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Panel allows challenge to refinery ethanol shipments permit

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(AP) — A state panel reversed itself Monday and ruled that two civic groups can pursue a challenge to a permit allowing a Delaware oil refinery to ship unblended ethanol to other facilities along the East Coast.

Members of the Coastal Zone Industrial Control Board voted 4-3 to allow the Delaware Audubon Society and the League of Women Voters of Delaware to challenge a permit granted to the Delaware City Refinery in 2016.

The decision came after a Superior Court judge ruled more than a year ago that the board had erred in 2017 when it decided in a 5-1 ruling that the two groups lacked standing to challenge the permit. The board ruled that the groups had failed to show that their members would be affected by the project.

Opponents of the ethanol transhipments argued that the proposed operation amounted to a new bulk product transfer facility that would be prohibited under Delaware’s Coastal Zone Act. That landmark 1971 law restricts heavy industry in designated coastal areas.

“I thought they had standing from the first time I looked at it. I couldn’t imagine why they didn’t,” said former state senator Karen Peterson, who was appointed to the board last year and voted Monday with the majority.

Following Monday’s decision, the board will now schedule a hearing to consider the merits of the permit opponents’ arguments.

Michael Globetti, a spokesman for Delaware’s Department of Natural Resources and Environmental Control, said the agency would not be commenting on the ruling.

Ken Kristl is director of the Environmental and Natural Resources Law Clinic at Widener University Delaware Law School and is representing the groups challenging the permit. He said his clients were pleased that the board had reconsidered and changed its decision.

“We look forward to a hearing on the merits of our claim that the ethanol transshipment allowed under the permit violates the Coastal Zone Act,” Kristl wrote in an email.

Peterson said there was no new testimony or evidence presented at Monday’s meeting, only renewed discussion among board members. She also noted that there was nothing in the transcript from the board’s previous meeting explaining why the panel had decided that opponents had no standing to challenge the permit.

“There’s a transcript, but they went off the record for deliberations. That’s against the law,” said Peterson. Peterson was chief sponsor of a 2016 law stating that no part of a public hearing, including any “off the record” discussion, is exempt from a requirement that a record from which a verbatim transcript can be prepared must be kept at all public hearings.

The permit, issued by former DNREC Secretary David Small, allows the refinery to ship up to 10,000 barrels of ethanol daily. The operation involves taking delivery of ethanol, often by train, storing it at the refinery, then offloading it onto barges for shipment elsewhere.

The refinery previously was bringing in about 2,000 barrels of ethanol per day to be blended with gasoline.

In issuing the permit, state officials said the transhipment operation relied on existing dock facilities at the refinery and was a permissible expansion of the facility’s nonconforming uses under the Coastal Zone Act.

Citing concerns about air pollution, noise, impacts on recreational activities, and even the risk of an explosion, opponents filed a challenge with the Coastal Zone Industrial Control Board in January 2017.

After conducting a hearing and off-the-record deliberations, the board concluded that the injuries alleged by critics related to the pre-existing refinery operations, not activities authorized by the new permit. The board also declared that there was no evidence that the ethanol transhipments would result in increased rail and barge traffic.

In remanding the case the board in January 2018, Judge Diane Clarke Streett noted that the panel did not address the extension or expansion of nonconforming uses at the refinery in relation to the number of barrels of ethanol being shipped each day. The board also did not consider whether any increase in the number of barrels could increase the risk of an explosion, she said.

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