Inner BG

Calloway: Cherry Point plan is risky for Whatcom County and our region

This week, Lance Calloway, Northern District Manager, with the Associated General Contractors of Washington, authored the below commentary in AGC of Washington’s newsletter:

Cherry Point plan is risky for Whatcom County and our region  

Nothing is more important to the overall well being of a community than access to economic opportunity. For Whatcom County, there is perhaps no more crucial engine for that opportunity than Cherry Point and the businesses that call it home. This now more important than ever as we recover from the COVID 19 crisis.

The recent announcement that the Intalco Aluminum Smelter is closing costing 700 jobs is a harsh reminder we need a regulatory environment that helps large industrial employers compete but also that we need to work with our elected officials to create a regulatory environment that sends a strong message encouraging innovative forward thinking industrial employers to Whatcom County and the region.

We need to work closely with our elected leaders to create a regulatory scheme that has the proper protections for the public, workers and environment but also actively encourages existing businesses to thrive and attracts future employers to industrially zoned areas like Cherry Point.

More than 10,000 people look to Cherry Point businesses to support their families with good-paying jobs and benefits. The companies based in the industrial zone pay $200 million in taxes each year – vital funds that keep our most important public services functioning. And employees and organizations alike give back to the region via thousands of hours of voluntarism and more than $1 million in philanthropic giving.

As we address damage done to our economy by the COVID 19 crisis we must work together across the political and ideological spectrum – to help our economy evolve to a future embracing green industries. We cannot, however, afford to lose sight of the role that’s played by the companies currently located at Cherry Point. They play a critical role restoring the family wage jobs that have been lost due to the pandemic.

Whatcom County has a significant number of contractors and other companies who directly and indirectly depend on the Cherry Point businesses to be able to provide their employees their livelihood. For example, the contractors work keeps the refineries at Cherry Point running safely while also continually improving and reducing emissions impacting our environment. There are approximately 700-750 construction workers who call the Cherry Point refineries their permanent office, as they have long term maintenance contracts enabling them to earn a great living wage.  During the major maintenance turnarounds there can be as many as an additional 3000-3500 construction workers who work two to three months on major projects, with a substantial percentage living in Whatcom County.

Unfortunately, for the last four years prior to COVID 19 the Whatcom County Council has attempted to push through a new onerous regulatory framework for Cherry Point. These changes had questionable value to the public, workers and the environment prior to the pandemic and make even less sense in a the post COVID 19 economy. These changes if enacted would likely cost us jobs, tax revenue, and investment in all sectors – including renewable energy. The Whatcom County Planning Commission in it review has also pointed out many flaws that would harm the refineries at Cherry Point.

Also right before COVID 19 crisis a renewable diesel project in Whatcom County was abruptly cancelled, and one has to wonder what – if any effect – the uncertain regulatory environment at both the state and local levels had on the decision to cancel the project. The cancellation of the nearly ONE-BILLION dollar project eliminated the opportunity for an estimated 650-700 construction workers to build an environmentally friendly project over a period of two years. In talking with a local contractor, this cancellation cost them and two other contractors nearly $500 Million.

Again, if we had concerns about the proposed changes to Cherry Point regulations before now those concerns are magnified many times over.

It’s clear that the new plan would devastate refineries. The added review requirements would make it next to impossible for these facilities to invest in modernization or expansion, making it more difficult for these otherwise state-of-the-art facilities to keep pace with competition outside our area.

Also, from an environmental standpoint, since renewable energy companies at Cherry Point will also have to reckon with the same impediments to investment that traditional refiners will. On the whole, this misguided regulatory move will increase emissions rather than improving the environment.

The impacts of this proposal reach beyond the energy sector, and beyond Cherry Point at large. In considering these changes, Whatcom County officials are sending a clear and unwelcoming message to any and all companies that might otherwise look to invest in Whatcom or Washington state generally. Growing a business requires a measure of policy certainty and stability. The Whatcom County Council’s proposed changes for Cherry Point undermines that stability by making it harder to invest and expand.

Whatcom County is very fortunate to have Cherry Point to attract the family wage jobs we have recently lost. If this Whatcom County Councils continues with its proposal, the foundations of our regional economy are at risk. It is this uncertainty that concerns our business community as investors will look outside of Whatcom County to build the next production facility or plant bringing with it a trickle down impact on housing and other local businesses and schools depending on Cherry Point.

We are dealing with too much economic uncertainty we cannot control; we must increase certainty where we can. A positive regulatory scheme so businesses can thrive in our new normal is a great place to start.

Lance Calloway
Northern District Manager
Associated General Contractors of Washington