Columbia Riverkeeper
407 Portway Ave., Ste. 301
Hood River, OR 97031
phone 541.387.3030
www.columbiariverkeeper.org

April 18, 2019
Brian Reissaus
Staff Chairperson
Committee on Foreign Investment in the United States
Office of Investment Security
Room 5012
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Sent via certified mail and email to: CFIUS@treasury.gov
RE: Potential foreign governmental control of Northwest Innovation Works
Dear Staff Chairperson Reissaus and CFIUS Members:
Northwest Innovation Works is a U.S. limited liability corporation that is owned by
parent companies controlled by the Chinese Government. Northwest Innovation Works is
currently seeking $2 billion in financial assistance from the U.S. Government to continue its
plans to construct a methanol refinery on the shores on the Columbia River that would make and
ship methanol to China. Columbia Riverkeeper, a non-profit conservation organization, submits
this letter to the Committee on Foreign Investment in the United States (CFIUS) seeking review,
under section 721(b)(2)(E) of the Defense Production Act of 1950 (Section 721), as amended by
the Foreign Investment and National Security Act of 2007 (FINSA), of the Chinese-government
parent company’s acquisition of a major energy asset that may present national security
considerations for our energy supply and transportation infrastructure. If CFIUS finds that the
acquisition was a covered transaction under Section 721(d), the President may modify or prohibit
the transaction.
Northwest Innovation Works is proposing to construct the nation’s largest gas-tomethanol manufacturing and export facility at the Port of Kalama, in southwest Washington
State. Relying on proprietary technology, Northwest Innovation Works would use North
American natural gas as feedstock to create methanol. Northwest Innovation Works would then
export methanol to China for use as fuel or petrochemicals. The proposal is similar to liquified
natural gas (LNG) export.
Northwest Innovation Works may soon receive over $2 billion of financial assistance
from the United States government. Specifically, Northwest Innovation Works applied to the
U.S. Department of Energy for a federal loan guarantee to finance the proposed methanol

To protect and restore the water quality of the Columbia River and all life connected to it, from the headwaters to the Pacific Ocean.

 refinery, under Title XVII of the Energy Policy Act of 2005.1 The U.S. Department of Energy is
currently processing the loan guarantee request.
The Chinese government may have legal or actual control over Northwest Innovation
Works. Exhibit 1 (attached) is an excerpt from a third-party appraisal that Northwest Innovation
Works submitted to the U.S. Department of Energy to support an application for financial
assistance. Exhibit 1 shows that Northwest Innovation Works is majority or wholly owned by a
U.S. company called Pan-Pacific Energy Corp. (PPE). PPE is majority or wholly owned by a
Chinese company called Shanghai Bi Ke Clean Energy Technology Co. Ltd. (commonly called
“CECC”). Most shares (45%) of CECC are owned by the Chinese Academy of Sciences
Holdings Co. Ltd. (CASH), which is a state-owned company and the investment management
arm of the Chinese Academy of Sciences, a Chinese government agency. The other significant
(44%) shareholder in CECC—called Double Green Bridge Hong Kong—appears to be
composed of managers of CASH.2 Moreover, Exhibit 2 (attached) makes clear that the Chinese
Academy of Sciences is actually responsible for Northwest Innovation Works’ proposal. Exhibit
2 describes a meeting between the Governor of Washington and senior officials of the Chinese
Academy of Sciences and CASH, as well as Northwest Innovation Works employees. The
document strongly suggests that the Chinese Academy of Sciences controls the methanol
proposal and merely “uses the dba of Northwest Innovation Works.” These and other
circumstances suggest that the Chinese government has legal or actual control over Northwest
Innovation Works.
Riverkeeper brings these facts to CFIUS’s attention because the transaction(s) that
brought Northwest Innovation Works under foreign control may present national security
considerations, within the meaning of Section 721(f) and the applicable guidance,3 as described
below.
CFIUS review may be appropriate because foreign control of Northwest Innovation
Works appears to have resulted from a “foreign government-controlled transaction” within the
meaning of Section 721(f)(8). As explained by Section 721(a)(4), 31 C.F.R. § 800.214, and the
guidance, a “foreign government-controlled transaction” occurs when a foreign government—or
an entity controlled by or acting on behalf of a foreign government, including foreign
government agencies and state-owned enterprises—acquires control of a U.S. business. As
1

Pacific Standard, Taxpayers may soon be on the hook for a $2 billion fracked gas refinery (November 7,
2018).
2

E&E News Energywire, Enormous Northwest refineries would feed China exclusively
(November 17, 2015) (“Originally [CASH’s] partner was the oil company BP. Earlier this year, BP has
sold its part to an investor group, called Double Green Bridge, made up of managers of CASH.”).
3

Guidance Concerning the National Security Review Conducted by the Committee on Foreign Investment
in the United States, 73 Fed. Reg. 74567 (December 8, 2008).

Letter to CFIUS re Foreign Control of Northwest Innovation Works – Page 2

 explained above, the Chinese government, acting through the state-owned CASH (and perhaps
other persons), appears to have gained control of the U.S. businesses Northwest Innovation
Works. According to Section 721(b)(1)(B), if CFIUS “determines that the covered transaction is
a foreign government-controlled transaction, the Committee shall conduct an investigation of the
transaction . . . .” (emphasis added). Moreover, past practices of the foreign government at issue
implicate national security considerations identified by Congress in the Foreign Investment Risk
Review Modernization Act of 2018 (FIRRMA).4
CFIUS review also appears warranted because of the potential for foreign control of
critical infrastructure, including a major energy asset, as well as the long-term impacts to United
States sources of energy. See Section 721(f)(6) and (8). Methanol is a versatile, energy-dense
product, similar in some ways to gasoline, but easier to distribute than LNG or natural gas. Some
energy analysts even suggest transitioning away from crude-oil-derived transportation fuels and
towards methanol made from natural gas and other sources. One or more large new sources of
methanol could therefore legitimately be considered a “major energy asset” within the meaning
of Section 721(f)(6). Additionally, Northwest Innovation Works would consume a regionally
significant amount of natural gas; on a per-day basis, one third as much natural gas as the entire
state of Washington—and the company has plans for several more similarly sized methanol
export refineries. The natural gas consumption required for this and similar projects proposed by
Northwest Innovation Works may have long-term impacts on U.S. energy resources. CFUIS has
reviewed similar transactions that “involved U.S. businesses in the energy sector at various
stages of the value chain: The exploitation of natural resources, the transportation of these
resources (e.g., by pipeline), [and] the conversion of these resources to power,” as wells as
transactions affecting “the nation’s transportation system, including maritime shipping and port
terminal operations.”5 Northwest Innovation Works’ proposal implicates all of these concerns.
As such, foreign control of the project may present national security considerations within the
meaning of Section 721(f)(6) and (8), justifying CFIUS review.
The following Northwest Innovation Works officials may be subject to CFIUS’s
jurisdiction and possess additional information about foreign control of Northwest Innovation
Works: Simon Zhang (Chief Executive Officer); Murray “Vee” Godley III (Chief Development
Officer); Kent Caputo (General Counsel); and Richard DeBolt (Director of External Relations).

4

Foreign Investment Risk Review Modernization Act of 2018, H.R. 5515, Section 1702(c)(1) – (3) (“It is
the sense of Congress that, when considering national security risks, the Committee on Foreign
Investment in the United States may consider— (1) whether a covered transaction involves a country of
special concern that has a demonstrated or declared strategic goal of acquiring a type of critical
technology or critical infrastructure . . . [and] (3) whether any foreign [government] engaging in a
covered transaction with a United States business has a history of complying with United States laws and
regulations”).
5

73 Fed. Reg. 74567, 74570.

Letter to CFIUS re Foreign Control of Northwest Innovation Works – Page 3

 Riverkeeper has little connection to matters of national security but, after becoming
aware of the facts and law described above, presents this information to CFIUS out of an
abundance of caution. Riverkeeper understands that CFIUS review is typically initiated by a
voluntary disclosure, but CFIUS may request information or unilaterally initiate review of any
covered transaction, even after that transaction has been concluded.6 Please do not hesitate to
contact me if Riverkeeper can be of further assistance.
Sincerely,

Miles Johnson
Senior Attorney
(541) 490 – 0487
miles@columbiariverkeeper.org
Exhibits:
1. Jacobs Engineering Inc., Independent Engineers Report for Kalama Methanol Plant
(January 8, 2016) (excerpt).
2. Briefing Memo to Governor Inslee, Meeting with Representatives of the Chinese
Academy of Sciences (February 12, 2015).
Cc’d via email or U.S. mail:
• Secretary Steven Mnuchin, Department of Treasury
• Attorney General William Barr, Department of Justice
• Acting Secretary Kevin McAleenan, Department of Homeland Security
• Secretary Wilbur Ross, Department of Commerce
• Acting Secretary of Defense Patrick M. Shanahan, Department of Defense
• Secretary Mike Pompeo, Department of State
• Secretary Rick Perry, Department of Energy
• Trade Representative Robert E. Lighthizer, Office of the U.S. Trade Representative
• Director Kelvin Droegemeier, Office of Science & Technology Policy
• Director Mick Mulvaney, Office of Management & Budget
• Senator John Cornyn
• Senator David Perdue
• Senator Tim Scott
• Senator Michael Crapo
• Steven Taracevicz, Satori Partners, Inc.
• media outlets
6

Section 721(b)(1)(D)(i); see also 31 C.F.R. § 800.401(b), (c); see also 73 Fed. Reg. 74567, 74569.

Letter to CFIUS re Foreign Control of Northwest Innovation Works – Page 4