September 2, 2020 Sandy Robson

Back in 2010, Jeffrey McClure, who is currently an incumbent candidate for commissioner for Whatcom County Public Utility District No. 1, signed onto a June 15, 2010, letter to then-Department of Natural Resources Public Lands Commissioner Peter Goldmark, urging him to remove what the letter described as “inherent conflicts” in the Washington State Department of Natural Resources’ draft of its Cherry Point Environmental Aquatic Reserve Management Plan. 

The aquatic reserve plan, aimed at protecting the health and aquatic environment of Cherry Point, is a 90-year plan that was put into place in 2000 by the Washington State Department of Natural Resources (DNR).

Goldmark was one of the decision-makers on the then-proposed Gateway Pacific Terminal (GPT) project, as its project applicant, Pacific International Terminals, a subsidiary of SSA Marine, would need to obtain an aquatic lease from DNR. GPT was planned as a deep water terminal that would store, handle, and export up to 54 million metric tons per year of dry bulk commodities, of which, approximately 48 million metric tons were expected to be coal. Officially proposed in 2011, GPT would be located at Xwe’chi’eXen (Cherry Point) in Whatcom County, Washington, along the Salish Sea shoreline. 

The June 15, 2010, letter that PUD Commissioner McClure and six other public officials signed onto was orchestrated by SSA Marine/PIT’s local consultant on the GPT project, Craig Cole, and it appealed to DNR’s Goldmark to change the language in the draft Cherry Point aquatic reserve plan, saying that the letter signers were concerned the plan “would deny an opportunity to permit” PIT’s GPT project. The suggested changes to the language in the draft Cherry Point Environmental Aquatic Reserve Management Plan would pave a significantly clearer path for the GPT project.

Recently, PUD Commissioner McClure’s participation in that 2010 advocacy letter was brought up by his opponent, Christine Grant, during the Bellingham City Club’s September 23, 2020, candidate forum for the Whatcom Public Utility District No. 1 commissioner position. When he signed onto the letter in 2010, McClure was serving as a commissioner for PUD No.1, as he has been on the commission since 2008.

During the Bellingham City Club’s candidate forum, Commissioner McClure made the following statement which I have transcribed below from a video recording of the event:

“I’m glad this subject has been exposed to the light of day because I’ve been hearing this from several supporters of my opponent. I wrote a letter in support of a multi commodity terminal when the port when the terminal was first proposed to this community it was proposed as one that would be used for agriculture to ship products to Asian markets. I was not the only elected official that wrote a letter of support. Several months after that, the total landscape shifted and the developers of the port took up partnership with Peabody Coal and, uh, and many of us felt the rug had been pulled out of it. So, I in no way used my position to support a coal terminal and I’d like the record to reflect that.”

Some history relating to Commissioner McClure and the GPT project 

The historical information presented below provides important details which illustrate the problem with Commissioner McClure’s statement he made during the recent September 23rd PUD candidate forum about his actions relating to that 2010 letter he signed onto. 

Once it became more widely known by Whatcom Countians in 2011 that GPT would be used primarily for shipping/exporting coal for the first 10 years of its operation, Commissioner McClure never publicly opposed the project, nor did he apologize for his having signed the letter asking DNR to change the language in the draft Cherry Point Aquatic Reserve Plan which would result in paving a clearer path for the GPT project.

News broke with a February 28, 2011, press release issued by Peabody Energy announcing an agreement with SSA Marine (parent company of PIT) to initially export up to 24 million metric tons per year of Peabody coal through GPT once the terminal would be built and operational.  

Also, on February 28, 2011, PIT had submitted its Project Information Document to Whatcom County. On June 10, 2011, PIT submitted a Shoreline Substantial Development Permit application and a Major Development Permit application to the County, but the County determined those to be incomplete on June 23, 2011, so PIT withdrew those and resubmitted revised permit applications on March 12, 2012.

In the Project Information Document it was stated that PIT anticipated that in the first ten years of operation of the GPT, it would likely manage and ship coal, Canadian potash, and calcined petroleum coke. 

Around June of 2011, the public became increasingly aware that coal would be the main commodity handled, stored and shipped by the Gateway Pacific Terminal. Back at that time in June, Dan Pike, who was mayor of Bellingham, came out publicly in opposition to the GPT project once it became known how big a role that coal would have in the terminal’s operations. PUD Commissioner McClure did not. The GPT project continued to be aggressively pursued by project proponents over the next six years.

In February of 2013, Cloud Peak Energy, one of the largest coal producers in the U.S., secured a throughput option agreement with SSA Marine/PIT that provided Cloud Peak with an option to ship up to 17.6 million short tons of capacity per year through the proposed GPT. 

PUD Commissioner McClure voted to approve PIT’s Water Supply Agreement in March 2013

At a March 26, 2013, Whatcom County PUD No. 1 (“the District”) commission meeting, Commissioner McClure voted “yes” on a motion (which he had seconded) to approve an Industrial Water Supply Agreement Renewal, and authorize the District’s general manager to sign a Water Supply Agreement between then-coal terminal applicant PIT and the District for a contract demand capacity of up to 5.33 million gallons of Nooksack River water per day, through December 31, 2042, and after that date, it would continue on a year-to-year basis unless terminated by either party. Much of the public was unaware of that water supply agreement. 

At that time, in March of 2013, there was already an Industrial Water Purchase Agreement in existence that had been established in 1970 between Chevron and the Whatcom County PUD No. 1 (“the District”). That agreement was later assigned to the new owners of the property that Chevron had owned and to which the Water Purchase Agreement was to supply water. Pacific International Terminals (PIT) was the new owner. The Industrial Water Purchase Agreement between the District and PIT was set to expire in 2015, and had a clause in the agreement to automatically continue on a year-to-year basis unless terminated by either party. This was during a period when the proposed GPT was still going through its environmental review phase. 

According to the March 26, 2013, meeting minutes for the Whatcom County PUD No. 1 commission, the District had received a request from PIT to consider an Agreement for water supply to the PIT property with the updated District Agreement format, extending the Agreement to 2042. This was what Commissioner McClure voted to approve. 

Meanwhile, the PUD No. 1 commissioners could have just let the original Water Supply Agreement its agency had with PIT expire, and allow the year-to-year continuation clause to kick-in, especially while waiting for the environmental review to go through its process. Approving the Water Supply Agreement benefited PIT, while not necessarily benefitting Whatcom County community members.

Water Supply Agreement between PUD No. 1 and PIT is still in effect through 2042 

In 2018, I checked with Whatcom County PUD No. 1 requesting information, via a September 18, 2018, public records request, on the status of the Industrial Water Supply Agreement between the District and Pacific International Terminals to see whether it was still in effect due to PIT’s having cancelled its plans for a coal terminal. The District staff person handling my public records request informed me via a September 19, 2018, email that the Agreement was still in effect/in place, saying:

“The status of the PUD/Pacific International Terminal’s Agreement for Industrial Water Purchase is currently in effect, the contract expires December 31, 2042. Under the Terms of the Agreement on page 4,  …’it shall continue in force on a year to year basis following 2042, unless and until terminated by either Party upon twelve (12) months prior written notice or in accordance with the termination provisions provided below’ [in the agreement].”

McClure’s 2014 election year campaign benefitted from advertising from coal terminal interest-funded PAC

Also worth noting, is the fact that during Jeffrey McClure’s 2014 campaign for re-election as a commissioner for PUD No. 1, he received the benefit of $4,685 in Independent Expenditure advertising from the Whatcom First PAC, an affiliated PAC with the SAVEWhatcom PAC, according to Washington state’s Public Disclosure Commission (PDC) filing records. 

PDC filing records show that coal terminal applicant Pacific International Terminals (PIT) had contributed $10,000 to the SAVEWhatcom PAC for the 2014 Whatcom County election, and the SAVEWhatcom PAC then funneled that $10,000 to its affiliated PAC, Whatcom First PAC. 

The SAVEWhatcom and Whatcom First affiliated PACs were created the year before Commissioner McClure’s 2014 election race, in 2013, as continuing PACs. The PACs were funded in 2013 primarily by $149,000 coming from coal terminal interests such as then-coal terminal applicant PIT, Global Coal Sales, Cloud Peak Energy, and some others. The affiliated PACs were created in an effort to elect the four conservative county council candidates running at that time who were thought most likely to approve the permit needed for the GPT project since the permit would ultimately require the County Council’s approval. 

The rest of that $10,000 contribution from PIT to the SAVEWhatcom PAC that was funneled to its affiliated PAC, Whatcom First, went to Independent Expenditure advertising which benefitted conservative candidates running at that time in 2014 for the Whatcom County Charter Review Commission in an effort to ensure that the 2014 election would result in a conservative and likely pro-GPT majority elected to serve on the Charter Review Commission. The Charter Review Commission had an important role to play in PIT’s coal terminal scheme. 

In that 2014 election, PUD No. 1 candidate Jeffrey McClure’s campaign chose “mini reporting” on its C1 Candidate Registration form, which stipulates that a candidate would raise and spend no more than $5,000. By mini-reporting, candidates then do not have to disclose the contributors and dollar amounts for their campaign funding to the public.

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Recap of Commissioner McClure’s actions which aided GPT

In 2010, PUD Commissioner McClure signed onto a letter to DNR’s then-Commissioner Goldmark, asking for changes that would facilitate a permitting path for GPT. Despite it becoming widely known the following year that GPT would not be used for shipping agricultural products for many years and would, instead, primarily be shipping coal, unlike Mayor Pike, Commissioner McClure did not announce his public opposition to the project. Instead, two years later he voted to hand over up to 5.33 million gallons of coveted Nooksack River water, daily, to GPT applicant, Pacific International Terminals. 

This September, Commissioner McClure asserted in his statement made at the Bellingham City Club that when Peabody Coal became a partner in the proposed GPT (in February 2011) that he “felt the rug had been pulled out” of the project. However, over the six years following Peabody’s announcement that it would initially export up to 24 million metric tons of coal per year through GPT, countless other Whatcom County community members would expend incalculable hours, energy, and expertise, while Lummi Nation would additionally risk their tribal treaty rights, in order to outwit, outplay, and outlast the efforts of GPT project proponents to place a 48 million ton coal export terminal adjacent to an aquatic reserve, at Xwe’chi’eXen (Cherry Point). 

The Lummi Nation and its treaty rights were never mentioned in that 2010 letter Commissioner McClure signed onto that was sent to DNR’s Peter Goldmark.