Millennium Bulk Terminals is still fighting for its proposed Longview coal project, even though the legal odds are heavily stacked against it.

So the company was in court again Tuesday, appearing before the state Court of Appeals to challenge the state’s denial of a shorelines permit for the $680 million project.

But the State Department of Ecology added a new argument for judges to consider: It doesn’t matter if Millennium gets the shorelines permit because the company can’t build its terminal without a state aquatic lands sublease. Last month the state Supreme Court ruled that the state legally denied the company that sublease, which it needs to build a dock in the Columbia River at the old Reynolds Metals Co. aluminum plant.

“The point here is that there is no effective relief that petitioners can get through this appeal,” so the case should be deemed moot (irrelevant or no longer worth debating), said Sonia Wolfman, Ecology’s lead attorney.

Ecology presented that point to the three-judge panel Tuesday during a special “community visit” hearing in Vancouver. (The Appeals Court usually meets in Tacoma.) There is no date for when the justices will make a ruling in the case.

Millennium and its parent company, Lighthouse Resources Inc., want to build the largest coal export dock on the U.S. West Coast to ship coal to Asia. Upon completion, the two-stage project would be capable of handling about 48 million tons of coal each year. (Stage one allow for handling of about 28 million tons of coal annually).

Millennium attorney Timothy Hobbs argued that the company could still complete stage one under a current aquatic lands lease, which allows for up to three 220-foot docks and gives leaseholders authority to improve those structures. Millennium currently has one dock. During stage one, the company would build a second dock, berthing facilities and rail tracks, according to court documents.

Wolfman said the Jan. 8 state Supreme Court ruling outlined how those structures would violate the terms of the current lease. For example, the coal terminal docks would be about 75% larger than allowed under the lease, Wolfman said.

With the sublease case decided, the project is, in effect, dead, Wolfman said.

Appeals judges will also consider previous arguments from Millennium that the Shoreline Hearings Board’s denial of the permit ignores rules set forth by state law, regulations and court decisions.

“This is a case about rules. MBT Longview set out to comply with the rules in seeking a shorelines permit for this project, but the rules were changed just for this project,” Hobbs said.

Millennium is arguing that:

— The state Shoreline Hearings Board and Hearing Examiner considered an environmental impact statement for the project “irrefutable” and did not weigh opposing or supplementary information presented by the company and other project supporters

— The board based its denial on the environmental impacts of the full build out of Millennium’s two-phase project, when the company is asking for permits for stage one only — and has plans to adequately mitigate the impacts.

— The case was moved to summary judgment before Millennium had the chance to argue against almost half of the issues of the case.

Ecology’s attorneys contend that the company had a chance to challenge the EIS but never did. The EIS’ findings were sufficient basis for denying the permit, attorneys wrote in their brief.

According to the EIS, the project would result in increased cancer risk to local residents, a high level of noise impacts to residential areas, an increase in rail and vessel accidents, traffic congestion and impacts to tribal fishing resources and access to tribal fishing sites. The Hearing Examiner determined those “significant, adverse impacts” were unavoidable, even with potential mitigation to eliminate or minimize them, according to court documents.

Ecology also says Millennium is trying to “piecemeal” the project by focusing on just the stage one environmental impacts, and piecemealing is prohibited under state law.

Millennium estimates construction would require 1,300 workers and about 130 permanent workers to operate at full build-out. It also would generate millions of dollars annually in taxes.

But the project has been stalled by several court cases, including the company’s most recent and unsuccessful attempt to appeal the DNR sublease denial. The project also is tied up in federal court, where Millennium and its allies are contending that the state is illegally disrupting interstate commerce by blocking the terminal.

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