A plan to build the world’s largest methanol plant in Tacoma may be on hold, but the same can’t be said for efforts to oppose it.
At the state Capitol, legislation to keep the proposed plant from qualifying for a sales-tax break will receive a public hearing Wednesday, and is expected to draw many critics of the project.
That’s even after the company behind the methanol plant asked the city of Tacoma to “pause” the project’s environmental review last week, citing “the vocal opposition that has emerged.”
State Rep. Laurie Jinkins, D-Tacoma, said she shares many of the concerns residents have expressed about the methanol plant at public hearings, including fears that it could increase air and water pollution.
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She said it’s important to continue with plans to eliminate a sales tax break for methanol production, because it’s not clear whether the company behind the project has decided to pull out of Tacoma for good.
“I want it examined whether or not this project is worthy of a tax benefit or tax exemption at all,” Jinkins said. “We haven’t had any dialogue about that.”
The proposed $3.4-billion plant would convert natural gas to methanol, which would be shipped to China to make plastics and other consumer goods. The company proposing to build the plant, Northwest Innovation Works, is mostly owned by the Chinese government.
I want it examined whether or not this project is worthy of a tax benefit or tax exemption at all. We haven’t had any dialogue about that.
State Rep. Laurie Jinkins, D-Tacoma, on proposal to build a $3.4-billion methanol plant on the Tacoma Tideflats
Northwest Innovation Works has also proposed building smaller methanol production facilities in Kalama and the Port of St. Helens in Clatskanie, Oregon.
Critics of the Tacoma project have said the methanol plant would use an inordinate amount of public water and electricity, while causing additional air pollution from burning natural gas. Some have also worried about the risk of an explosion.
Yet supporters of building the facility have cited 260 permanent jobs it would bring to Tacoma, as well as the promise that it would employ 1,000 workers during the peak of construction. Some, including Democratic Gov. Jay Inslee, have said the plant would help Chinese manufacturers transition from coal to cleaner-burning methanol, providing global environmental benefits.
Jinkins’ proposal, House Bill 2982, aims to ensure that a tax break on the sale of manufacturing machinery and equipment wouldn’t apply to companies that produce methanol from natural gas. The break allows companies to apply to exempt those purchases from state and local sales taxes, which add up to 9.5 percent in Tacoma.
State Rep. Jake Fey, a co-sponsor of the measure, said the Legislature never had methanol production in mind when it approved the tax break, which he said was geared toward helping Puget Sound Energy build a $250 million liquified natural gas plant at the Port of Tacoma.
Fey, D-Tacoma, said that project offered local benefits the methanol plant would not, such as helping ocean-going ships switch to cleaner-burning fuel and providing a new domestic source of natural gas.
“The circumstances of the methanol plant are quite different,” Fey said. “It doesn’t have the local air quality benefits and resource benefits.”
As written, Jinkins’ bill applies to methanol produced from compressed or liquid natural gas — types Northwest Innovation Works said its plant wouldn’t use. But Jinkins said she would amend the legislation if necessary to ensure it applies to the Tacoma project.
House Majority Leader Pat Sullivan, D-Covington, said he’d be willing to consider working the bill into a deal on the 2016 supplemental budget. He said the measure could be passed at any point during the Legislature’s current 60-day session, as tax-related bills aren’t subject to the earlier deadlines by which most bills must advance.
Lawmakers are scheduled to adjourn March 10.
“If you look at our history, usually tax exemptions — on either side — are dealt with at the very end of session,” Sullivan said. “This would be no different.”
Senate budget writer Andy Hill, R-Redmond, wasn’t available to comment on the proposal Monday.
Two other lawmakers filed a bill this month that would prevent construction of the methanol plant if it emits pollutants that would decrease local air quality, but that measure appears to be dead in the Legislature.
All it does is say, ‘gosh, we’re just taking away the tax exemption, now you have to pay more.’ It doesn’t stop it.
State Rep. Linda Kochmar, R-Federal Way, on bill intended to eliminate tax exemption for methanol production
One of those legislators, Rep. Linda Kochmar, said her preference would be to block construction of the plant entirely, not just take away a tax exemption from the company trying to build it.
She said she’s not sure Jinkins’ bill would do much to stop the methanol plant in the long term.
“I just don’t think China’s too concerned about the costs, so I don’t think it’s going to do much,” said Kochmar, R-Federal Way.
A spokeswoman for Northwest Innovation Works said the company doesn’t want to comment on Jinkins’ proposed legislation, or how it would affect the costs of the methanol project.
The company announced Friday that it planned to pause the environmental review of the project. In a news release, the company indicated it would like to “restart the process” at a later date.
According to a document provided by Ian Munce, the city’s principal planner, reactivating the proposal would likely trigger a new 45-day period to determine the scope of the environmental review. Comments already made about the proposal would be carried forward.
An environmental review is a precursor to the company receiving a permit to build the facility.
The city was in the middle of accepting public comments on what kinds of environmental impacts the review should consider when Northwest Innovation Works said it wished to halt the process.
I think they’re trying to get ahead of the opposition by taking a step back, and formulating plans to conduct a campaign to convince the public that it’s rainbows and unicorns.
Michael Lafreniere, spokesman for Save Tacoma Water, on company’s decision to pause environmental review of its proposed methanol plant
In a statement released Friday, company president Murray “Vee” Godley said the company wants to “use the next several months to engage the Tacoma community in further dialogue.”
“This will provide us an opportunity to share more details about our proposed project, discuss the environmental and safety procedures we are planning, and hear directly from the public about their concerns,” Godley said.
Michael Lafreniere, spokesman for the group Save Tacoma Water, said he and other opponents of the project interpret the company’s statement to mean the fight isn’t over.
Lafreniere said his group still plans to move forward with a citizen initiative that would require voter approval for water permits exceeding 1 million gallons of water a day. The proposed methanol plant would use 10.4 million gallons a day.
Lafreniere said Save Tacoma Water must gather 3,160 signatures to get the measure on the ballot in November.
“This announcement is not viewed as if it were any kind of second-guessing or diminished likelihood that the company intends to go forward,” Lafreniere said.
“I think they’re trying to get ahead of the opposition by taking a step back, and formulating plans to conduct a campaign to convince the public that it’s rainbows and unicorns.”