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Sour Apple

Diesel refinery plan withdrawn after county launches review

Wednesday, January 22, 2020

Officials with Phillips 66 say they will discontinue plans to construct a large-scale renewable diesel plant on the Phillips 66 Ferndale refinery property at Cherry Point. The decision comes days after Whatcom County planners and the Washington State Department of Ecology determined the proposal likely posed adverse impacts on the environment, and called for a more extensive public review.

“While we believe the Ferndale Refinery is a strategic fit for this renewable diesel project, permitting uncertainties were leading to delays and higher costs,” Robert Herman, Phillips 66 executive vice president of refining, said in a statement. The company cited permitting delays and uncertainties as the reason for the decision to cancel a project that would have created the largest renewable diesel refinery on the west coast.

Ecology and Whatcom County Planning & Development Services last week had announced the beginning of an extensive public comment period to obtain community, tribal and stakeholder input “about what should be studied, what methods should be used, and what mitigation should be considered” in preparing an environmental impact statement according to the Whatcom County website. Public meetings had been scheduled in Anacortes, Ferndale, and Bellingham for early February.

“Ecology and Whatcom County are halting the project’s environmental review and cancelling public meetings and a comment period,” said Dave Bennett, Ecology communications manager.

RE Sources and other environmental policy leaders questioned why Phillips 66 pulled out of its renewable energy project.

“This move calls into question Phillip 66’s true intentions, considering the widespread rollback of bedrock environmental laws initiated by the Trump Administration with support from the fossil fuel industry,” Eddy Ury, Clean Energy Program manager for RE Sources said. “It appears Phillips 66 is willing to throw alternative fuels out the window to seed doubt and misinform the public about a 50-year-old environmental review process that has certainly not prevented them from expanding operations and making billions in profits in the years since.”

The proposed Green Apple diesel facility planned near Ferndale was intended to produce up to 250 million gallons of renewable fuel a year, according to the application. The plant would be constructed on about 40 acres of land near the Phillips 66 refinery.

Project applicants proposed to process fats, cooking and vegetable oils, and grease into renewable fuels, including diesel and lesser quantities of naphtha and renewable propane, the applicants say. The facility would use existing ship, rail and truck facilities at Phillips 66 to receive feedstock and ship out the finished product, although modifications are required to receive and ship the products.

Potential impacts from the proposed facility and refinery expansions include increased marine vessel traffic, alterations to wetlands and wildife habitat and an increase in greenhouse gas emissions.

Based on those potential impacts, Ecology and the county sought additional input from the public on what should be included in the environmental review of the project application. The initial stage, called scoping, would help shape the environmental impact statement (EIS), a comprehensive study that governs the approval of the project. Permit decisions are made after completion of the EIS.

“The EIS will examine the probable, significant and adverse impacts resulting from the construction and operation of the proposed project,” Ecology noted in a press release. “This includes impacts to both the natural environment and nearby communities through study of air quality, plant and animal habitat, transportation, and cultural resources. The EIS will also analyze how impacts can be reduced or eliminated through mitigation.”

“Green Apple would utilize existing infrastructure within parts of the refinery,” the project applicants note in their description of the project. “To operate, the facility would also depend on hydrogen supply for an external source, which would require construction of a new hydrogen plant that would be owned and operated by a third party.

“Green Apple would in no way increase the currently permitted annual crude throughput of the existing Phillips 66 Ferndale refinery,” the applicants claim. “The sole purpose of Green Apple is to construct a faciity that would process renewable feedstocks to produce renewable fuels. The project does not include new or expanded facilities that would facilitate increased shipment of petroleum feedstocks or processing of fossil fuels at Cherry Point.”

“After submitting the application on Dec. 19, the large-scale biofuel refinery was on track to be approved by 2021, and the permitting process was already moving quickly,” Ury observed. Meanwhile, Phillips 66 has lobbied against a Clean Fuel standard in Washington that would incentivize products like renewable diesel in the state’s fuel market inline with similar rules in California, Oregon and British Columbia.

“Although we are disappointed in this result, REG is undeterred and continues to develop numerous opportunities to grow our renewable diesel production,” Cynthia “CJ” Warner, Renewable Energy Group CEO, said of the decision to withdraw the application. “We remain dedicated to positively impacting the environment and reducing the carbon intensity of transportation fuels through the application of REG’s proven technologies.”

 In 2018, REG produced 502 million gallons of cleaner fuel delivering over 4 million metric tons of carbon reduction.Both companies expressed appreciation to Washington state, Whatcom County, local officials and other stakeholders for their advice and support during the process and will work with them to wind down the ongoing permitting process.

“Phillips 66 began this project with Renewable Energy Group in 2018 with full awareness that major projects like this are always required to go through the standard state review process—this is the process that ensures environmental impacts are understood before permitting decisions are made,” Ury said.

“This project could have been a positive step toward more sustainable alternatives to fossil fuels, and was the manifestation of the oil giant’s public commitment to seek out innovative sources of renewable fuels,” Ury said. “RE Sources is disappointed that Phillips 66 won’t be following through on that commitment to the public.” 

A draft EIS was expected to be available for public review and comment early in 2021.

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