Business Columns & Blogs

Bill Virgin: A study in contrasts: Port's success story; Oregon's health debacle

Here is some stuff I know, the (insert clever pop-culture or weather-related reference here) edition:

• For the most part the Port of Tacoma, unlike places such as Vancouver, Grays Harbor and Whatcom County, has steered clear of the contentious battles over energy export terminals.

There was, for a time, a proposal by Targa Sound Terminal to build a distribution terminal and tank farm on the former Kaiser Aluminum smelter property, but Targa (which has an existing facility on the Hylebos) decided to stay put.

But now Northwest Innovation Works, a consortium of agencies and interests, mainly from China, wants to build a plant (on the same ex-Kaiser site) for converting natural gas to methanol for use as a feedstock in the production of olefin. The Tacoma plant is the latest of three the company is proposing, the others being at the Port of Kalama and across the Columbia at Clatstaknie, Oregon.

By comparison with the proposals for oil and coal export terminals, what Northwest Innovation Works wants to build checks so many boxes as pluses the port itself couldn’t have drafted the idea much more favorably.

The port gets a long-term tenant that will put a property that hasn’t produced income in a decade back into revenue-generating mode. It also gets a business that diversifies its overall portfolio from an over-reliance on container traffic. Shipping lines can adjust routes, change frequencies of ship calls or drop them altogether and move operations depending on short-term factors such as lease-rate competition among ports and global economic conditions.

Plastics production isn’t immune from its own cycles, but a ship designed to carry methanol doesn’t have a broad selection of facilities designed to produce the fuel on which to call.

Meanwhile, the regional economy and the state get jobs and tax revenue.

Better still, the methanol plant idea avoids some of the controversies of oil and coal.

No oil and coal trains to worry about — gas comes in by pipeline, goes out by ship. And it’s not “dirty” fossil fuels that are being exported but methanol that is supposed to supplant coal as the feedstock for Chinese chemical plants. The Tacoma plant has the backing of state government, which has been no friend to the idea of coal terminals and isn’t likely to be one for oil.

It’s a long way to the turning of dirt, much less the filling of ships, so there’s plenty that could go wrong. Any time you’re dealing with pipelines and chemical processing, there are significant environmental and safety issues to address. Any time you’re dealing with the sums of money being kicked around for these projects ($1.8 billion for each, if both phases are completed), financing and the nervousness of investors is always a concern. Maybe only one or two of the plants will be built. Maybe none will.

But if you were establishing a morning line on the chances of these various projects becoming a reality, right now you’d have to assign fairly short odds in their favor. The oil and coal facilities, on the other hand, are dragging on so long, with opposition building rather than dissipating, to the point they might fall off the board entirely.

• We know you have a busy day ahead of you, but we want you to pause for a moment and think about a number. A very big number: $248 million.

That happens to be the very big sum of money the state of Oregon spent trying to get a health care exchange website before giving up and deciding to use the federal system. When is considered a more attractive option than what you can offer to the public, you know you have achieved new depths of technology failure.

Even in government terms, $248 million is real and serious money. Consider how many schools might have been built (for comparison purposes, Tacoma School District’s website lists renovation projects that will result from a bond levy approved in February; the bulk of those are in the range of $30 million each). Or how many miles of highway might have been fixed. (Even the estimated cost of getting the tunnel-boring machine in Seattle moving again hasn’t reached $250 million. Yet.) For that matter, how many visits to the doctor might that have covered?

Washington has largely avoided a similar catastrophe (Oregon’s not the only state to have huge problems with implementing a health care exchange, just the one to create the most expensive debacle). The Washington Policy Center, no fan of Obamacare, notes that the state’s site has been functioning better than the one the feds set up.

But it also notes correctly the looming financial effect on the state’s health care system, as well as the increased costs families and businesses are facing. The sum total of fixing what this new system broke could amount to billions of dollars.

Billions of dollars represent even more serious money to government, yet it’s tough to personalize those amounts to taxpayers and citizens who never deal in such sums and often have no connection to how they’re spent.

The figure of $248 million, however, is just large enough to make an impression on them, but not so large as to seem unreal.

It’s also an easy-to-remember number, and it’s easy to remember what it was spent on. Those are the kind of recollections and connections a voter might well make when asked to cough up more money or vote for candidates who are asking taxpayers to do so.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at