Time is money waiting for megaloads

Attorney cites $40M at hearing; intervenor status will be considered for opponents

By Elaine Williams of the Tribune

Saturday, November 20, 2010

ConocoPhillips might lose as much as $40 million if the Idaho Transportation Department doesn’t lift a stay on permits that would allow four megaloads of equipment bound for a Billings, Mont., refinery to cross the state.

That figure was presented Friday by Erik Stidham, an attorney for ConocoPhillips, during a proceeding in Boise that will help determine if three opponents of megaloads get to provide more information before ITD decides if it should remove the stay.

The hearing officer, Merlyn Clark, said he will make a recommendation to ITD before Thanksgiving about granting the three opponents, Borg Hendrickson, Linwood Laughy and Peter Grubb, intervenor status that would allow them to testify at a formal hearing.

ITD issued the permits with the stay after the Idaho Supreme Court ruled earlier this month it had no jurisdiction in the case. Grubb, Laughy and Hendrickson, represented by Advocates for the West, contend plans developed by ConocoPhillips and the state don’t adequately address concerns such as public safety, maintaining the pristine nature of the river corridor and protecting economic activity generated by tourism.

Clark encouraged the attorneys to restrict their comments to the four oversized loads sought by ConocoPhillips and not 207 unrelated megaloads ExxonMobil/Imperial Oil wants to ship on U.S. Highway 12 to the Kearl Oil Sands in Alberta, Canada.

“I don’t accept that if you open this door, all these others are coming in,” said Clark, a former Lewiston resident, who noted he had fished in the rivers that parallel the road.

ConocoPhillips continued to press for the process to be finished so it can avoid additional financial losses.

It has spent $2.5 million more than it budgeted because the litigation the opponents initiated has stranded the loads at the Port of Lewiston since August, said Steven Steach, who provided additional detail after the proceeding about what the $40 million included.

ConocoPhillips could be out anywhere from another $22 million to $33 million if the two drums, which have been split in half for the trip, don’t arrive at the refinery for a temporary rehabilitation shutdown at an undisclosed time in the spring, said Steach, manager of the refinery that employs more than 400 workers.

Those numbers include revenue ConocoPhillips would forgo if it had to have a second outage at the refinery to either replace the drums or refurbish the existing ones.

Plus ConocoPhillips estimates another $4.5 million of miscellaneous expenses for things like revised traffic plans if the delays continue, said Steach, who attended the Boise hearing with 55 employees and contractors of the Billings refinery. Many of the employees wore T-shirts that read “Safe reliable energy and jobs for the Rocky Mountain Region.”

The presence of the refinery’s staff was just one of the images that shaped the hearing. Stidham showed pictures of a lumber mill along U.S. 12 and photographs of other economic activity, including some about 400 yards from a resort that belongs to Grubb. “It’s not a landscape barren from commercial use,” said Stidham, who traveled the road last weekend.

The scenery along U.S. 12 is remarkable, but the federal designation it and 21,000 miles of highway in Idaho have received – partly for their beauty – carries no restrictions on commercial uses, Stidham said.

He also observed the property of two opponents, Laughy and Hendrickson, who live in a home along the road that is screened from the highway by vegetation such as tall trees.

Stidham questioned if four loads passing the property once would interrupt the sleep of Hendrickson, who stated she has a health condition that requires her to get a full night of sleep.

The residence of the married couple is one quarter of a mile from where ConocoPhillips plans to reconfigure the loads with more axles to go across the Maggie Creek bridge. The proximity of that activity to the residence of Laughy and Hendrickson is another point the two have raised in their litigation.

Aside from those issues, ConocoPhillips carefully studied the logistics of the proposed transport and found the Port of Lewiston was the closest port by thousands of miles, Stidham said.

The company addressed other potential problems in a 700-page plan it submitted to ITD and revised multiple times over three years, Stidham said. “It’s not nefarious and it’s not a conspiracy.”

In spite of all the work ConocoPhillips and ITD have put into the project, ITD never told the opponents what the process was to share their concerns, said Laird Lucas, an attorney for Advocates for the West.

His clients weren’t lying in the weeds waiting until the last minute to request to be intervenors as was described by a Supreme Court ruling in the case, Lucas said.

Instead they participated in every venue ITD provided and asked questions about the appropriate way to present their side, Lucas said.

At the same time, Lucas said he wonders about the amount of effort ConocoPhillips put into looking at the feasibility of getting the drums to the refinery in other ways. The only document ITD has provided with the rationale is three-fourths of a page in length and undated, Lucas said.

A similar size megaload recently took a route through the Midwest, Lucas noted.

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Williams may be contacted at [email protected] or (208) 848-2261.