Port of Kalama Comprehensive Plan

Port of Kalama Comprehensive Plan 

June 1, 2015 

 

Page 32 

In Puget Sound, crude oil accounts for most of the liquid bulk cargo, including receipts of 

domestic oil from Alaska and foreign oil from overseas sources.  However, there has been a 

recent shift from waterborne receipts to receipts of crude oil by rail.  All refineries in Puget 

Sound have or plan to build facilities to receive crude by rail.

2

  In addition to crude oil, refined 

products are both shipped and received by Puget Sound ports in large volumes.  Most of the 

remaining liquid bulk tonnage is comprised of chemicals and animal fats, which move in 

significantly smaller volumes than petroleum products. 

At Kalama, Emerald Kalama Chemical imports toluene over its wharf for use in the 

adjacent chemical plant.  Other ports on the Columbia River handle a variety of liquid bulk 

cargoes, including chemical and petroleum products.  On the Washington Coast, the Port of 

Grays Harbor handles ethanol and methanol, among other products. 

Trends & Forecast 

Pacific Northwest international liquid bulk export/import volumes have grown steadily, 

from 3.5 million in 2000 to 11.5 million metric tons in 2014.  This growth is mainly attributed to 

a dramatic increase in exports of petroleum products via Puget Sound ports (primarily to 

Canada, Mexico, Singapore, Chile and Peru).  Exports of petroleum products jumped from 

323,000 metric tons in 2000 to 6.5 million tons in 2014.  (See Figure 16) 

Crude oil imports to refineries in Puget Sound increased around 2 million metric tons in 

2000 to 5.2 million metric tons in 2012.  This shift occurred primarily due to a decline in crude 

oil from Alaska.

3

  However, increased receipts by rail from North Dakota rose quickly in 2013 

and 2014, which caused crude oil imports to decline to 2.7 million metric tons in 2014. 

Most of the growth has occurred at Puget Sound ports, whose market share increased from 

around 89 percent between 2007 and 2012 to 94 percent or more from 2012 to 2014.  Market 

shares of ports on the Oregon side of the Lower Columbia River decreased from approximately 

6 percent between 2007 and 2012 to 2 percent or more from 2012 to 2014.  Market shares of ports 

on the Washington side of the Lower Columbia River also decreased, from approximately 

5 percent between 2007 and 2012 to 3 percent or more from 2012 to 2014.  The market share of 

the Washington Coast was less than 1 percent from 2012 to 2014.  

                                                 

2

  Source:  EIA, Washington State Energy Profile: Washington Quick Facts, last updated March 27, 2014. 

3

  Domestic receipts are not included in the chart because the available data only goes through 2012. 

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Port of Kalama Comprehensive Plan 

June 1, 2015 

 

Page 33 

Figure 16 – Pacific Northwest International Liquid Bulk Cargo Trends (1,000 Metric Tons) 

 

Note:  excludes domestic shipments and receipts 

Source:  WISERTrade 

There are a number of projects currently in the planning or permitting stages that could 

substantially increase the volume of liquid bulk shipments.  These include: 



 

Crude oil rail-to-vessel transfer facilities in Portland, Vancouver (WA), and Grays 

Harbor,  



 

Methanol production and export facilities at Kalama and Port Westward in the 

Columbia River, and at Tacoma on Puget Sound, and 



 

LPG export facilities (butane and propane) at Ferndale (existing facilities) and a new 

terminal is being considered in Portland.   

In addition, LNG terminal proposals are still in process for sites in Coos Bay (on the Oregon 

Coast) and Warrenton (at the mouth of the Columbia River).   

These projects are currently in the planning stage.  There may also be other products that 

have not been actively sought, including inbound (imports or domestic receipts) and outbound 

(exports or domestic shipments).   

Methanol 

The Port of Kalama is working with a new tenant to secure permits for the construction of a 

methanol production plant on the Port’s North Port property, adjacent to Steelscape.  This 

tenant, Northwest Innovation Works, is currently working on plans 

and permitting for three such plants in the Pacific Northwest, 

including one in Tacoma and another at the Port Westward property 

owned by the Port of Saint Helens in Oregon.  Each of the proposed 

facilities would convert natural gas to methanol for export. 

Global demand for methanol is currently approximately 66 

million metric tons per year, and is projected to grow at two to three 

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Metric To

ns 

(1,000

s)

Col Riv OR

Col Riv WA

Puget Sound

Washington Coast

Northwest Innovation 

Works plans a $1.8 

billion methanol 

production and export 

facility at the North Port 

of Kalama. 

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Port of Kalama Comprehensive Plan 

June 1, 2015 

 

Page 34 

times the rate of global GDP

4

.  According to the International Monetary Fund (IMF) growth in 

global GDP is projected to average 3.9 percent per year between 2014 and 2019.  The increasing 

demand for methanol is being driven by China, where methanol is used as a feedstock for the 

production of ethylene and other chemicals.  The market potential for U.S. production of 

methanol may be as high as 19 million metric tons, according to estimates from Goldman Sachs.  

The proximity of Pacific Northwest ports to China and low prices of U.S. natural gas are key 

factors in plans for methanol production in the region. 

Initial plans for the Kalama project estimate that construction would be completed in two 

phases lasting three years each.  The first phase would be complete by 2018, with construction 

of the second phase to begin immediately after.  During multi-year construction, each phase 

will employ up to 1,000 workers.  After construction, there are expected to be 120 full-time jobs 

created at each facility phase. These will be family-wage jobs, with workers recruited and 

trained from the local workforce.  The Kalama plant is expected to have a construction cost of 

$1.8 billion; with a current assessed value of $8.9 billion, this project will increase the tax base of 

Cowlitz County by more than 20 percent. 

The Kalama plant will convert natural gas into methanol, a liquid that evaporates easily, 

completely dissolves in water and that has been manufactured in the U.S. for decades.  Because 

the methanol produced in Kalama using natural gas as a feedstock would replace coal-based 

methanol, it would effect a global net reduction in greenhouse gas emissions. 

If the current project proves successful, Kalama would be in a strong position for expansion 

or additional methanol projects. 

Container Terminals 

Overview 

The Columbia River is a relatively small player in the regional container market.  Seattle 

and Tacoma are the dominant container ports in the U.S. Pacific Northwest, while Vancouver, 

B.C. is also a major competitor. 

Most of the container trade on the Lower Columbia River moves through Portland, 

although small volumes also moves through Vancouver (Washington) and Longview.  Portland 

serves as a regional center for exports of agricultural products, forest products, and other 

commodities.  The Portland container market region consists primarily of Oregon, southern 

Idaho, and the barge-served areas of southeast Washington and northern Idaho.  Shippers in 

this market area have the option of using ports on the Columbia River or on Puget Sound.  

Portland’s share of the local market depends on a number of factors, including frequency of 

service provided by ocean carriers, relative inland transport costs, and the number of foreign 

destinations served, among other factors. 

                                                 

4

  Source:  Goldman Sachs, Unlocking the economic potential of North America’s energy resources, June 2014. 

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