Sunday, December 11, 2016

Port of Olympia, Rainbow Ceramics, and Cows


Above: The Port of Olympia was seeing an increase in rainbows and revenue at its marine terminal in 2014. The port saw its busiest years in 2013-14 with its contract with Rainbow Ceramics, signed in 2012. According to Port of Olympia executive director Ed Galligan, 15 longshore workers were assigned to the port to assist with the cargo of ceramic proppants, adding more than 30,000 hours in each of those years. The industry has declined ever since. 

By Janine Gates
Little Hollywood

The Port of Olympia contract with Rainbow Ceramics expires July 14, 2019, and for many, it can’t come soon enough.

There is a scheduled discussion and vote on acceptable cargo at the Port of Olympia’s regular Monday night meeting of its commissioners on December 12, 5:30 p.m., at 626 Columbia Street NW, Suite 1-B. 

Staff has drafted a decision needed resolution that explains the parameters around the port's imports and exports. 

The resolution centers around the Federal Shipping Act of 1984 that states that terminal operators cannot unreasonably discriminate in the provision of terminal services.” 

The resolution also makes several statements regarding the port's expectations for law enforcement agencies with jurisdiction to promptly take appropriate action in the event protest activities violate local, state and/or federal laws.

The agenda is available at http://www.portolympia.com/ArchiveCenter/ViewFile/Item/2853

The conversation about the port's cargo at its marine terminal has been going on for years, from its long-term contract with the Weyerhaeuser Co., to an eclectic mix of cars, wind blades, garnet, military equipment, corn and cows. 

The previous commission's acceptance in 2012 of a five year contract with Rainbow Ceramics to accept ceramic proppants has particularly attracted the attention of many community members not previously involved with port issues. 

According to port documents, an early September review of the Rainbow Ceramics contract states that the Port of Olympia has received $6,568,102 in revenue from Rainbow Ceramics since 2012.

Expenses related to the acceptance of the cargo totaled $3,893,547 from 2012 through September 2016, for a profit of $2,674,555.

Jeff Smith, port financial officer, said that the expenses involved with the import of ceramic proppants include longshore labor to discharge cargo or load it onto rail or truck to send out, line labor to tie up or loosen ship from dock, discharge and load out machinery, and mandatory security from the U.S. Coast Guard and Department of Homeland Security when there is a vessel in berth.

Vessel counts for 2012 was four, 2013 was 10, 2014 was 11, and in 2015, just one.

It is undetermined how many more proppant shipments the port anticipates.

“The number of ships that Rainbow brings in is predicated on the market. We do not have a forecast,” said the port stated in an emailed response to a request for information.


Above: Union Pacific Train 404 leaves Olympia loaded with 15 cars of ceramic proppants, escorted by the Washington State Patrol and Thurston County Sheriff's Deparmtent, in the early morning hours of November 18.

Union Pacific Train 404, which left the Port of Olympia loaded with 15 cars of ceramic proppants in the early morning hours of Friday, November 18, came back into port on Tuesday, November 22, just before noon.

The train whistle has blown several more times since that date, possibly indicating more shipments, however, requests for information by Little Hollywood to the Port of Olympia to learn if shipments since November 18 have taken place have not been answered.

Keith Bausch, former president of the Local 47, International Longshore and Warehouse Union (ILWU), attended Commissioner Zita's community chat last week.

“If I understand correctly from longshore leader Keith Bausch, 13 rail cars of proppants moved out in the recent operation, with 64 bags of proppants per car, approximately 1.5 tons per bag,” said Commissioner Zita to Little Hollywood this weekend.

“If I understand correctly from port finance director Jeff Smith, the Port grosses about $10 per ton of proppants, and nets about $1 per ton after direct expenses. So, 13 cars x 64 bags x 1.5 tons per bag X $1 per ton would net the Port under $2,000, if my calculations are correct.

“When fracking proppant cargos peaked in 2014-2015, the marine terminal was still in the red….What are other costs of doing this business? Greenhouse gas emissions from transport of proppants, fracking operations, and transport and burning of harvested fossil fuels….Environmental, social, and cultural costs of fracking, pipelines, and fossil fuel transport, e.g. Standing Rock….Potential injury and distress to concerned citizens, workers, and/or law enforcement….Polarization of communities such as Olympia.

“We need open, civil discussions to weigh costs and benefits of this fracking business. Public servants have an obligation to share relevant information with the public, to facilitate open, civil discussions, and to weigh costs and benefits in decision making,” said Zita.

Bausch also told her that corn was loaded and ready to go by rail to its destination.  

“I am generally not informed about port movements of cargo, despite repeated requests to the executive director,” said Zita.

There is ample evidence to refute the Port’s assertion that it just accepts whatever cargo comes its way.

An article, “Port Cargo Concerns Community,” by Hildi Flores was published in the South Sound Green Pages’ Spring 2013 issue, and explores the same questions and concerns raised by community members now.

In the article, Flores describes how the Port actively solicited the contract of Rainbow Ceramics by sending its port business development manager, Jim Knight, to North Dakota. According to Knight, the cargo was a good fit for the port’s break-bulk facilities.

In keeping with the conversation in 2013, meeting minutes for the April 22 port meeting indicate that former port commissioner Jeff Davis asked that if the port should decide against shipping proppants through the port, what would the next step be to halt fracking in the Midwest? 

Davis, a longshore worker, said it might be beneficial to commissioners to learn what that might entail because the port has deferred shipment of other materials only to have them shipped from another port. 

As for studies related to climate change and the industry's use of proppants, employing fracking to extract oil, and the impacts of the use of petroleum products, the port does not have any such studies in conjunction with or related to contracting with Rainbow Ceramics. 

“Industry-wide impacts would constitute Scope 3 emissions from a carbon accounting standpoint. Department of Ecology’s greenhouse gas (GHG) accounting methodology that is used for those entities with emissions large enough to mandate reporting, excluded Scope 2 and Scope 3 emissions. Scope 2 emissions are excluded due to the high risk for double counting that would result from their inclusion. Scope 3 emissions are excluded due to their being outside of the jurisdiction of the reporting entity. Scope 3 emissions are those outside of the Port's capacity and capability to directly affect,” wrote Galligan in an email to Commissioner Zita in September.


Cameron Powell, operations and service manager for Rainbow Ceramics in Houston, coordinates logistics from Rainbow Ceramics' manufacturing plants in China to Canada and U.S. ports, which are the Port of Houston Authority, San Antonio, and Olympia. 

Her job is to “research new projects to capitalize on various shale plays such as the Bakken, Eagle Ford, and Permian Basin, analyze inventory and reports of incoming and outgoing ceramic proppant, and manage rail cars going to and from transloading facilities in North America.”

Per Powell’s request, rather than speaking on the phone, Little Hollywood offered a written list of about 15 questions on December 1 pertaining to its business and contract with the Port of Olympia. Those questions have yet to be answered.

As for alternatives to ceramic proppants and other controversial cargo, community member Greg Schundler was one of the speakers at a recent port meeting who encouraged the Port to use data to drive its goals toward a more sustainable existence.


Oh, and those cows?

In November 2015, the Port of Olympia was proud to announce their involvement in the movement of 1,400 head of dairy cattle to Vietnam.

According to the port’s press release at the time, Vietnam launched a campaign geared toward minimizing childhood malnourishment through a strategy of providing one glass of milk per child per day. The dairy cows came from Idaho and Washington farms, and following a required holding period, were then loaded onto a ship.

Through a public records request, Little Hollywood found out that the port showed net revenue of approximately $25,000 for the shipment.

Based on economic viability, its ongoing conflicts with the City of Olympia, and stress on local, regional and state law enforcement agencies, the Port of Olympia marine terminal may be looking at some hard choices in its future.


Above: Bags of ceramic proppants are still at the Port of Olympia, as seen in November. Commissioner Zita was told at her informal community chat that there were about 20 rail cars of proppants still at the port with no set date for shipment.  

Editor’s Comment/Full Disclosure: The South Sound Green Pages was a print and online publication of the South Puget Environmental Education Clearinghouse (SPEECH). Janine Gates, then Janine Unsoeld, was president of the organization and editor of the publication at the time. The article by Hildi Flores is at http://oly-wa.us/GreenPages/Article.php?id=2013;05;201305e

For more pictures and information about the rail blockade of the Union Pacific train in downtown Olympia in November, the Port of Olympia, Rainbow Ceramics, ceramic proppants, and the City of Olympia, go to Little Hollywood, http://janineslittlehollywood.blogspot.com, and type key words into the search button.