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6 coastal states back Washington in coal export terminal permit denial

Six coastal states filed a legal brief backing Washington Gov. Jay Inslee and his staff in a case regarding a coal export terminal.

Coal producer Lighthouse Resources Inc., through subsidiary Millennium Bulk Terminals-Longview LLC, has proposed to build a coal export terminal in Washington, allowing western coal producers better access to Asian coal demand centers. The state government denied a required water quality permit for the project and effectively halted its development, with Lighthouse subsequently suing and alleging the government's actions were preempted by federal law. Wyoming Gov. Mark Gordon continues to consider a separate lawsuit against the state for its permit denial, a spokesperson confirmed Jan. 8.

While there are four court cases related to the terminal in various stages of proceedings, the federal case was stayed until decisions are made in some of the lower courts. The terminal's developers have since appealed the case to the 9th U.S. Circuit Court of Appeals.

The six coastal states — California, Maryland, Massachusetts, New Jersey, New York and Oregon — filed a brief Jan. 6 in support of Inslee and his administration. The states wrote that the district court ruled correctly when it determined that Washington's permit denial was not preempted by the Interstate Commerce Commission Termination Act, or ICCTA, and asked the appellate court to affirm the lower court's determination.

The states claimed that if the court accepted the developers' "radical reformulation of historic police-power authority," it would hurt their ability to protect the health and safety of their citizens and environment. Washington's permit denial was within the scope of its police powers, they said.

"A holding that federal law preempts Washington from considering all potential environmental impacts resulting from a project subject to state environmental and public health-protection regulations, including those impacts related to the delivery of products by rail, would impair the ability of states to carry out their police-power responsibilities over a wide array of industries, such as manufacturing, energy, and agriculture," they wrote.

The states also argued that the ICCTA's preemption provision does not apply because Lighthouse is a rail customer rather than a rail carrier. BNSF Railway Co., which is acting as an intervenor for the developers in the case, would haul coal to the terminal. The states said Washington has not placed any conditions on the rail company.

"That BNSF may decide to alter its business operations based on whether or not Lighthouse is a future customer does not equate to regulation of BNSF's rail operations preempted by ICCTA," the group said. "Under appellants' logic, ICCTA would preempt state and local discretionary permitting authority over any project undertaken by a non-rail carrier entity that intends to have goods delivered to it by rail. It does not."

Lighthouse and Millennium did not respond to a request for comment by this article's publication. Gordon declined to comment on the states' brief.