BNSF Joins Lawsuit against Washington’s Illegal Block on Millennium

On Tuesday, BNSF Railway requested to join a federal lawsuit against Governor Jay Inslee and other state regulators over their arbitrary denial of key permits for the proposed Millennium Bulk Terminals project in Longview, according to The Daily News. BNSF seeks to join Lighthouse Resources Inc., Millennium’s parent company, in the lawsuit against Washington.

The Daily News reports that, along with Lighthouse, BNSF alleges that the Departments of Ecology and Natural Resources “misused their state regulatory authority to focus on a single commodity.” BNSF’s complaint contends that the departments’ numerous denials “show that state regulators intend to stop coal from being used halfway across the globe in Asia by building a ‘regulatory wall.’”

The BNSF filing adds to the growing discontent over Millennium’s unfair treatment in the Washington regulatory process. State agencies have withheld numerous approvals that Millennium needs to operate. The denials have for years delayed the boom in trade, jobs, and economic growth that Millennium is poised to bring to Washington.

Washington’s industry-specific discrimination against coal has disrupted the flow of interstate commerce. The move has irked nearby states which, citing the loss in economic revenue and potential violations of the U.S. Constitution’s commerce clause, are pushing back. In fact, legislators in Wyoming recently introduced a bill that would enable the state to sue Washington over its anti-business antics.

BNSF argues that Washington regulators also violated the ICC Termination Act by using supposed rail impacts to halt the project’s progress. “Permitting this facility should have followed the long-established process of making a determination based on site specific impacts, instead they have taken it upon themselves to deny permits based on so-called rail impacts,” said Roger Nober, BNSF’s executive vice president of Law and Corporate Affairs. “This is a very clear violation of federal law.”

Washington’s regulatory denials have impeded not only interstate commerce, but foreign commerce as well. BNSF’s complaint “shows the defendants have interfered with BNSF’s ability to engage in foreign commerce through the transport of coal to Millennium for export to Asian markets, in violation of the dormant foreign commerce clause.” The complaint also “contends that Washington state officials’ actions amount to an embargo on American coal exports, which is also a violation of the foreign commerce clause.”

KWC has weighed in extensively on the unfair approval process that Millennium faced, and what that means for future infrastructure projects. Last October, KWC released this review of the implications for the denial of the project’s water quality permit even though none of the factors cited in the denial affect water quality.

The state needs to thoroughly review its permitting procedures. The current process bodes poorly for Washington’s future as arbitrary denials grounded in commodity-based discrimination, illegal actions, and absurd regulatory delays typically fail to attract promising business opportunities. The Washington Western District Court is scheduled to consider the matter in an upcoming March 16 hearing.