 2014

Cover Story

A War of Words, or How Not to Have a Meaningful Conversation

by Terry Wechsler

Terry Wechsler, a licensed Washington attorney, is a co-founder of Protect Whatcom, the President of Whatcom Watch, and a frequent contributor about fossil fuel transportation proposals in Whatcom County.

At the October Northwest Business Expo and Conference1 hosted by the Whatcom Business Alliance (WBA), Executive Director Tony Larson told a crowd of more than 100 area business leaders the WBA commissioned a study to measure the economic contribution of existing jobs at Cherry Point. The study, titled “Employment at Cherry Point,”2 is a response to claims Cherry Point harbored “killer jobs,” Larson stated in introducing the study.

The Original Question …

“Killer Jobs” was part of the title of an April Northwest Citizen article,3 “Killer Jobs or Industrial Job Killers?” which addressed industrial activity at Cherry Point. It and another article, “Friends and Neighbors?”4 were the subject of a July op ed5 in The Bellingham Herald by co-chairs of the Northwest Jobs Alliance (NWJA).

NWJA describes itself on its website, nwja.org as a “non-partisan organization that will focus on supporting economic vitality and growth associated with the Cherry Point industrial area,” according to their website, nwja.org.

That group claimed my articles illustrated a growing movement by “strident and aggressive advocates of de-industrializing our economy, even threatening the high-wage jobs at the existing Cherry Point industries.”

In truth, the articles addressed some of the known environmental impacts of industrial activity throughout the county. “Killer Jobs…” addressed the fact that Whatcom County rezoned the Cherry Point Urban Growth Area (UGA) heavy impact industrial (HII) without benefit of an environmental study to determine the appropriateness of industrial activity adjacent to an aquatic reserve.

The county is in the process of considering job growth projections for the 2016 amendments to the Comprehensive Plan for the Cherry Point Urban Growth Area (UGA). The county announced plans to amend the environmental impact statement for the Comp Plan to support revised projections for growth of 890 jobs.

The issue is that the county zoned the Cherry Point UGA HII without benefit of an environmental impact statement (EIS) under the State Environmental Policy Act. The Comp Plan begins with a conclusion: “The Cherry Point industrial area is an important and appropriate area for industry due to its access to deep water shipping, rail, all-weather roads, its location near the Canadian border, and its contribution to the County’s goal of providing family wage jobs.”6

“Killer Jobs…” noted, “Even the Washington Department of Natural Resources (DNR) states in the Aquatic Reserve Management Plan, ‘existing industrial uses at Cherry Point are not incompatible with goals for the long-term protection of the aquatic resources within and adjacent to the aquatic reserve,’” 7 without citing a study to support the conclusion.

In a phone interview conducted earlier this year, Roberta “Birdie” Davenport, DNR Aquatic Reserves Program Manager, confirmed that she is not aware of a comprehensive study supporting the conclusion that industrial activity is appropriate at Cherry Point.

Avoiding the Question by Changing the Subject …

“Employment at Cherry Point” was jointly prepared by economists Hart Hodges and Bill Beyers of Western Washington University. They did not analyze environmental impacts. Further, they did not measure lost economic opportunity, public costs for rail and other necessary infrastructure, public safety, emergency response, and environmental damage.

The WBA, according to Hodges, asked only for measures of economic contribution of jobs and tax revenues in the Cherry Point UGA. They did not request even an economic cost benefit analysis, though that would be “a lot more thorough and a lot more responsible,” Hodges said, in informing a community dialogue about the relative benefit of heavy impact industrial activity near the Aquatic Reserve.

Hodges described “Employment at Cherry Point” as “the beginning of the conversation.”

Local industrial jobs boosters nonetheless hailed the report as the last word. An Oct. 29 email from the Northwest Jobs Alliance proclaimed, “There are those who have been advocating for the de-industrialization of the Cherry Point area. Based upon the facts so carefully laid out in the study, they may want to consider what this would do to their neighbors and their communities.”

The Good …

As described above, the articles cited by NWJA and WBA do not advocate for de-industrialization of Cherry Point. Industrial jobs are sacred cows. The report from Hodges and Byers illustrate that well by assigning specific numbers to the benefits:

• 11 industrial employers at Cherry Point provide over 2000 direct jobs;

• Wages paid at Cherry Point are some of the highest in the county;8 and

• The three largest industries — BP, Intalco, and Phillips 66 — pay more than $14.5 million annually in state and local property taxes. (The refineries are currently appealing their tax rates).9

The Bad …

Those industries, however, are also allowed to externalize costs associated with their activities. For example, the refineries have shifted from receiving all crude by vessel or pipeline, to growing dependence on Bakken crude from North Dakota shipped by rail. Safe shipment requires upgraded and well-maintained tracks. The state Department of Transportation is currently concluding the state- and federally-funded Cascade Corridor upgrades which are costing taxpayers $54 million.10

These public expenditures amount to public subsidies of private activity. More difficult to measure are the costs associated with direct and indirect impacts to the environment, human health, and economies. For instance, the U.S. Environmental Protection Agency released a report in October which revealed BP, Intalco and Phillips 66 are on the Top 10 list of Washington’s CO2 emitters. Further, as previously described in “Friends and Neighbors?:”

• Alcoa Intalco Works is the largest stationary source of carbon monoxide in the area, producing more than all vehicles in Whatcom County combined.11 It is a major emitter of particulate matter, fluorides, sulfur dioxide, nitrogen oxides and hydrocarbons.12 It is also the leading regional source of workplace asbestos exposure, according to the Mesothelioma Cancer Alliance.

• BP U.S. led the nation in refinery deaths between 1995 and 2005 with 10 times Exxon’s.13 Locally, Washington’s Department of Labor and Industries has fined BP Cherry Point twice in the last four years for serious safety violations putting workers’ lives at risk.14 BP is currently appealing the later fine, assessed in 2012 according to a September 2012 Bellingham Business Journal article.

• Phillips 66 Ferndale Refinery, contrary to regulators’ requests, persists in using hydrofluoric acid to boost octane rates in spite of the extreme danger associated with a spill and availability of safer alternative chemicals.15 Crosscut reported in March 2011 the refinery holds the record in the state for NWCAA fines for emission violations.

And the Ugly …

The risk of a major crude by rail incident raises the stakes for impacts and public costs. In the wake of the Lac-Megantic disaster, American International Group Inc., the largest commercial insurer in the U.S. and Canada, has announced it will offer a $1 billion insurance policy for crude by rail shipments. Current estimates are that that amount would cover only two-thirds of the costs associated with the loss of lives and property, and environmental cleanup, associated with the Alberta, Canada, incident.16 Further, neither the state nor federal governments require shippers or railroads to carry minimum amounts of insurance or indemnify public agencies that fund response and clean-up costs.

Avoiding a Conversation by Declaring War …

Measuring job multipliers and tax revenues begs the real question of how Whatcom County can build a sustainable economy that grows while protecting the communities’ health, the environment and water resources for future generations.

Whatcom County is not the only area facing this dilemma. The New York Times reported in October that Richard Berman, a leading consultant to the fossil fuel industry, recently told executives at the June meeting of the Western Energy Alliance in Colorado Springs, “Think of this as an endless war. … You can either win ugly or lose pretty.”

Berman’s strategy related to a campaign to discredit opponents of fracking in a campaign currently ramping up nationally. That is clearly not a “thorough and responsible” approach — to use Prof. Hart Hodges’ words — to addressing difficult questions related to short- and long-term economic security, energy policy and environmental protection.

Locally, we have a choice. We can have a real conversation, or we can have a war of words.

Endnotes

1. https://www.whatcombusinessalliance.com/events/events-archive/2014-northwest-business-expo-speaker-series-registration/.

2. Hart Hodges and Bill Beyers, Employment at Cherry Point, Oct. 2014, http://media.bellinghamherald.com/static/downloads/Employment-at-Cherry-Point-102314.docx.

3. Terry Wechsler, Killer Industrial Jobs or Long-term Job Killers?, Northwest Citizen, Apr. 6, 2014, http://www.nwcitizen.com/entry/job-killers-versus-killer-jobs-why-commenting-on-the-eis-for-comp-plan-revi?search=&category=&author=2423.

4. Terry Wechsler, “Friends and Neighbors”? Northwest Citizen, Apr. 21, 2014, http://www.nwcitizen.com/entry/friends-and-neighbors?search=&category=&author=2423. That article also discusses the 27 toxic waste sites the Department of Ecology describes as awaiting cleanup throughout Whatcom County.

5. John Huntley and Brad Owens, Economic prosperity, quality of environment equally important, The Bellingham Herald, July 28, 2014, http://www.bellinghamherald.com/2014/07/28/3765029_economic-prosperity-quality-of.html?rh=1#storylink=cpy. The rebuttal op ed appeared shortly thereafter. Terry Wechsler and Fred Felleman, Whatcom County must weigh costs of industry’s economic, environmental impacts, The Bellingham Herald, Aug. 6, 2014, http://www.bellinghamherald.com/2014/08/06/3786001/whatcom-county-must-weight-costs.html.

6. Urban Growth Area Review: Cherry Point UGA Preliminary Growth Allocation Proposal, Dec. 2, 2013, p.4, co.whatcom.wa.us/pds/plan/lr/compplan/pdf/cherry-point-allocation-proposal-20131202.pdf.

7. Cherry Point Aquatic Reserve Management Plan 2010, DNR, Nov. 2010, p.50, http://www.dnr.wa.gov/Publications/aqr_cp_mgmt_plan_2010.pdf.

8. While county wages average $41,334 per annum, the average for Cherry Point skews very high in the Hodges/Byers study because the refineries report to the state that their workers average wages of $156,210 per annum. At the national level, the Bureau of Labor Statistics (USBLS) reports that the annual mean wage for all occupations in the petroleum and coal products manufacturing sector is $69,600 as of May 2013. In a phone interview, Hart Hodges stated he had no independent verification of the figures reported by the refineries.

9. John Stark, Millions in tax dollars at stake as Whatcom oil refineries dispute property taxes, The Bellingham Herald, Mar. 3, 2014, http://www.bellinghamherald.com/2014/03/03/3503310/millions-at-stake-as-whatcom-oil.html#storylink=cpy.

10. http://www.wsdot.wa.gov/projects/rail/corridorreliabilitynorth.

11. John Stark, Review of comments on Cherry Point coal terminal will take months, The Bellingham Herald, Jan. 27, 2013, http://www.bellinghamherald.com/2013/01/27/2853003/review-of-comments-on-cherry-point.html#storylink=cpy. Northwest Clean Air Agency (NWCAA) Director Mark Asmundson noted in the agency’s comment submitted during scoping for GPT, Alcoa’s CO emissions are so high, any additional emissions “could put the air in the area out of compliance with federal standards,” possibly requiring suspension of all industrial activity pending legal levels.

12. BART Determination Support Document for Alcoa Intalco Works, Ferndale, WA, Wash. Dep’t of Ecology, Aug. 2009, file:///C:/Users/wechslerlaw/Documents/Whatcom%20Watch/Articles/Dec%202014-Friends%20and%20Neighbors/IntalcoBARTAnalysis-02042010-Final.pdf.

13. Lise Olsen, BP Refinery Deaths Top Industry in U.S., Seattle PI, May 15, 2005,

http://www.seattlepi.com/business/article/BP-refinery-deaths-top-industry-in-U-S-1173466.php.

14. John Stark, Washington State Fines BP for Safety Violations at Refinery, The Bellingham Herald, May 5, 2010, http://www.myrtlebeachonline.com/2010/05/05/1459467_washington-state-fines-bp-for.html?rh=1#storylink=cpy.

15. http://crosscut.com/2011/03/01/bellingham/20676/Refinery-chemical-Bellinghams-safety-at-risk.

16. Bloomberg, Insurer unveils $1B policy to cover rail catastrophes, The (Toronto) Star, Oct. 9, 2014, http://www.thestar.com/business/2014/10/09/insurer_unveils_1b_policy_to_cover_rail_catastrophes.html.


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