BOARDMAN, Ore. (AP) — The Port of Morrow along the Columbia River has filed an appeal over a nearly $1.3 million fine from state regulators for repeated wastewater violations that contaminated groundwater in the area.

Earlier this month, the Oregon Department of Environmental Quality fined the industrial park outside of Boardman for overapplying wastewater containing nitrogen to agriculture fields and failing to monitor the resulting nitrate contamination.

Regulators say the port exceeded its nitrogen limits by approximately 165 tons in four years, further contaminating groundwater that is used for drinking water in an area that DEQ says is already burdened with pollution.

In the appeal, the port disputed its fine, claiming the violations were “unintentional” and were a result of things that were out of the port’s control, Oregon Public Broadcasting reported.

The port said it believed it had enough land available to absorb the excess nitrate but “an unexpected combination of less acreage available and unusually high winter precipitation” forced the port to exceed its nitrate limits.

High levels of nitrates in drinking water are linked with serious health concerns, particularly for babies and pregnant women.

The Port of Morrow is Oregon’s second-largest port, behind the Port of Portland. It is in the Umatilla Basin of northeast Oregon, where in 1990 the state declared a Groundwater Management Area because of high levels of groundwater nitrates.

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Bigger may be better for some projects. But for the team designing and building a renewable energy production operation at the Port of Morrow, the best approach was to start small.

The first shovel of dirt hasn’t been turned for construction of the 14,000-square-foot Novus Pacific facility where potato residue and onion skins from local food processing plants will be turned into a renewable energy source. But the project team – led by Minneapolis-based Novus Energy – already knows down to the most intricate detail how the facility will function once it goes fully online.

Their secret: A miniature version of the system has been put to the test in real-world situations.

For most projects, a bug in the system usually indicates a problem. But for the Novus Pacific plant to produce energy through an anaerobic digestion process, a bug (a prokaryotic microorganism) is a necessity.

“The basic bugs are the oldest on the planet,” according to Surya Pidaparti, vice president of Novus Energy’s trademarked Novus Bio-Catalytic system. “The atmosphere was basically hydrogen and carbon dioxide. They figured out a way to exist by converting them to methane and water.”

It’s that same conversion process – use of a bug – that will allow the Novus Pacific facility to take potato waste and onion skins from area food processing plants – along with a smaller amount of cow manure from local farms – and turn them into biogas, concentrated liquid fertilizer and water clean enough to be reused for irrigation or industrial purposes.

Estimates indicated that the Novus Pacific facility, when fully operational, would be able to turn about 442,000 tons of waste into roughly 987,000 mmBTUs of green biogas, 237,000 gallons of fertilizer and 86 million gallons of water each year. The average annual revenue the operation would recognize from that would run about $9.7 million.

But potential investors in projects such as the Novus Pacific operation don’t write checks based on theory alone. They want solid, proven data. So Novus Energy and project partners Harris Mechanical and Adolfson & Peterson Construction decided to create a miniature, fully functional model of the larger plant they wanted to build at the Port of Morrow.

“We’ve spent several years working on this,” said Joseph Hull, Portland office director for Adolfson & Peterson, which will handle the construction and installation of the pre-engineered steel buildings and piping for the Novus Pacific project.

The entire operation was “scrunched down” to one that could fit on a 53-foot-by-7-foot trailer at the Port of Morrow, Hull said. Potato and onion waste from local resources went into the mini system. The output was carefully recorded and tracked.

“We utilized all of the engineering for the tiny-scale version,” Hull said. “We ran it to prove a theory … that the engineering could do what it said it could do. We proved all of the ecological aspects and the financials.”

Hull expects construction of the full-size Novus Pacific facility to begin in August. The construction window will span about 15 months, but the actual building portion will finish a few months before the end of that time frame. The last two to three months will be spent introducing the system’s bug and allowing it to multiply and stabilize.

“The system needs to ramp up very slowly,” Hull said. “You can’t just dump all the (agricultural waste) product in, flip a switch and process at maximum volume.”

The bug that will lie at the heart of the anaerobic digestion system at the Novus Pacific facility may be ancient in its nature, but it’s also high maintenance.

The bug will need a warm temperature; a drop of a few degrees could be lethal. Even the hardware to build the system has had to be taken into consideration for the Port of Morrow operation. The wrong type of paint, for example, could produce fumes dangerous to the bug.

“The system design is very critical,” Pidaparti said. “You have to think about what sort of tanks you’re going to use (and) how you’re going to manage moisture in the air.”

That’s why Novus Energy’s long-standing relationships with firms like Harris Mechanical and Adolfson & Peterson – which have formed a joint venture for the Novus Pacific project – are critical, Pidaparti said. In fact, he and Harris Mechanical’s Nick Rosenberry have worked on so many projects together, they’ve developed a unique balance.

“It’s like yin and yang,” Pidaparti said. “It’s a very complementary relationship.”

Pidaparti and Harris, along with Novus president Joe Burke, all have a strange attachment to the miniature anaerobic digester model that has allowed them to move ahead with the Novus Pacific facility. They didn’t go so far as to name it, but they did spend countless hours in the shop, crawling around on the floor and making tweaks to the demo model. Burke said it is now in a new location gathering data for a possible project between Novus Energy and a large food manufacturer.

“We joked it was like (the movie) ‘Three Men and a Baby,’ ” Pidaparti said. “Joe, Nick and I … fed, changed and burped the baby. Then we sent her out into the world. She’s in California now, but we can still check her vitals.”

At a glance

Project: Novus Pacific renewable energy plant

Location: Port of Morrow, Boardman

Total facility size: 14,000 square feet

Owner: Novus Energy

Engineer/general contractor: joint venture between Harris Mechanical and Adolfson & Peterson Construction

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The most affordable homes in Oregon are in places like Boardman, Umatilla and Pendleton along the northern rim of the state, according to a house pricing survey released by Coldwell Banker.

Patsy Keimig isn’t surprised. She is a principal broker for American West Properties’ branch in Hermiston and said houses in her area are selling like hotcakes. The housing market would be even hotter, she said, if the inventory were greater.

“If we had more homes, we’d sell them,” Keimig said. “Our area is one of the most active real estate markets in the state. We just need more land and more homes.”

A four-bedroom, two-bath home in Hermiston runs about $140,000, she said. The same home in Portland would be more than $300,000. According to the housing price survey, the average price of a home that size in Pendleton is $185,000. The national average is $292,100.

Pendleton is a little pricier than Hermiston, Keimig said. “The home prices in Umatilla and Boardman drag our average down a bit,” she added.

Keep an eye on Boardman, Keimig advised.

“Big things are happening in the community,” she said. “In the next five years or so, you’re going to see some major construction in Boardman.”

Art Kegler, the owner of American West Properties in Boardman, said the Port of Morrow has a construction budget of $800 million that will be spent in the next few years.

The report lists Lake Oswego, Corvallis and Portland as the most expensive home markets in Oregon, with average prices from $350,000 to $500,000. Coos Bay and Woodburn are the second- and third-least expensive, with averages of $186,600 and $188,000, respectively.

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Port of Morrow officials expect to finalize this week the terms of an agreement to sell 99 acres of land to Boardman Acquisitions LLC for construction of a new data center, said Lisa Mittelsdorf, director of economic development at the port. The $1.98 million sale ($20,000 per acre) also includes an option for the company to purchase another 100 acres.

Mittelsdorf couldn’t confirm the identity of the company behind Boardman Acquisitions, but records indicate that it is San Antonio-based Rackspace Hosting. According to meeting minutes from a June 27 special port commission meeting, the group approved a resolution to include Rackspace in the Columbia River enterprise zone. That would provide the company property tax abatements on future property improvements for at least three years.

A Rackspace spokeswoman, Rachel Ferry, wasn’t able to verify whether the company had plans at the port.

Nevertheless, Mittelsdorf said port staffers are “anxious” for the sale to wrap up.

“I don’t know what their time frame is to start construction at this point, but it should be a great project,” she said.

Amazon earlier this year broke ground on a second 120,000-square-foot facility at the port. Mittelsdorf said that project is nearly done.

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The coal industry soon could give the Northwest a steady flow of huge construction projects.

In fact, six coal export terminals are being proposed in Oregon and Washington; one, a $246 million facility for Australia-based , is in the permitting stage. The project is expected to provide more than 700 local construction jobs at the , according to .

The industry is eyeing the region as a hub for export because of its proximity to Asia, said Al Knapp, project manager for Ambre Energy. He said multiple countries – including Japan, which is moving away from nuclear power – are looking to coal as a cheap and reliable energy source. Presently, most coal is shipped from the East Coast.

“I think there is an opportunity in Asia, and like any good business person would want to do, you go where your market is,” Knapp said. “The Pacific Northwest is the quickest route there.”

When completed, the Ambre Energy export facility, named Morrow Pacific, will receive up to 3,000 tons of coal per hour. The coal will be transferred immediately to either barges or storage units able to hold up to 100,000 tons of coal at a time.

Eventually, the coal will be transported upriver to the Port of St. Helens, where it will be transferred from barges to oceangoing vessels. The Port of St. Helens is the proposed location for a $150 million to $200 million coal export terminal for national energy storage company . Allen Fore, communications director for Kinder Morgan, said the Port Westward project was inspired by the coal industry’s newfound interest in the region.

“There is not an existing U.S. West Coast coal export facility,” he said. “Our customers, the coal companies, have a choice … obviously the West Coast is the closest. We wouldn’t go there if there wasn’t such a strong interest.”

However, some local groups and organizations are opposing the proposed projects. Portland General Electric stated that it would not allow construction of the Port Westward project on any of its leased property at the Port of St. Helens; the coal dust generated could damage other facilities on the property, PGE spokesman Steve Corson said. Kinder Morgan is still looking for developable port property.

Coal export terminals could have major negative environmental, health and economic effects, said Laura Stevens, associate organizing representative of the . According to her, the mercury and arsenic in coal dust can lead to heart disease. Also, Oregon’s reputation could take a hit if it were to invite an industry that the rest of the country has started to move away from, she said.

“The demand for coal is stagnating in the U.S. because it’s is a very dirty source of energy,” she said. “Oregon’s brand is a strong, clean energy economy, and we have a reputation for being green and bringing in businesses that really look for that quality of life – this would be contrary to that.”

The Columbia River Inter-Tribal Fish Commission, a coalition of several Native American tribes, has stated that Morrow Pacific operations would significantly harm fish in the Columbia River.

But both Ambre Energy and Port of Morrow officials say Morrow Pacific will feature design elements to mitigate the potentially harmful effects of large amounts of coal.

To avoid the spread of coal dust, every holding container – from trains to barges – will be sealed completely. The roofs of train carts carrying coal normally aren’t sealed because of a higher risk of combustion; however, Morrow Pacific will have infrared heat-detection capabilities and carbon monoxide monitors to combat this problem, Knapp said.

The Port of Morrow has experienced no negative effects from a coal export terminal that has operated nearby for more than 20 years, said Gary Neal, general manager of the port.

“We haven’t seen apparently what other people either perceive or believe is going on,” he said. “It’s going to be an enclosed system on enclosed barges, so I don’t quite understand the environmental impacts (critics are) talking about.”

The information released by Ambre Energy and other coal companies should not be trusted, according to Stevens. In Longview, Wash., where Ambre recently acquired a heavy industrial site to build another terminal, company officials made clear the terminal would take in 5.6 million tons of coal annually, Stevens said; it was discovered later that the company actually plans to take in 60 million to 80 million tons annually.

“These are big, bad coal companies; these are not the type of companies that we want to be dealing with,” she said. “We have seen a lot of dishonesty from them.”

The Morrow Pacific project is continuing to move forward. Ambre Energy has applied to the U.S. Army Corps of Engineers for a permit, and a two-month comment period ended recently. The company will submit to environmental review early next month, and another comment period will follow.

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If not for a bit of jealousy, the ‘s newest tourist attraction might not be under construction.

When the opened a factory in Boardman in 2001, the port’s general manager, Gary Neal, hoped it would have a visitors’ center similar to the one at the group’s flagship factory in Tillamook. That facility expanded twice, in 1979 and 1994, to accommodate nearly 1 million guests annually.

But the plans for the Boardman plant involved only making cheese. After the disappointment wore off, Neal began thinking.

“We have lots of food processing around here – french fry plants and vegetable facilities, as well as a variety of alternative energy plants,” Neal said. “I’m able to see how the technology is evolving and advancing, but most people can’t.”

The Port of Morrow, which encompasses more than 12,000 acres of land near Boardman, is now building an approximately $6 million interactive visitors’ center of its own. The Sustainable Agriculture and Energy (SAGE) Center will show off the technologies, processes and products that drive the economy in rural Morrow County.

The 23,000-square-foot complex is being built along Interstate 84, with the port serving as the general contractor. But Portland-based is designing and creating the unique exhibits that will fill the space.

Formations is in the final design phase for several interactive, audiovisual displays that will highlight the technology used in food processing and farming, and the science behind alternative energy production.

In one corner of the exhibit hall, visitors will be able to step into what appears to be the basket of a hot air balloon. The basket will lift and then rock back and forth as large movie projections help passengers imagine they are soaring over forests in the north end of Morrow County, through irrigated wheat fields and along the Columbia River to the Port of Morrow.

The 10,000-square-foot exhibit space also will feature a moving sculpture that shows how a potato becomes french fries as well as a tractor ride that lets drivers plow virtual fields and then see how straight their paths were.

“We’re doing a couple of really cool experiences in there,” said Phil Buettner, Formations’ general manager. “Our work is often likened to the (). When we say we build OMSIs, people actually get it.”

For Buettner, creating a successful exhibit is about integrating materials and textures with audiovisual elements that create a sensory educational experience. All of the components are custom fabricated on Southeast 202nd Avenue in Portland.

The variety of interactive displays challenged the construction workers.

“We’ve got miles and miles of conduit underneath the slab,” project manager Mark Patton said. “Coordinating all of that is the hardest part because we don’t want to miss anything.”

Plans for the SAGE Center got off the ground in 2009 when the Legislature offered $2.27 million in state lottery money. The state granted $1.8 million more last year, and the port and local companies are contributing, although total project costs and are not finalized and money is still being sought, according to Neal.

Architect Ross Farland and consulting designer Terence Thornhill tried to reflect the area’s agricultural industries in as much of the design as possible. The entrance to the SAGE Center features cylindrical towers, so that visitors feel like they are walking into a grain silo.

“We wanted to pay homage to the abundant agricultural influences without being overly playful with them,” Thornhill said.

When the facility opens next year, potentially in March, it will also include a 200-seat theater and a gift shop.

Notably absent from the project, however, are any references to coal. Oregon’s only coal-fired plant is in Boardman. The plant, owned by , is scheduled to stop burning the fossil fuel by the end of 2020.

However, Australian-based has filed initial permits for a project that would transport coal by rail to the Port of Morrow, where it would be transferred to barges and shipped down the Columbia River to a proposed facility at the Port of St. Helens.

But Neal said that coal doesn’t have a place in the new educational center.

“That’s a different issue – it’s not part of the alternative energy message we’re displaying,” he said. “We’ve got wind energy, methane digesters, alternative fuels and natural gas; that’s the message that needs to be shared.”

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