A New Blog from Communitywise Bellingham 

 It has been nearly five years since the Gateway Pacific Terminal proposal came to light, and Whatcom County residents are still waiting for clear details on what jobs the proposed project would actually deliver in Whatcom County. Other coal terminal proposals are much more clear and suggest far fewer jobs.

GPT Fact Check will shine a light on the project’s unchecked job claims. We will examine GPT developer SSA Marine’s and its advocacy organization the Alliance for Northwest Jobs & Exports’ PR and job promises, providing readers with the best data available for you to draw your own conclusions about the potential job benefits—or losses—for our community. Our goal is to support a reality-based conversation about the project.

Why is this necessary when GPT’s official environmental impact study is tackling a wide range of issues? Unfortunately, the EIS currently underway will not evaluate the project applicant’s job claims at all nor will it assess economic impact in any substantive way. It is prudent therefore to fact check, gut check, and ask the hard questions before green-lighting any project of this size and impact.

The truth is no one has looked at SSA Marine’s job claims for GPT. SSA Marine’s consultants were not hired to verify the job claims. No government agency has taken on the task.

When we began examining GPT’s job claims, we waded into the project’s (very limited and aggregated) documentation of new employment, read numerous expert reports, discussed the issues with involved economists and financial experts, and compared GPT’s numbers to other current coal terminal proposals.  At each turn, we found red flags.

For example, GPT’s numbers for direct jobs are notably higher than the proposed coal export facility Millennium Bulk Terminal in Longview, even when adjusting for export volume, potential non-coal commodities and local jobs compared to regional jobs.

GPT also claims a much higher local, economic “ripple effect” than Millennium does. GPT claims each direct job at the terminal would create or support nearly two additional jobs. Millennium’s claim is closer to one additional job created or supported.

The national financial firm PFM Group flagged this particular issue in its economic analysis of GPT released earlier this year. More recently, WWU economists Hart Hodges and James McCafferty explored this question in a Bellingham Herald piece. They noted that Martin and Associates, the firm SSA Marine contracted to assess GPT’s job numbers, “estimated the impacts of a multi-product bulk cargo export facility,” (our emphasis) because that was the business plan SSA Marine gave them.

But only 11 percent of GPT’s proposed 54 million metric tons of exports would be multi-product. The vast majority would be coal export, just like Millennium in Longview. As Hodges and McCafferty note, “the lower estimates [ripple effect] for the Longview facility are for a more highly automated, coal oriented business plan.”

Why then did SSA Marine ask their consultants to model 100 percent of GPT’s employment projections on a multi-product, bulk export terminal with a higher job ripple effect? Only 11 percent of GPT exports would potentially be multi-product.

For this and other reasons, GPT’s job claims simply do not add up. They make for good PR to rally support in Whatcom County, but they do not hold water under scrutiny.

If you want to learn more about the issues, pro or con, then read our upcoming blogs and evaluate for yourself how GPT’s claims stack up against the known facts.

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5 thoughts on “A New Blog from Communitywise Bellingham 

  1. SSA Marine paid for an economic analysis conducted by Martin Associates which was later “vetted” by three WWU affiliated economists [Jed Brewer, Hart Hodges, and David Nelson, who were also paid by SSA Marine for their vetting].

    According to Jed Brewer when he delivered their economic analysis report publicly at the Ferndale scoping hearing for GPT on Nov. 29, 2012, they concluded that the Martin Associates economic impact findings were “reasonable and well done.” And he said that “In some areas our estimates of the economic benefits were larger than Martin’s, and in some areas they were smaller. Overall they were qualitatively similar.”

    What Brewer failed to point out to the public and agencies in delivering his scoping comment, is that he and his associates had found that the induced and indirect temporary construction job number estimate to be 45.7% lower than Martin Associates’ original estimate for induced and indirect temporary construction jobs.

    A 45.7% difference in the estimates does not seem “reasonable.” People would only know that information from actually reading Brewers’, Nelson’s, and Hodges’ analysis.

    I called Brewer a number of years ago, and asked him if SSA Marine had asked him/his associates to deliver the summary of their review publicly, at the EIS scoping hearing as part of their economic review work for SSA Marine and he said yes that was correct. I also asked him why he stated that his (and his associates) job number estimate findings were reasonably the same as the job number estimates from Martin Assoc. when the indirect and induced numbers were 45.7% less than Martin’s. Brewer’s answer was that he thought people were more interested/concerned with the direct job numbers rather than indirect and induced.

  2. Looking forward to your research findings! It will be very helpful toward properly informing our community. To this day, due to what other research revealed early on, we are still correcting the misinformation that “the coal trains will go to Canada, with or without GPT.” Thanks so much for looking into this!!

  3. Shannon–I respect your right to oppose all things heavy industry and GPT, but as John Adams said, “Facts are stubborn things.” The first set of GPT jobs estimates were done by one of the world’s leading consultancies on port economics: Martin Associates of Philadelphia. This is a firm that is utilized by ports in WA and worldwide. Martin’s estimates were then vetted by highly respected regional economists who applied nationally accepted econometric models. The result is that the GPT jobs estimates per million tons of cargo (8) are conservative compared to that for Millenium (12), and Westshore Terminals in B.C. (9), according to research done by the Longview Daily News (3-3-11). The employment multiplier used for GPT happens to be very similar to that for the 11 existing industries at Cherry Point (3). I am aware that you have tried to argue for a lower multiplier by using selected data for marine transportation, but that includes things like low-paying tourism jobs which are in no way comparable to those of a working port. The jobs at GPT would be very high-paying, in the neighborhood of $75,000 plus per year. I am happy to review these data with you.

    With the demise of many good-paying jobs at Intalco, I hope that you will find a renewed appreciation for how important basic industry is to the working families of Whatcom County, not a constituency for which you have expressed much interest. One of the principal recommendations for economic growth from one of your prior studies was the “attraction of high wage new residents” and you may be onto something. According to the State Department of Commerce, Whatcom County is the least affordable rental housing market of all 39 WA counties (when looking at income in relation to cost), and one of the three least affordable counties for home ownership. This a good place for the well-to-do, but no so good for working families, especially if efforts to deindustrialize the local economy are successful. Every time one of those trains that you so dislike goes by a waterfront home, it is evidence of a working middle class–a middle class, according to Pew Research, that now constitutes a minority of Washingtonians. Always happy to chat about facts, opinions and solutions with you, but not just for the well-off.
    Warmest regards,
    Craig

    1. Thank you for providing the SSA Marine (SSA) perspective. Please note that further comments should comply with Communitywise Bellingham’s (CWB) comment policy that contains simple guidelines for productive civil discourse (such as identifying material relationships with proponent or opponent organizations and avoiding personal affronts).[1]

      In regards the several specific claims offered in your comments:

      1. The suggestion that SSA job numbers have been reviewed or verified is simply not accurate. Martin and Associates did not review either SSA’s stated direct job numbers or SSA’s stipulation of business model for their projections. Even though their report is short on details, it is a professional work with due clarity about “given” assumptions. They are clear that their projections are based upon the (un-reviewed) job numbers and business model provided to them by SSA. FRMC likewise did not review these foundational inputs – they were only contracted to look at the Martin report projections. The underlying stipulated assumptions, upon which all benefit projections are based, have never been independently analyzed.

      The suggestion that CWB is somehow questioning the professionalism of Martin and Associates or FRMC’s work is totally off mark. We are simply drawing attention to the fact that neither the input numbers nor the business model stipulated by SSA for the work has ever been reviewed. Outputs from complex economic projection are only as good as the inputs. Analyzing these inputs is reasonable and necessary as they are the foundation of the projections.

      CWB has noted the need for an independent third-party review of these assumptions since 2011. SSA, however, has declined to provide the supporting information for these assumptions, despite promises to do so.[2] CWB would welcome access to this information.

      2. We agree that comparing jobs per million metric tons of cargo is important. An upcoming CWB blog explores this measure, as well as the other important jobs parameters, in a comprehensive manner, exclusively using data cited from published studies such as those done for GPT and Millennium. The totally undocumented numbers you use for Millennium from an old Longview Daily News article are simply wrong. This is unsurprising given that the article was written well before any economic studies were published and that the Millennium numbers you use were totally discredited when leaked corporate memos showed the company was lying to regulators.

      3. Your jobs multiplier claim does not make sense. The Cherry Point study you cite found a range of very different multipliers, from 5.39 at the refineries to 1.71 at Coastal Industrial Services. Their average multiplier is as you suggest about 3, but no economist would agree that an abstract average of several disparate companies multipliers could somehow predict or verify what the multiplier of an unrelated business might be. The wide range of numbers demonstrates that the multiplier relates primarily to the particular business model, not their geographic location. A subsequent CWB blog will address the important question of appropriate job multipliers in a comprehensive fashion.

      4. We take exception to your false claim that “one of the principal recommendations for economic growth” from CWB studies is the “attraction of high wage new residents.” We understand this is your preferred characterization of what the independent professional studies say, but it is simply a total fabrication. The economic studies by PFM Group do not make any recommendations for economic growth, they identify potential economic risks associated with GPT.[3]

      5. We are sorry that you chose to include comments about CWB and staff in a dismissive and insulting style that distracts from substance and promotes polarization. Detailing a response to every specific affront would serve no useful purpose. It is important to note, however, that CWB is a community-based organization with a primary mission to “inform the conversation.” Our concerns include all working families in Whatcom County. It is disingenuous to suggest that our advocacy for transparency and rigorous analysis of economic impacts indicates a lack of concern for others. Nothing could be further from the truth.

      Notes:
      [1] Please find our comment policy here: http://www.gptfactcheck.com/?p=29

      [2] Earlier this year, PFM Group, the country’s leading financial advisors to state and city governments and contracted by Communitywise Bellingham, requested this information from SSA. Here the relevant part of the email from PFM to SSA:

      “Now that the EIS scoping process is complete, is it possible to set up a time to discuss and/or obtain the below referenced packet of information and the underlying assumptions that SSA provided for Martin’s modeling of the projected jobs and economic impact associated with GPT? Additionally, or alternatively, if you have the assumptions in a document or series of documents, we would be happy to review and then follow-up with a discussion if more efficient.”

      PFM received no response from SSA. PFM first requested information from SSA’s on its job assumptions in 2011. SSA’s email reply read: “Please note that due to the fact PFM’s study is outside the boundaries of the formal EIS process, it has been decided not to provide the packet of information previously discussed.”

      [3] The 2012 study, available on our website, notes on page 27: “GPT’s development and operation could have a risk of jeopardizing growth in tourism and in-migration of skilled workers and entrepreneurs because of the effect on the building brand of Whatcom County, Bellingham particularly.” The study cites Washington State data indicating in-migration of this population segment during recent periods of economic expansion in Whatcom County.

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