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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Plans to export Western coal to Far Eastern markets through the Pacific Northwest are going south. Three of six proposed coal export terminals have been cancelled, and opponents are working to kill the other three.
Last month, Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) scrapped plans to build the Port Westward coal export terminal in the Port of St. Helens, Oregon. This $150 million project would have exported up to 22 million tons of coal per year by 2022.
In April, Project Mainstay, located in the Port of Coos Bay, Oregon, was shelved by its developer, the Oregon International Port of Coos Bay (Coos Bay, Oregon). That project, with a total investment value (TIV) of $432 million, would have been capable of exporting up to 10 million tons of coal per year. It was scheduled to break ground in August 2014 and begin operating in late 2015.
Last August, RailAmerica abandoned plans to build a facility to store and export coal at the Port of Grays Harbor in Hoquiam, Washington. That project would have been capable of exporting up to 5 million tons of coal annually from the Powder River Basin of Montana, Wyoming, and the Dakotas.
Faced with stagnant domestic demand for thermal coal, U.S. coal producers and rail companies want to export coal to Asian markets. For more on that issue, see February 23, 2012, article - Facing Soft U.S. Coal Market, Arch Coal Seeks to Boost Exports. However, proposed export terminals in the Pacific Northwest have been strongly opposed by environmental and other organizations there, which base their opposition on various issues. For more on that issue, see November 13, 2012, article - Industry Coalition Battles Local Opposition to Northwest Coal Export Terminals.
Reaction to each project cancellation has been along predictable lines: opponents have cheered while developers have rued the outcome.
In the Pacific Northwest, three proposed coal export terminals remain active:
"We are pleased that the permitting process is moving forward," said Clark Moseley, president and chief executive of the Morrow Pacific project, in a May 31 statement. "While this step is not a green light to begin operations, the DEQ permits, once issued, will be the signal for us to start construction, putting hundreds of Oregonians back to work." Opponents are expected to challenge the draft permits, and potentially litigate any final permits.
A pro-export group, the Alliance for Northwest Jobs & Exports, is trying to keep the region's three remaining export terminal projects alive by turning up the heat on elected officials in Washington State and Oregon. Last week, the group called on Washington Governor Jay Inslee to ensure the state remains "open for business" by supporting the coal export terminals. Washington's Department of Ecology is reviewing two proposals that would be located in that state. Inslee recently supported providing incentives and streamlining the regulatory process for Boeing's proposal to manufacture the 777x jumbo airlines in that state.
The alliance called on the governor to take the same pro-business, pro-growth stance for other industrial projects--including theirs. "Not all areas of the state have access to the ability to make airplanes and software," read the letter to Inslee. "In many cases, the economies of the more rural and suburban parts of Washington are fueled by more traditional industries. And they have the right to rely upon an ability to utilize the state's ports, roads and rail infrastructure every bit as much as the residents of the more populous counties. Services like rail transportation are not just reserved for the larger cities, only to become a potential environmental 'impact' when needed to spur the economies of other regions."
The group noted that Sally Jewell, Secretary of the Department of the Interior (DOI) (Washington, D.C.), recently joined with the governors of Oregon and Washington to sign a new Declaration of Cooperation aimed at expediting review and permitting processes for energy and infrastructure developments in the Northwest. President Obama also issued a memorandum to the heads of executive departments and agencies calling for the streamlining of infrastructure and permitting requirements to cut review timelines for major projects in half, while improving outcomes.
"We can't help but contrast the treatment being afforded to the 777x (which we consider to be most appropriate) with that being given to the Gateway Pacific Terminal and other port projects," the alliance said it its letter to Inslee. "These projects, which would expand maritime export capacity for U.S. producers, are the subject of an unprecedented and expanded regulatory review process. Multiple hearings across the state have been held to receive input on the scope of the (Environmental Impact Statement) process, including (potentially) an examination of everything from train traffic to greenhouse gas emissions here, and such emissions involved with the use of products overseas. This is uncharted territory which, if set as a precedent for state policy, could grind future port and industrial job growth to a halt. Applying such standards to Boeing's projects, for example, could result in unwanted results, including the view that Washington is not the place to do business."
In a website posting, Lauri Hennessey, spokesperson for the Alliance for Northwest Jobs & Exports, added: "This really is about whether Washington state is open for business or not. A decision to expand the regulatory review process for the proposed terminals would set an unintended and dangerous precedent that could damage our state's competitiveness and economy for decades to come."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Last month, Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) scrapped plans to build the Port Westward coal export terminal in the Port of St. Helens, Oregon. This $150 million project would have exported up to 22 million tons of coal per year by 2022.
In April, Project Mainstay, located in the Port of Coos Bay, Oregon, was shelved by its developer, the Oregon International Port of Coos Bay (Coos Bay, Oregon). That project, with a total investment value (TIV) of $432 million, would have been capable of exporting up to 10 million tons of coal per year. It was scheduled to break ground in August 2014 and begin operating in late 2015.
Last August, RailAmerica abandoned plans to build a facility to store and export coal at the Port of Grays Harbor in Hoquiam, Washington. That project would have been capable of exporting up to 5 million tons of coal annually from the Powder River Basin of Montana, Wyoming, and the Dakotas.
Faced with stagnant domestic demand for thermal coal, U.S. coal producers and rail companies want to export coal to Asian markets. For more on that issue, see February 23, 2012, article - Facing Soft U.S. Coal Market, Arch Coal Seeks to Boost Exports. However, proposed export terminals in the Pacific Northwest have been strongly opposed by environmental and other organizations there, which base their opposition on various issues. For more on that issue, see November 13, 2012, article - Industry Coalition Battles Local Opposition to Northwest Coal Export Terminals.
Reaction to each project cancellation has been along predictable lines: opponents have cheered while developers have rued the outcome.
In the Pacific Northwest, three proposed coal export terminals remain active:
- Gateway Pacific near Bellingham, Washington, which is capable of exporting approximately 53 million tons of coal annually. This $655 million project, under development by SSA Marine (Seattle, Washington), a unit of Carrix Incorporated (Seattle, Washington), is in the permitting process.
- Millennium Bulk Terminals in Longview, Washington, could export up to 44 million tons of coal per year. This $600 million project, being developed by Ambre Energy Limited (Salt Lake City, Utah), also is in the permitting phase.
- Morrow Pacific is designed to export up to about 8 million tons of coal per year. This two-phase, two-city, $246 million project, also being developed by Ambre Energy, is experiencing delays in the permitting process. This project would involve constructing a transshipment terminal at the Port of Morrow, near Boardman, Oregon, on the Columbia River. That facility would receive coal by rail from states in the Intermountain West. At Boardman, the coal would be placed on covered barges and moved down the Columbia River to a transloading facility located in the Port of St. Helens, Washington. The transloader would transfer coal from river barges to ocean-going Panamax ships, which would be headed toward overseas markets in Japan, Korea and Taiwan. Up to 3.5 million metric tons of coal per year could be shipped in Phase I of the project. In Phase II, shipping capacity would be expanded to 8 million metric tons per year.
"We are pleased that the permitting process is moving forward," said Clark Moseley, president and chief executive of the Morrow Pacific project, in a May 31 statement. "While this step is not a green light to begin operations, the DEQ permits, once issued, will be the signal for us to start construction, putting hundreds of Oregonians back to work." Opponents are expected to challenge the draft permits, and potentially litigate any final permits.
A pro-export group, the Alliance for Northwest Jobs & Exports, is trying to keep the region's three remaining export terminal projects alive by turning up the heat on elected officials in Washington State and Oregon. Last week, the group called on Washington Governor Jay Inslee to ensure the state remains "open for business" by supporting the coal export terminals. Washington's Department of Ecology is reviewing two proposals that would be located in that state. Inslee recently supported providing incentives and streamlining the regulatory process for Boeing's proposal to manufacture the 777x jumbo airlines in that state.
The alliance called on the governor to take the same pro-business, pro-growth stance for other industrial projects--including theirs. "Not all areas of the state have access to the ability to make airplanes and software," read the letter to Inslee. "In many cases, the economies of the more rural and suburban parts of Washington are fueled by more traditional industries. And they have the right to rely upon an ability to utilize the state's ports, roads and rail infrastructure every bit as much as the residents of the more populous counties. Services like rail transportation are not just reserved for the larger cities, only to become a potential environmental 'impact' when needed to spur the economies of other regions."
The group noted that Sally Jewell, Secretary of the Department of the Interior (DOI) (Washington, D.C.), recently joined with the governors of Oregon and Washington to sign a new Declaration of Cooperation aimed at expediting review and permitting processes for energy and infrastructure developments in the Northwest. President Obama also issued a memorandum to the heads of executive departments and agencies calling for the streamlining of infrastructure and permitting requirements to cut review timelines for major projects in half, while improving outcomes.
"We can't help but contrast the treatment being afforded to the 777x (which we consider to be most appropriate) with that being given to the Gateway Pacific Terminal and other port projects," the alliance said it its letter to Inslee. "These projects, which would expand maritime export capacity for U.S. producers, are the subject of an unprecedented and expanded regulatory review process. Multiple hearings across the state have been held to receive input on the scope of the (Environmental Impact Statement) process, including (potentially) an examination of everything from train traffic to greenhouse gas emissions here, and such emissions involved with the use of products overseas. This is uncharted territory which, if set as a precedent for state policy, could grind future port and industrial job growth to a halt. Applying such standards to Boeing's projects, for example, could result in unwanted results, including the view that Washington is not the place to do business."
In a website posting, Lauri Hennessey, spokesperson for the Alliance for Northwest Jobs & Exports, added: "This really is about whether Washington state is open for business or not. A decision to expand the regulatory review process for the proposed terminals would set an unintended and dangerous precedent that could damage our state's competitiveness and economy for decades to come."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
