A state study has found a “high likelihood” that a $2 billion natural gas-based methanol plant proposed for Kalama could slow the rise in global greenhouse gas emissions produced by the global industry.

Whether these savings were real — or just part of the sales pitch of the developer — has been a key question hanging over the Cowlitz County project, which was proposed in 2014 and immediately generated fierce opposition from environmentalists as an unwanted expansion of the region’s use of fossil fuels.

The plant is proposed by NW Innovation Works, a joint venture formed by Beijing-based CAS Holdings, and would produce methanol for use in China’s plastics industry.

The $486,636 study was based on the work of three contractors. It found the greenhouse gas savings, largely from displacing much more carbon-intensive methanol production from coal in China, could equal 5.9 million metric tons of carbon emissions. That savings, if realized, would roughly equal emissions from more than 1.28 million gasoline-fueled vehicles, according to an estimate of average vehicle carbon dioxide emissions by the U.S. Environmental Protection Agency.

The release this week of the study — a supplemental environmental impact statement — sets the stage for a decision by the Ecology Department, expected in January, on whether to approve a shoreline permit required for the project to move forward.

The high-profile project was once embraced by Gov. Jay Inslee as an industrial development that might be able to reduce global emissions. Then, in May 2019, on a day he signed a bill banning fracking in Washington, he withdrew his support. In a written statement, he said, “I cannot in good conscience” support the methanol plant or a liquefied natural gas project proposed for Tacoma, both of which he said would not accomplish what is necessary to reduce climate change.


Inslee added this would not change the state’s regulatory process that involves a “rigorous and objective” review.

Executives with Kalama-based NW Innovation Works, say the study’s finding on greenhouse gas emissions buttresses their claims of the plant helping to combat climate change resulting from the atmospheric build-up of greenhouse gases.

“Based on the analysis, there are profound benefits in going forward with this project,” said Kent Caputo, chief commercial officer for NW Innovation Works.

Behind the study

The study was released by the Ecology Department, and the three contractors performed different parts of the analysis. The work “informs our thinking and conclusions” but the final document was produced by department staff, who made changes through the drafting process and also made contributions, according to Jeff Zenk, an Ecology Department spokesperson.

Most, if not all, of the changes in the document’s third section, where the greenhouse gas emissions potential savings are analyzed, were communicated to the contractor that helped develop that section, according to Zenk.

The changes include several paragraphs — added between a September draft and the final December document — that cast more doubt on the potential global greenhouse savings.


That section cites the “inherent uncertainty” in how markets will behave and the inability to forecast future policies, such as a phase-out of plastic. This means the ‘ analysis noting potential greenhouse gas savings does not alter an Ecology Department determination that the project’s emissions are significant, according to this new section.

A determination of significant environmental impact could be used to help justify extensive requirements for the company to offset greenhouse gas emissions resulting from the methanol plant or a permit denial.

In an interview this week, Ecology Department officials noted the impacts include in-state greenhouse gas emissions that would be the equivalent of nearly 1 million metric tons of carbon dioxide. Those can be calculated with certainty and would rank the plant among the top 10 largest sources of these emissions in Washington.

They also spoke with caution about the report’s finding of a “high likelihood” of the project slowing the rate of greenhouse gas emissions from the methanol industry. They said it was based on a market analysis that is very difficult to do.

” … It has a high level of uncertainty because you’re trying to predict what’s going to happen 10, 15, 20 years down the road,” said Stu Clark, an Ecology Department special assistant.

Opponents and proponents

Developers are trying to move ahead with the project at a time of growing concerns about the toll that plastics play in polluting the oceans and amid a push by Northwest environmental groups to curb major new investments in fossil-fuel-based industry.


In the United States and elsewhere, environmental groups are hoping for major actions to reduce plastic production. There also is a push to develop plastic-type materials that will biodegrade rather than create long-lived pollution that poses a threat to fish and wildlife.

Environmental groups have led the battle to block construction of the Kalama methanol plant, which has gone through an initial state-level environmental impact study and two additional reviews.

At the federal level, environmental groups also have gone to court to oppose the project, and NW Innovation Works suffered a setback this fall as a federal judge knocked down two permits because they were not the result of a full Army Corps of Engineers review of greenhouse gas emissions and other environmental impacts..

“The one thing that we know for sure is that this will emit a massive amount of greenhouse gases and that is the exact opposite direction that Washington is trying to go,” said Brett VandenHeuvel, executive director of Columbia Riverkeeper, an environmental group with a mission of protecting and restoring the Columbia River that has taken a lead role in the legal challenges.

Plant proponents say that even if the plastics industry dramatically contracts, this project should still be built because it would pollute less than other operators elsewhere in the world producing feedstocks for the plastics industry.

In the Pacific Northwest, the proposed plant would rank as the largest industrial user of natural gas, and also would require 100 megawatts of power from the regional electric grid network.


The plant, which would create 200 permanent jobs and 1,000 in construction, has some strong support in Cowlitz County. The plant would be sited on 100 acres at the Port of Kalama, which released a statement this week that the project “would tangibly demonstrate our state’s global leadership in addressing climate change.”

The new study released by the Ecology Department is a supplement to two earlier studies, and was charged with taking a deeper dive into the proposed plant’s impact on global carbon emissions.

The study found the plant’s emissions would not only be well below coal-based methanol but also slightly less than that of alternative pathways to making plastics that involve naphtha or ethane produced in the oil refining process. An earlier report by the Stockholm Environment Institute came to a different conclusion —that naphtha or ethane plastic production generates fewer carbon emissions than using natural gas-based methanol to make plastics.

The prospect of slowing the rise of global carbon emissions initially helped the developers draw the backing of Inslee, who helped lay the groundwork for the plant during a 2013 trade mission in China.

Inslee’s favorable view of the project drew criticism from environmentalists, who welcomed his 2019 decision to withdraw support.

Zenk, the Ecology Department spokesperson, said the governor has been kept informed about the decision permit process but he and his staff have not lobbied on the issue or been involved with any deliberations.