A U.S. District Court judge in Tacoma struck down Army Corps of Engineers permits for a proposed $2 billion methanol plant in Kalama, Cowlitz County, because they were not the result of a full review of greenhouse gas emissions and other environmental impacts, according to a ruling released Monday.

The loss of the two federal permits is the latest in a series of setbacks for the project first proposed in 2014 by NW Innovation Works to convert natural gas to methanol for shipment to China. The project also has so far failed to gain approval by the state Ecology Department.

The permits — required under the federal Clean Water Act — would authorize the discharges of dredged materials into the Columbia River for construction of part of an export facility. They were issued after a shorter review known as an environmental assessment rather than a more detailed environmental impact statement. And Judge Robert Bryan’s ruling found the Army Corps of Engineers acted in an arbitrary and capricious manner, and vacated the permits in a summary judgment sought by Columbia Riverkeeper, Sierra Club and three other plaintiffs.

Paulo Palugod, an Earthjustice attorney representing the plaintiffs, said “the Corps thought it could sneak by on a limited analysis of only a piece of the project. The court said no.”

The project also has yet to gain approval of a shoreline permit from the state Department of Ecology, which required an additional study of the impacts of the project’s greenhouse gas emissions. That study was released in September, and found the plant would be one of the 10 largest sources of greenhouse gas emissions in Washington.

NW Innovation officials have said they would find ways to offset the greenhouse emissions resulting from the methanol production. They have promoted the project as a big economic boost to Cowlitz County in southwest Washington. They also have asserted the plant as a net benefit to the climate. They plan to ship the methanol to Chinese plastic industry, which relies — in part — on coal as a feedstock in a process that generates much more carbon emissions than natural gas-based methanol.


“By reducing greenhouse gases globally and setting new standards for environmentally responsible industrial development locally, we are meaningfully confronting climate change while creating family wage jobs,” Simon Zhang, NW Innovation’s chief executive officer, said in a statement posted on the company’s website.

The supplemental study requested by the state Ecology Department offered a more complex view of the environmental impact of the project, which would produce 10,000 metric tons of methanol a day.

That study found that the Kalama methanol plant, which would be one of the largest in the world, would produce more emissions than previous estimates. And, while NW Innovation officials have said all the methanol would be used as feedstocks in the plastics industry, increasing the supply of this chemical would make it more likely some would be burned as fuel rather than supplanting coal in the plastics industry.

The study did find that the Kalama plant would generate lower greenhouse gas emissions than many competing sources of methanol. So global greenhouse gas emissions would rise if the plant was built — but likely less than they might if demand was met by other sources, according to an Ecology Department summary of the finding.

Environmentalists who filed the federal lawsuit say Washington state should not be making investments in major new fossil fuel-based projects as climate change intensifies.

“Washington simply cannot build a clean energy future by investing in dirty energy,” said Alyssa Macy, CEO of Washington Environmental Council and Washington Conservation Voters.