06 February 2013 by Published in: Opinion No comments yet

Good News for the Local Economy

Editorial Comments

by Deborah Steele Hazen

Finally, last week we got two pieces of good news about the local economy.

The first, as announced in last week’s Chief, is the pending sale of the Columbia Pacific Bio-Refinery, the ethanol plant at the Port Westward Industrial Park near Clatskanie, and its related assets to Global Partners LP, a Fortune 500® company.

This week, we are delighted to report that Portland General Electric (PGE) will be building the long-awaited Port Westward Unit 2 generating plant, also as the name implies, next to its current generating plant at the Port of St. Helens-owned industrial site near Clatskanie.

When the sale of Columbia Pacific Bio-Refinery is completed, we are hopeful that the new owners – leaders nationally in the refined petroleum products and renewable fuels industry – will be able to not only keep the present workforce permanently employed, but perhaps expand it.

It is noteworthy that among the assets that Global Partners LP is acquiring, in addition to the ethanol plant, are the two storage tanks that Cascade Grain Products (the original developers of the ethanol plant) purchased from PGE, and the right to ship commodities, including petroleum products, from the Port of St. Helens-owned dock.

That 1200-foot dock was originally built in 1942 for the Beaver Army Ammunition Depot or Beaver Ammunition Storage Point (it was known by both  names). From it was shipped thousands of tons of ammunition which helped win World War II. It served a similar purpose during the Korean War.

The U.S. government appropriated the approximately 900 acres for the Beaver Ammunition Depot on short notice from local farmers in February of 1942 – two months after the attack on Pearl Harbor.

It was no accident that this spot was chosen. It is a naturally scouring deep draft port on the Lower Columbia River, a short distance away from what was then the SP&S rail line, and what is now the Portland & Western short line that connects with the major BNSF rail network.

In 1942, the government confiscated 100-foot rights-of-way over more farmers’ lands in order to build the rail spur through the “Base,” as it was known locally, to bring the ammunition in, temporarily store it, and transload it onto ships at the dock. Part of those tracks have been rebuilt in recent years to serve the ethanol plant, and other potential industries at Port Westward.

The plans of Global Partners LP to continue and probably expand the rail-to-ship transloading of “light sweet crude” oil, that was begun by the Columbia Pacific Bio-Refinery’s current owners Cascade Kelly Holdings in November, is a natural and appropriate use of the facility.

In the early days of PGE’s Beaver generating plant, the tank farm was used to store the oil, brought into the Port Westward dock by trucks and ships, to fuel the electric generating plant before it was converted to natural gas or diesel.

So the transloading of petroleum products, among other commodities, at Port Westward is nothing new.

The site is ideal for these kind of rail-to-ship or barge transloading operations. That is why Ambre Energy and Kinder-Morgan are interested in it for coal exportation.

That is why the time is right to make improvements to the rail line.

Good News for Local Taxing Districts

The announcement that the flexible generating plant – which PGE needs to back-up wind power – will be built at Port Westward is great news.

PGE has been a good corporate citizen of Columbia County for many years.

While the new plant will not significantly expand PGE’s existing workforce for its Beaver and Port Westward I plants, it will employ  up to 200 construction workers beginning this year. The plant is expected to be up and running in 2015.

What is particularly positive about the new PGE plant is that – upon completion – it will bring an immediate boost to the revenues of local taxing districts, all of which are struggling as property values have declined during the current recession, while costs have continued to rise.

Under the state’s strategic investment program (SIP), negotiated by local officials led by Columbia County Commission Chair Tony Hyde when the new PGE project was still on the drawing board, PGE will receive a partial property tax break, but will make significant payments to the county and to local taxing districts over a period of 15 years, including the Columbia 4-H and Extension Service District, Columbia 9-1-1 Communications District, Columbia Vector Control District, Port of St. Helens, Columbia Soil and Water Conservation District, Clatskanie Park and Recreation District, Clatskanie Library District, Rainier Cemetery District, Clatskanie Rural Fire Protection District, and the Clatskanie School District.

Because of the state school funding formula, school districts do not normally benefit from SIP agreements, but knowing the funding problems faced by the local schools, the county leaders and representatives of the other taxing districts agreed to lower their share of the payments in order to give a share – in fact, the largest share – to the Clatskanie School District through the Clatskanie Foundation.

The SIP payment schedule is immensely complicated and depends on the exact valuation of the new PGE plant. We will be reporting more details on this in the future.

Suffice it to say that the payments will be helpful to all of the taxing districts mentioned above, and particularly significant to those with the largest tax rates – the county, the Clatskanie fire district, and the Clatskanie School District.

Good news, indeed!

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