ANACORTES, Wash. – Shell’s Puget Sound Refinery is suspending permitting of its planned crude-by-rail project. The current global crude oil market and the tight capital environment make this project non-economic at this time.
“When we look at current crude oil supplies, prices and markets globally, and the cost of the project, it just doesn’t make economic sense to move forward at this time,” said Shirley Yap, the refinery’s general manager. “We are committed to investing in this facility and there will be other ways to do that.”
The refinery receives its crude oil now via tankers that unload at its dock, and via a pipeline that serves Canadian oil fields. Shell had sought the rail project so that it could tap new supplies of crude oil in the Midwest that are not served by pipelines. However, low oil prices and abundant production elsewhere have slowed production in the Midwest and made other sources of crude more viable.
“We are confident with current crudes now available that we can continue supplying the refinery,” Yap said. “The Puget Sound Refinery will continue to produce the fuels that power life in the Pacific Northwest.”
A draft Environmental Impact Statement was released by Skagit County and the Washington Department of Ecology on October 4th laying out proposed conditions for building the project. Shell supports the environmental review process and our preliminary assessment of the proposed conditions is that they would be achievable and feasible, and it remains confident that the project could be built and operated in a way that protects our employees, our community and the environment.
“We would like to thank Skagit County and the Department of Ecology for their diligence and professionalism in this EIS process. We also want to thank the Corps of Engineers and other agencies for their work on other permits, as well as our project team who worked so diligently to design a safe and modern rail facility to co-exist with the natural environment we all cherish.” Yap said. “Of course, thank you also to our partners in the community whose feedback made this a better project as we went through the process.”
The Puget Sound Refinery produces roughly 25 percent of Pacific Northwest’s fuel. It is among the largest employers in Skagit County, with more than 700 employees and contractors. It is also the county’s largest taxpayer.