Panel OKs power plant at refinery
Generator will do double duty
John Stark, The Bellingham Herald
September 25, 2004
The 720-megawatt BP Cherry Point Cogeneration Project got a unanimous endorsement Friday from the Washington State Energy Facility Site Evaluation Council, sending the project to the desk of Gov. Gary Locke for final approval.
Assuming that the project clears that final step in 3 1/2 years of regulatory scrutiny, the two-year construction project could begin in the first half of 2005, company officials said.
COGENERATION POWER PLANT
What: Natural gas-fired electric-power plant
Where: BP Cherry Point Refinery
Maximum output: 720 megawatts, enough power for more than 700,000 average homes.
Jobs: 30 permanent positions, temporary jobs peaking at 706 during two-year construction; two-year construction payroll estimated at $30 million.
Tax impact: $4 million in one-time sales tax revenue to Whatcom County; annual property tax of $1.6 million to Blaine school district, $720,000 to Whatcom County.
Sources: BP; Whatcom County Assessor's Office
COMMENT: The business logic that underlies a project like this, in the face of evidence that North American natural gas production has peaked, must be underpinned by articles of faith that the empirical evidence can't be true and/or that other sources of supply, such as LNG, will come into play in time.
Note that at least one proposal for an LNG terminal at Cherry Point is being floated.
Although GSX tried to enjoin the BP project as a supporter of the GSX-US pipeline, the EFSEC approval is based on the understanding that the gas for the BP Cherry Point Co-generation facility will all come from an existing pipeline.
"The sole fuel source for the facility will be natural gas, except for diesel oil used in the emergency generator and the firewater pumps. The Project will be supplied by a connection to the existing 16- inch Ferndale pipeline that runs from the U.S.-Canada border near Sumas, Washington, to the BP Refinery." (link)
"It's a big relief," said Mike Torpey, BP's environmental manager for the project.
Steve Koch, president of the Northwest Washington Building and Construction Trades Council, was also pleased. He said he expected the construction of the generating plant to provide some good jobs for some of the 6,000 union members he represents.
BP has estimated peak construction employment on the project at 700, with a total construction payroll of about $30 million. Permanent employment at the generating plant will be about 30.
Site council members praised the project.
Council Chairman Jim Luce said it was consistent with the state policy goal of meeting the growing demand for electric power while causing minimal environmental impact. The BP project is more efficient than a stand-alone power plant because the fuel burned will do double duty, generating power while providing steam for refinery operations, Luce said.
Council member Tony Ifie, representing the state Department of Natural Resources, said he had studied the air-quality data provided by the company and was convinced that the plant would not hurt air quality in the region. Using the generator to provide steam for the refinery will result in the shutdown of older, dirtier steam boilers and result in the reduction of some emissions, Ifie said.
Hedia Adelsman, the council member representing the state Department of Ecology, said the project would eliminate about 30 acres of wetlands, but the company would compensate for that loss by restoring another 110 acres of wetlands.
Whatcom County Council member Dan McShane, also a site council member, said construction traffic will be significant in the area, but would be comparable to what nearby residents already experience when Cherry Point refineries are doing major maintenance work. He said the company has agreed to shoulder the cost of road improvements to help handle the traffic impact.
Reach John Stark at 715-2274 or john.stark@bellinghamherald.com.
Posted by Arthur Caldicott on 25 Sep 2004