Plans for a more than $2 billion Southwest Washington methanol plant are “effectively ended,” according to a Friday statement from Port of Kalama officials, as Northwest Innovation Works — denied a permit by the state this year — will terminate its site lease.

The project, years in the planning, suffered a big setback in January when the state Department of Ecology rejected a request for a shoreline permit required to build the plant, which would have been one of the Pacific Northwest’s largest users of natural gas.

Northwest Innovation officials, in a statement Friday, said in the aftermath of that permit denial, Washington’s “regulatory environment has become unclear and unpredictable.”

That statement said the company is assessing “an appropriate path forward,” and is developing other projects, including one to produce hydrogen. The statement did not include information about possible sites for new projects.

The methanol project was first proposed in 2014, and generated intense controversy with strong backing among many in Southwest Washington for the jobs it would create and strong opposition from environmental groups who cited the carbon emissions from the natural gas that would be used at plant.

Developers, from early on, said the project would help reduce global greenhouse gases by displacing coal-based methanol that is created in China in a process that produces far more carbon emissions per gallon of product.


The developers said the methanol would largely be used as a feedstock in China’s plastics industry.

In 2015, the project appeared to have the support of Gov. Jay Inslee, who called the proposed methanol plant “one of the most innovative clean-energy projects in the nation.”

A state study released in December found the project would have a “high likelihood” of helping slow the rise in global greenhouse gases.

But in interviews last year, state officials cast doubt on those findings, saying they were based on an analysis of future markets that were difficult to predict. And Laura Watson, director of the state Ecology Department, cited greenhouse gas emissions from the plant as a reason for rejecting the permit.

“I want to be very clear that a project that would increase greenhouse gas emissions by nearly 5 million [metric] tons annually would not benefit the environment … ,” Watson said when the decision by the state was announced. “At most, this project would be less harmful than potential alternatives.”

Port of Kalama officials reacted bitterly Friday to the cancellation of the lease for a project that had been expected to create 1,400 construction jobs and 200 permanent jobs. They also took a swipe at Inslee, who made climate change a center stage issue in his failed bid for the presidency in 2020.


In May 2019, Inslee pulled his support, saying he was no longer convinced the project would accomplish what was necessary to reduce greenhouse gas emissions.

That announcement came the day he signed a bill prohibiting the use of fracking to produce natural gas or oil in Washington state. Inslee said then that his opposition was not intended to influence the regulatory review of the methanol project.

Inslee’s switch angered Kalama port officials.

“This was the kind of innovative, job-creating project that originally was supported by the governor’s office. Jay Inslee stood on Kalama’s waterfront to tout the climate benefits of the project, then turned on us when he ran for president,” said port Director Mark Wilson.

“Unfortunately, this is part of a larger pattern of the unwillingness to listen to differing opinions and find common-sense, balanced solutions,” said Randy Sweet, Kalama Port Commission president.

An Inslee spokesperson, Mike Faulk, said Friday that it was not politics that changed the governor’s stance on the methanol project, and that in 2019 he provided substantive reasons for taking a new position.

Port officials also are concerned about the broader implications for economic development in the state’s rejection of the permit through the course of seven years in a process that shifted constantly. They said the project would have been a big revenue lift for schools, police and other services in their area.


State Senate Republican leader John Braun, R-Centralia, also commented on the lease cancellation, saying in a statement that Northwest Innovation Works had a solid plan to build a project in a part of the state that had not seen the economic boom that the Puget Sound area has experienced.

Faulk noted that the Ecology Department — not Inslee — made the decision to reject the permit.

“Washington state has one of the most robust economies in the nation and that will continue to be the case, with more jobs coming to urban and rural communities across industries,” Faulk said. “This project originally looked promising, but as the governor’s office weighed all aspects it clearly would have had negative consequences for Washingtonians’ quality of life.”

For environmentalists, the lease termination marked the end of a long fight to block the plant as part of a broader campaign to stop the construction of major new fossil fuel-based projects in the Northwest.

On Friday, the executive director of Columbia Riverkeeper, Brett VandenHeuvel, said he was inspired by the activists from around the state, including in Kalama, who spoke out against the project.

“This has been a long fight, and I think we have turned the corner in Washington. After many years of coal and oil and fracked gas infrastructure proposals, we are looking forward to a clean energy future in Washington,” VandenHeuvel said.