SEATTLE — Washington Gov. Jay Inslee on Monday rejected a permit for a massive oil-by-rail terminal proposed along the Columbia River, saying the risks and impacts outweighed the need for and potential benefits of the project.

Inslee said he agreed with the recommendation of a state energy panel, which unanimously voted in November to recommend that the Vancouver Energy project in southwest Washington be denied.

The joint venture of Tesoro Corp. and Savage Companies proposed to receive about 360,000 barrels of North American crude oil a day by trains at the port of Vancouver. Oil would temporarily be stored on site and then loaded onto tankers and ships bound for West Coast refineries.

BACKGROUND

The decision represents a victory for environmental and local groups, tribes and cities that opposed the project, saying it posed too great a risk to communities and the environment.

Inslee told the state Energy Facility Site Evaluation Council in a letter Monday that he found "ample support in the record" for the panel's decision.

The governor, who is a Democrat, highlighted several issues that led him to his decision, including seismic risks at the site, the potential for an oil spill and the risk that a fire or explosion at the facility would harm workers and the community.

"The Council has thoroughly examined these and other issues and determined that it is not possible to adequately mitigate the risks, or eliminate or minimize the adverse impacts of the facility, to an acceptable level," Inslee wrote.

The state energy panel concluded in its report that developers didn't meet the burden to show that the project proposed at the port of Vancouver site would produce a net benefit in balancing the need for energy and the impact to the public.

Vancouver Energy issued the following statement Tuesday.

We are disappointed that Governor Inslee chose to deny the Vancouver Energy project. With this decision, the Governor is rejecting much-needed family-wage jobs and over $2 billion in economic value for Southwest Washington. The decision also forgoes the opportunity to bolster America’s energy security by providing state-of-the-art infrastructure that enables environmental benefits and a cleaner energy future.

The endorsement of the Energy Facility Site Evaluation Council’s faulty recommendation by Governor Inslee is setting an impossible standard for permitting new energy facilities in the state. After over four years of study and tens of millions of dollars, the Vancouver Energy facility and associated state-of-the-art facilities would have been far superior and more robust with regard to the potential for an earthquake or oil spill, than the crude oil trains that are already moving through the state every day and virtually all existing infrastructure in Washington.

The Final Environmental Impact Statement confirmed that construction and normal operation of the Vancouver Energy terminal would have no significant unavoidable impacts that cannot be mitigated. Rejecting essential infrastructure on the basis of risks the evaluation council found to be extremely unlikely, and which are inherent to transportation occurring across the country today, is no way to govern.

This decision sends a clear anti-development message from state leadership that will have far-reaching negative impacts for industries across Washington State.

At this time, we are evaluating our options for next steps.

Developers have said the terminal is needed to bring crude oil from North Dakota and other areas to a western U.S. port to meet growing fuel demands and future energy needs. They've argued that it could be built safely and would secure a reliable supply of energy for the state.

Project developers have 30 days to appeal the governor's decision in Thurston County Superior Court.

"It's a real victory for the community of Vancouver and the people of Washington," Michael Lang, conservation director with Friends of the Columbia Gorge, said Monday. "It shows that when projects are proposed that pose a significant threat to health and public safety that we can say 'no'."

An environmental study released last year found that the project poses a potential risk of oil spills, train accidents and longer emergency response times due to road traffic.

Many of the risks could be decreased with certain mitigation measures, but the study outlined four areas where it said the impacts are significant and cannot be avoided. It identified those risks as train accidents, emergency response delays, negative impacts on low-income communities and the possibility that an earthquake would damage the facility's dock and cause an oil spill.