Next Renewable Fuels Loses Legal Battle Over Railroad Tracks to Serve Diesel Refinery

Next said the tracks were a “branch line,” not a rail yard. Oregon regulators disagreed.

A group of Texans looking to build a giant renewable diesel refinery on the Columbia River near Clatskanie hit a roadblock today when Oregon regulators said they couldn’t build a sprawling rail facility to serve the plant.

The Oregon Land Use Board of Appeals said Columbia County officials erred when they granted a permit to lay 10 parallel tracks where Next Renewable Fuels could park rail cars full of refined diesel fuel and the raw material used to make it. Unlike petroleum diesel, renewable diesel is made from vegetable oil and other fats.

The decision turned on whether the tracks constituted a “yard” or a “branch line.” Next planned to build part of it on land zoned for agriculture, where a branch line would be permitted but a larger yard would not. Columbia Riverkeeper, 1000 Friends of Oregon, and local farmer Mike Seely argued Next’s rail facility was a yard, and LUBA agreed.

“We conclude that it is not a branch line because it includes multiple parallel tracks and includes siding tracks for train car storage and maintenance,” LUBA wrote in its decision.

Next says it plans to import raw materials and export diesel mostly on ships that would dock at Port Westward, a deep-water port on the Columbia near Clatskanie. It needs the rail yard in case access to the river is blocked, Next says.

“They are trying to put a very large rail yard on farmland, and LUBA saw through it,” says Dan Serres, conservation director for Columbia Riverkeeper. “It’s a major setback, and it throws the project into question.”

The proposed rail yard would stretch more than a mile from east to west, LUBA said, and all the parallel tracks together would have run 25,000 feet. Five of the tracks would have been on land near Port Westward that is zoned for industrial use, and another five would have been on agricultural land, the board said.

Michael Hinrichs, Next’s director of communications, said the refinery could still proceed.

“We still have the local permit for our facility, and this ruling doesn’t change our ability to construct and operate,” Hinrichs said in a statement. “LUBA took it upon itself to adopt a new interpretation of state and local law, reversing one of our local permits. The permit they reviewed accommodated a design request from the rail operator and local farmers. We listened to those comments and changed our design to reflect that feedback.”

Next is moving ahead on other permits, Hinrichs said. It still needs approval from the U.S. Army Corps of Engineers, which is in the midst of preparing an environmental impact statement on the refinery, expected next year.

Columbia Riverkeeper’s Serres said LUBA’s move complicates Next’s other permits, including one that it got from the Department of State Lands earlier this year. The DSL approval states that it is “conditioned on future local approval as described in the application’s land use compatibility statement.”

Next has said it plans to use rendered waste from fish-processing plants in the Northwest and Asia to make its diesel. Oregon law encourages the use of renewable diesel because it releases far fewer greenhouse gases than petroleum when it’s burned, though it does require the addition of hydrogen, which, in Next’s case, would come from natural gas.

Serres says he thinks Next planned to use the rail yard as more than just a backup for ship traffic, and he questions just how much diesel the company hopes to make from fish guts and used vegetable oil.

“You don’t build a 400-car rail yard for the fun of it,” Serres adds. “They know they need seed oil from the middle of the continent.”

LUBA said Next can try again by changing the design of the rail yard, or by seeking an exemption to state law aimed at preserving farmland.

“Either approach would require more than insignificant changes to the application, if not a new application,” LUBA said.