01.19.17

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Washington Supreme Court Orders Enhanced Environmental Scrutiny for Coastal Fossil Fuel Projects

PRACTICE GROUPS

By Gus Winkes and Emerson Hilton

Key Takeaways

  • The Washington Supreme Court issued a unanimous decision with significant implications for large coastal developments involving fossil fuels and other non-renewable resources.
  • The Court held that a 1989 state statute requires permitting authorities to evaluate fossil fuel projects under stringent review criteria.
  • Proponents of large coastal developments may be subject to a potentially time-consuming and expensive environmental review process.

Groundbreaking Decision in Case of First Impression

In a ground-breaking decision issued last week, the Washington Supreme Court held that the state’s Ocean Resources Management Act (ORMA) requires a serious environmental review before permitting authorities may approve large fossil fuel development projects that could adversely impact ocean or coastal resources.  Interpreting ORMA for the first time, the Court ruled that the City of Hoquiam improperly failed to apply the statute’s project review criteria when issuing shoreline substantial development permits under the Shoreline Management Act to crude oil shipping terminal projects proposed for the Port of Grays Harbor.

The Court’s statutory analysis largely tracked the arguments in an amicus brief filed by Riddell Williams attorneys on behalf of the Coalition of Coastal Fisheries (CCF).  CCF is a trade group representing the interests of commercial fishing organizations, oyster growers, fish processors, and charter boat operators.

Court Breathes New Life Into 1989 Coastal Protection Law

The legislature adopted ORMA in 1989 after the Exxon Valdez oil spill in Alaska and a prominent fuel oil spill near the mouth of Grays Harbor.  ORMA establishes project review criteria for “[u]ses or activities that require federal, state, or local government permits or other approvals and that will adversely impact . . . existing ocean or coastal uses.”  RCW 43.143.030(2).  ORMA prohibits authorization of such projects unless they meet or exceed all of the listed criteria, which include:

  • A demonstrated significant local, state, or national need for the use or activity;
  • No reasonable alternative to meet the need;
  • No likely long-term significant adverse impacts to coastal or marine resources or uses;
  • Reasonable steps to avoid or minimize adverse environmental, social, and economic impacts;
  • Compensation to mitigate adverse impacts to coastal resources or uses; and
  • Performance bonding to ensure site rehabilitation after the use or activity is completed.

 

See id.

The state’s Shorelines Hearings Board and the Court of Appeals both determined that ORMA’s project review criteria did not apply to the proposed Grays Harbor projects because they were not “ocean uses” or “transportation” under regulations promulgated by the Department of Ecology (Ecology) to implement ORMA.

The Supreme Court disagreed, stating in a unanimous opinion that “the plain text of the statute expresses the intent that [the oil terminal] projects be reviewed pursuant to ORMA.” Slip Op. at 15.  “The policy encapsulated in ORMA is to carefully review development projects that involve nonrenewable resources and pose a risk of damage to the environment in Washington’s sensitive coastal waters.” Id.

The Court also found that Ecology’s regulations required the same outcome. Under those regulations, the Court held that the oil terminals are subject to ORMA’s project review criteria not only as “ocean uses” but also as “transportation” and as “coastal uses.”  The Court rejected Ecology’s position that the projects did not meet these regulatory definitions and agreed with CCF that an agency cannot “effectively amend [a] statute” by rule. Id. at 17-18.

A “Balancing Tool”: Questions and Implications For Future Cases

The Court’s opinion leaves open a host of questions about how ORMA’s project review criteria will be applied on remand and in future cases. Ecology’s regulations, which include more detail than the text of ORMA itself, may offer some guidance. See WAC 173-26-360(6)-(7).  Still, disagreement about how to demonstrate a significant need for a proposed use, how to show that there is no reasonable alternative for meeting the need, the scope of compensation and required performance bonding, and other vital issues will likely have to be resolved in future rulemakings or litigation.  With only one court interpretation on the books, the full extent of ORMA’s reach will be clarified over time.

As the Court explained, ORMA is intended to be a “balancing tool.” Slip Op. at 9.  The statute does not preclude coastal development across the board.  But for large projects involving non-renewable resources like fossil fuels, in particular, the Court’s decision will add uncertainty and expense to the project planning and permitting processes. Looking ahead, businesses and other entities making investments along Washington’s coast should carefully evaluate whether their activities could trigger additional scrutiny under this revitalized 1989 statute.


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The Riddell Williams Environmental Practice Group has played a key part in addressing some of the most challenging environmental issues in the Pacific Northwest and throughout the nation.  Our group’s clients include utilities, pulp and paper manufacturers, petroleum companies, regional energy companies, airlines and airfreight carriers, steel manufacturers, waste management companies, technology businesses, real estate development partnerships, private landowners, and some of the state’s leading environmental groups.

The opinions expressed in this article are those of the authors and do not necessarily reflect the views of Riddell Williams or its clients.  This article is for general informational purposes and is not intended to be, and should not be taken as, legal advice.