OPINION: WASHINGTON STATE REGULATORY PROCESSES PUT ECONOMY AT RISK
Kris Johnson, president of the Association of Washington Business and Jay Timmons, president and CEO of the National Association of Manufacturers, recently wrote a piece weighing in on how unprecedented regulatory requirements are slowing an economic recovery that has yet to reach all corners of Washington state.
The piece, “Opinion: Washington state regulatory processes put economy at risk,” originally ran in the Puget Sound Business Journal:
There’s a lot of noise these days about what’s holding the American economy back — and keeping salaries flat and job growth anemic. While one answer won’t suffice, the simple fact is the United States, and workers in Washington specifically, are losing out to foreign competition. A main driver of our losses is the way we handle regulations, in both Washington state and Washington, D.C.
The National Association of Manufacturers calculates that federal regulations alone cost small companies — those with fewer than 50 employees—almost $12,000 per employee each year. For manufacturers of the same size, that cost increases to almost $35,000. Reasonable regulatory costs are a part of doing business, but when those costs become excessive they can lead to hiring freezes, growth stagnation and even businesses closing their doors.
Our country, and the people of Washington state, deserve so much better. Take, for instance, the ongoing delay in permitting the Millennium Bulk export terminal, one of three major projects facing severe regulatory challenges along with proposed Gateway Pacific Project in Whatcom County and Vancouver Energy project in Clark County.
Millennium is a win-win project that cleans up a contaminated site along the Columbia River and constructs a critical infrastructure project to access foreign markets. The recent release of the state Department of Ecology’s draft environmental impact statement for the proposed export terminal in Longview is an example of good regulations gone wrong.
The requirement to review and mitigate the local environmental impacts of major economic expansion projects like Millennium is both longstanding and rigorous. When it is applied fairly it is a challenging yet reasonable requirement for governments and developers. It can help ensure that economic growth takes place in an environmentally sustainable manner, while not adding unreasonable delays. Held to this standard, the Department of Ecology concluded in its draft EIS that the Millennium project will meet Washington’s strict environmental standards.
Unfortunately, the state now holds this project and all others like it responsible not only for the local environmental impacts of its facility, but also the impacts associated with the production, transport and consumption of the goods passing through the export terminal.
For Millennium, this means it will be on the hook for half of all of the greenhouse gas emissions generated by foreign governments and businesses who consume coal exported from the Washington-based terminal. This is such an odd, unprecedented set of requirements that the federal government would not even join with the Department of Ecology in conducting the review.
It also sets a very dangerous precedent for businesses seeking to export their products from Washington. What will this mean for future infrastructure projects? Will the next project have to account for how cars are driven in foreign markets? The impact of different types livestock feed on agricultural emissions? The energy consumption and related emissions from foreigners plugging in their U.S.-made electronics?
There is a reason the scope of the Washington state EIS process — and similar processes in other states and at the national level — is intended to be limited. Projects like Millennium simply cannot reasonably account for the environmental impacts along the entire supply chain of the goods passing through their terminals. And if they are forced to do so by government order, it could mean these projects and economic investments never advance beyond the permitting stage.
This is a critical time for Washington’s economy. It is booming in the central Puget Sound region, but we are seeing signs of slowing elsewhere. Unemployment is creeping back up in places, and the uneven recovery has yet to reach some corners of the state.
Gov. Jay Inslee and his administration should be encouraging job growth, especially the kind of good-paying jobs that the Millennium project will bring, rather than putting up roadblocks.
Hardworking Washingtonians have shown it’s possible to protect the environment and create economic opportunity at the same time. It’s time Gov. Inslee — and all our leaders — stepped forward to do the same and fix our regulatory process so that Washington and America can put points on the board and win in this global economy again for generations to come.