SEATTLE — The Washington Supreme Court threw a major wrench Thursday in plans for a big oil terminal on the coast, saying the proposal must be reviewed under a 1989 state law designed to protect marine life following the Exxon Valdez spill in Alaska.

In the latest of a string of victories for tribal and environmental groups challenging fossil fuel projects in the Northwest, the justices unanimously reversed decisions by a state board and the state Court of Appeals, which held the Ocean Resources Management Act did not cover plans by Houston-based Contanda to ship crude out of Grays Harbor.

Kristen Boyles, an attorney with the environmental law Earthjustice, which represents groups that challenged the project, called the opinion “vitally important for Washington state coastal protection.”

“The opinion is clear that extra protective measures apply to these kinds of crude oil projects,” Boyles said. “The requirements are such that I don’t believe the terminal will be able to go forward. It’s dead.”

Westway Terminal, recently renamed Contanda, wants to expand its existing methanol facility in Hoquiam to receive up to 17.8 million barrels of oil a year, including from the Bakken region of North Dakota and Montana, for shipping to refineries in California and Puget Sound. The plans include the construction of four aboveground storage tanks that would each hold up to 8.4 million gallons, with a trainload of oil arriving every three days.

In an emailed statement, Contanda President G.R. “Jerry” Cardillo said the company disagrees with the ruling but will work to make the project happen.

“Considering no review criteria have ever been applied to any other project since the law’s enactment, we will work with the city of Hoquiam to determine the path forward,” he said. “We look forward to building and operating this project safely under the stringent guidelines laid out in the Environmental Impact Statement, and to providing jobs, tax revenue and other economic benefits to the Grays Harbor community.”

In court, the company argued — and Hoquiam, the state Department of Ecology and Court of Appeals agreed — that the Ocean Resources Management Act did not apply to the proposal because it was an expansion of an existing terminal and because the project would be located onshore, rather than in the water.

The Supreme Court said that reading of the law was far too narrow.

“Because the entire purpose of respondents’ projects is to store and transfer fuel from Washington’s coast to Washington’s waters, the projects fit squarely within ORMA’s broad reach,” Justice Susan Owens wrote.

Among other requirements, such projects cannot be permitted under the law unless applicants show “significant local, state, or national need” for the proposed activity; that there is no reasonable alternative to meet that need; and that there will likely be “no long-term significant adverse impacts to coastal or marine resources.”

The Quinault Indian Nation, Sierra Club and community groups challenged three oil terminal projects initially proposed for Grays Harbor, successfully forcing additional environmental reviews in 2013. Two of the projects have dropped out, leaving only the Contanda proposal.

In late September, the Department of Ecology issued its final environmental review, which called for dozens of steps to protect the coast, including tug escorts for oil tankers in the harbor and other spill prevention and response measures. But the review also found that “no mitigation measures would completely eliminate the possibility of a spill, fire, or explosion, nor would they completely eliminate the adverse consequences.”

Hoquiam had been weighing whether to grant a permit for the project. City Administrator Brian Shay did not immediately return a message seeking comment, and the Department of Ecology was reviewing the court’s decision.

“We are just elated,” said Arthur Grunbaum, president of Friends of Grays Harbor. The 1989 law, he said, “gives recognition to the sustainable resources within the harbor — the fishing industry, the crabbing industry, those resources that depend on clean water. This project would dramatically affect those resources in the long run.”

Early this month, Washington’s outgoing public lands commissioner said he would refuse to allow the state’s aquatic lands to be used for a major coal-export terminal along the Columbia River. Last spring, the Army Corps of Engineers and the state Department of Natural resources denied necessary permissions for the Gateway Pacific Terminal, a proposed deep-water coal port at Cherry Point, north of Bellingham, saying the terminal would interfere with the Lummi Nation’s treaty-reserved fishing rights.

A proposal to build the nation’s largest oil-by-rail marine terminal on the Columbia River in Vancouver, Washington, remains alive. The Tesoro Savage Vancouver Energy terminal would handle about 360,000 barrels of crude oil a day.


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