Terminal will meet growing demand

By Vancouver Energy On June 27, 2016

Today was the kickoff of the adjudicative proceedings for the Vancouver Energy project in front of the Energy Facility Site Evaluation Council (EFSEC). (Scroll down to see our post last week for more details about how the hearings work.)

In his opening statement, Vancouver Energy attorney Jay Derr said EFSEC should keep its review to the project at hand:

EFSEC’s review should be focused on the facility site—a heavy industrial site in the middle of a heavy industrial zone with rail and marine terminal infrastructure already in place to accommodate the Vancouver Energy terminal.

 

...When you focus on the terminal, it is not really that complicated. It may be controversial, but it is not complicated.

 

The project is not a refinery or petroleum processing facility. It is simply a transfer operation—where crude oil arrives by train, is unloaded into a storage tank and then loaded onto vessels for shipment to refineries on the West Coast.

 

You will hear evidence of how the terminal will be designed and operated to meet or, in many cases, exceed the very latest regulatory and industry standards for a safe operation that protects the people of the local community and preserves and protects a healthy environment.

Brad Roach, senior director for market analysis and senior economist at Tesoro, led off the testimony on Monday. He was the first of many witnesses that will testify on behalf of Vancouver Energy and other project supporters over the first two-and-a-half weeks of the hearings. Below is a reflection of both Roach’s written and in-person testimony.

The VancBrad 3ouver Energy oil-by-rail terminal is necessary, Roach said, because it provides a flexible way to meet growing demand for petroleum until alternative fuel sources are viable and widely available. The terminal would not increase demand for petroleum but would help meet the demand that’s already there. In the six-state region that Vancouver Energy would serve (Washington, Oregon, California, Nevada, Arizona and Alaska), petroleum provides 95 percent of the energy for transportation.

In California, which provides 60 percent of the gas consumption across the six-state region, gas consumption is expected to grow each year until 2020, and decrease 0.5 percent each year after, Roach said.

While demand for petroleum remains strong, Tesoro’s four refineries in the six-state region (which account for 25 percent of the region’s refining capacity) need the Vancouver Energy terminal to provide an economy of scale in order to efficiently access domestic crude oil from U.S. producers.

Rail, as opposed to a pipeline, is the only viable way for the four Tesoro refineries on the West Coast to access the domestic oil from North Dakota and Montana, Roach said. There are no crude oil pipelines connecting the West Coast to the rest of the U.S. mainland, and the only pipeline to the West Coast enters the U.S. from Canada. That pipeline has not nearly enough capacity to meet the needs of Tesoro’s refineries.

Unlike a pipeline, the Vancouver Energy terminal utilizes existing rail infrastructure to meet current needs, as opposed to building an invasive new transport system over a massive geographic footprint.

While some people have suggested electric cars could supplant gas-powered vehicles, Roach cited studies and analyses indicating that electric cars won’t gain the wholesale acceptance needed to turn over the West Coast car fleet until after the 15-year expected lifespan of the Vancouver Energy terminal, if ever. About 98 percent of U.S. cars have an internal combustion engine, with gasoline as the primary fuel.

The California market alone has 34 million registered vehicles, Roach said. The continued need for transportation fuels such as gasoline and diesel will be driven by the large and growing population of cars powered by internal combustion engines.