Washington state judge denies Shell appeal on rail project review

Reuters News
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Posted: May 21, 2015 6:40 PM

By Kristen Hays

HOUSTON (Reuters) - A judge on Thursday denied Royal Dutch Shell's appeal of a ruling that a proposed oil-by-rail project at its Washington state refinery must undergo a full environmental review, just two weeks after a crude train derailment caused a fire in North Dakota.

Shell had appealed a February ruling from a Skagit County Office of Land Use Hearings examiner that the plan to move 70,000 barrels per day of inland crude to its 145,000 bpd Puget Sound refinery in Anacortes must be comprehensively reviewed.

In 2014, the county said the project did not need that much scrutiny to get a permit, prompting challenges from several environmental organizations.

On Thursday, a Skagit County Superior Court judge denied Shell's appeal, according to court officials.

The denial came two weeks after an eastbound crude train derailed in North Dakota, the latest in a spate of fiery mishaps since 2013 that have stoked fears about moving oil by rail.

Shell had sought to limit the review's scope to exclude railroad issues overseen solely by federal regulators, but said it remains committed to working with the county and other agencies to finish the permitting process.

Shell's refining competitors in Washington have been bringing in U.S. crudes by rail since 2012 to displace more expensive imports and declining Alaskan oil output. Shell was the last to seek oil-by-rail permits in late 2013, but by then opponents had taken notice of train crashes and safety concerns.

The rail issue is not Shell's only concern in the state. The company also faces opponents to its plan to use the port city of Seattle to ready rigs before they travel to the Chukchi Sea off the north coast of Alaska.

(Reporting By Kristen Hays. Editing by Andre Grenon)