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A3 THE DAILY ASTORIAN • MONDAY, APRIL 22, 2019 Kalama methanol plant may be misleading public Pitched to combat climate change By MOLLY SOLOMON Oregon Public Broadcasting Nearly four years ago, Washington Gov. Jay Ins- lee touted a new company that was coming to Kalama to revolutionize the metha- nol market. On that sunny August day on the banks of the Columbia River, Inslee spoke alongside city and county leaders, business people and executives from NW Innovation Works , a Chinese-backed company looking to build three mas- sive natural gas to methanol plants in southwest Wash- ington state. “I think this bodes well for Washington’s future,” Inslee told the crowd. The governor praised the creation of hundreds of family-wage jobs, millions of dollars in local tax reve- nue, and the plant’s biggest selling point: the methanol it created from natural gas could help clean up China’s plastics industry. The project has been pitched by its developers and the governor as one way to combat climate change. They say making methanol from natural gas in plants that use renewable power could eventually displace many of China’s dirtier coal-based plants. “This is a fantastic step forward, because the carbon savings will be equivalent to taking millions, perhaps 6 million cars, off the road,” Inslee said in a promotional video at the time. But the climate change-crusading gover- nor running for president may not have know that NWIW was selling a differ- ent story to investors — one less focused on producing cleaner methanol for plastics and more on an opportunity to buy into a new methanol supply chain to fi ll China’s insatiable appetite for fuel. Documents obtained by Oregon Public Broadcasting show that NWIW is saying one thing to state regulators while eyeing China’s fuels market. As recently as Jan- uary 2019, PowerPoint pre- sentations shown to poten- tial investors in the Kalama facility detailed the compa- ny’s apparent intent to burn their methanol for fuel in China. This directly contradicts what the company has been publicly emphasizing for years, that its end product would only be used for ole- fi ns, the building blocks of plastic. Resisting fossil fuel Washington has increas- ingly resisted the fossil fuel industry that has descended upon the state in recent years. Environmentalists have especially scrutinized energy projects looking to export fuel. If a project like the one in Kalama were to go down that path, it could call into question the project’s envi- ronmental impact analy- sis, as well as qualify for a more stringent regulatory path . Fierce local opposition already shuttered plans for NWIW to open a Tacoma methanol plant, and plans for another in Port West- ward are on hold. In a March 2018 Power- Point presentation shown to Satori Partners Inc., a U.S.- based investment group with experience doing busi- ness in Asia, NWIW lays out a proposal with a very different product. More than a dozen pages discuss burning methanol as “clean fuels for industries and transportation.” One slide features a ship carrying “liquid sunshine” and refers to the metha- nol produced in Kalama as “clean crude” and “conve- nient LNG.” NW Innovation Works The proposed site at the Port of Kalama where NW Innovation Works is proposing a 90-acre methanol plant. Ashley Ahearn/KUOW A grain ship on the Columbia River at the Port of Kalama, which could one day also host a methanol plant. In the 26-page presen- tation, only one slide is devoted to methanol-to-ole- fi n production or plastic materials. That narrative fl ies in the face of every- thing developers have told the public — and state regu- lators in the middle of deter- mining whether the project moves forward. “Obviously the rea- son that they’re not tell- ing people, or going out of their way to say it’s not for fuel, is because that makes the green- house gas anal- ysis less favor- able to them,” said Dan Serres, con- servation direc- tor of environ- mental group Columbia Riverkeeper, referring to the company’s most recent environmental review that is supposed to take into account the cradle-to-grave emissions of the project and its end product. “This changes the analy- sis quite signifi cantly if this isn’t going into the plastics manufacturing industry,” Serres added. Columbia Riverkeeper has challenged earlier per- mits issued to the company and has been vocal oppo- nents of the Kalama meth- anol plant, along with other fossil fuel industries that have eyed the Northwest for potential sites. The documents were shared with Oregon Pub- lic Broadcasting by Colum- bia Riverkeeper and Satori co-partner Steven Tarace- vicz, who says he and his Shenzhen, China-based partner were approached by NWIW to invest in the Kalama project in late 2018. Taracevicz said his com- pany was approached by NWIW leadership, includ- ing current CEO Simon WANTED Alder and Maple Saw Logs & Standing Timber Northwest Hardwoods • Longview, WA Contact: John Anderson • 360-269-2500 Zhang and the compa- ny’s former Chief Finan- cial Offi cer Edward Sappin, who authored the leaked presentation. Despite presentation slides that show an arrow on a map from Kalama to images of Chinese trucks and cars in Asia, NWIW maintains all methanol pro- duced at the Kalama facility will only be used for plastics and materials. A company occasions, project backers have voiced their intention to bring natural gas-created methanol into China’s fuel market. Wu Lebin, chairman of the Chinese Academy of Sciences Holding Co. , the main backer of the Kalama project, has publicly said the fuel will be burned as feed- stock for fuel and industries. In an April 2017 China Daily report, Lebin told ‘IF YOU ARE TAKING METHANOL AND USING IT AS A TRANSPORTATION FUEL, THEN YOU’RE BURNING IT. ’ Greg Dolan, CEO of the Methanol Institute offi cial acknowledged that there is a demand for meth- anol as fuel but said that’s a “farther down the road” conversation. Both PowerPoint presen- tations were sent by Tarace- vicz to Columbia River- keeper six weeks ago. “This is certainly the most concrete piece of evi- dence that they really do consider this a fossil fuel export project,” said Colum- bia Riverkeeper attorney Miles Johnson. Voiced their intention Speculation that the com- pany’s proposed Kalama refi nery could tap into the methanol fuel market is not entirely new. On multiple reporters about his com- pany’s $2 billion metha- nol plans, using the Kalama plant as evidence that China is investing heavily in North American shale gas “in order to commercially extract methanol for use as an environmentally sustain- able motor fuel.” Lebin went on to say his company is building “a supply chain for metha- nol, potentially China’s next alternative industrial and transport fuel,” according to a December 2017 article in Reuters. NW Innovation Works also sponsored a two-day workshop at Stanford Uni- versity in 2017 on methanol production titled “Oppor- Astoria Warrenton Crab, Seafood & Wine Festival tunities and Challenges for Methanol as a Global Liq- uid Energy Carrier.” Con- ference reading materials fail to even mention using methanol to create olefi ns or plastics, again downplay- ing a point that is a major talking point when the com- pany talks about its plans for the Kalama facility. More recently, Lebin’s bio for an upcoming busi- ness conference for inves- tors describes NWIW’s Kalama facility as “one of the most innova- tive clean energy projects in the nation” that will provide methanol “to China as clean feedstock for pet- rochemicals and fuels.” NWIW confi rmed the PowerPoint slides were indeed created by the com- pany and presented to inves- tors. However, they say mention of fuel was merely “educational” and that the methanol plant in Kalama was still on a pathway to be used for materials. “Our desire is that the intentions and commitments for the materials use and pathway for NWIW Kalama project methanol be unam- biguous,” Kent Caputo, the company’s chief operating offi cer and general coun- sel, wrote in an email to Oregon Public Broadcast- ing . “Contractual and regu- latory obligations and over- sight can and should be put in place and enforced to ensure compliance with the intended and limited materi- als, such as methanol-to-ole- fi n, outcome.” Over the past decade, China’s appetite for metha- nol has grown considerably. Today, China is the world’s largest market for methanol, consuming anywhere from 60 million to 68 million met- ric tons per year, according to market analysts from S&P Global Platts. That’s more than half the global demand. “That makes it a very important market from a global perspective,” said Esther Ng, senior editor for S&P Global Platts’ petro- chemicals desk. Ng says the country’s domestic methanol production is about 58 mil- lion metric tons per year. The rest — the other 2 million to 10 million metric tons — is made up through imports. “So China is always looking out for new sources of methanol,” she said. China uses methanol for primarily two things: to con- vert into olefi ns for plastics and other materials or as a fuel for transportation and industries. “We’re using methanol now in industrial boilers used to run manufacturing facilities, pharmaceutical plants, hotels and apartment complexes,” said Greg Dolan, CEO of the Metha- nol Institute, a Washington D.C.-based industry group. Dolan says methanol is appealing to the Chinese government, especially when used to create prod- ucts. By transforming the methanol in a plastic mate- rial, it traps the carbon from being released and reduces further greenhouse emis- sions. But he says that idea begins to get lost if the meth- anol is instead used as fuel. “That’s an important dis- tinction,” Dolan said. “If you are taking methanol and using it as a transporta- tion fuel, then you’re burn- ing it. Methanol will reduce a lot of emissions compared to gasoline or diesel. But it’s still a fuel that’s burning, and those produce green- house gas emissions.” Under review The debate over how much greenhouse gas emis- sions are released from the Kalama project and the ultimate use of its meth- anol are at the heart of a study requested by the state Shoreline Hearings Board. NWIW hired a consultant, California-based Life Cycle Associates, to complete a 241-page cradle-to-grave analysis that was included in the draft supplemental envi- ronmental impact statement , which is under review. The study concludes that the Kalama facility’s use of liquifi ed natural gas and the facility’s use of renew- able energy would result in a reduction of global green- house gas emissions of between 9.6 million and 12.6 million metric tons per year. A large part of that hinges on the belief that this plant would displace coal-based methanol and would only be used to create plastics. Seaside AAUW Scholarship Foundation presents: MOVIE DOLLARS for SCHOLARS Raising money for women of all ages who want to go to college or continue their college education Presenting Sponsor Celebrate the delicious bounty of the Oregon Coast April 26, 27 & 28 at the Clatsop County Fairgrounds! Friday: 4 - 9pm · $15/Adult Saturday: 10am - 8pm · $15/Adult Sunday: 11am - 4pm · $10/Adult AstoriaCrabFest.com Live music on two stages! Entertainment Sponsor Visit website for more pricing info, shuttle routes, list of vendors, volunteer sign-up and more. Academy Award BEST PICTURE Enjoy a GREAT movie, popcorn and a soft drink with friends and family! Wednesday, April 24 th , 2019 at 4pm • $ 30 Times Theater, 133 Broadway, Seaside Advanced tickets available at the Times Theater Box Office Checks or Cash only please
