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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The prospect of heavy exports of coal to Asia through terminals in California, Oregon and Washington, long seen as a critical boost for embattled coal companies in the U.S., is looking less likely now. California legislation adopted this summer prohibited state agencies from funding any export terminal project involving coal, effectively killing at least part of a planned export terminal slated to be built in Oakland. A proposal to build an export terminal in Washington State was stopped this summer after it was unable to secure a permit. A third project, slated to be built in Boardman, Oregon, was abandoned by the developer last month.
A few years back, there were at least six coal-export terminals being developed for the West Coast. Today, only one is still active--the Millennium Bulk Terminals project in Longview, Washington, being developed by Lighthouse Resources Incorporated (Salt Lake City, Utah). The project has strong proponents and opponents. Potentially more worrisome, though, is the decline in U.S. coal exports, which could undermine the project's viability. For more on the difficulties companies have had in developing coal-export terminals on the West Coast, see July 11, 2016, article - Is it Too Late for a Planned West Coast Coal-Export Terminal?, February 24, 2015, article - Executive: Proposed Coal-Export Terminal in U.S. Northwest Responds to Asian Market Demand, and June 4, 2013, article - Coal Export Group Fights to Save Three Proposed Export Terminals.
"It is a disgrace that more is not being done to assist the beleaguered coal-mining industry in the U.S.," said Joseph Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry. "We should be encouraging the construction of these West Coast terminals, instead of creating roadblocks to development. Japan is developing the world's cleanest and most efficient integrated coal gasification combined-cycle (IGCC) power projects that would love to use low-sulfur coal from the Powder River Basin in Wyoming. Let's build more terminals to open up new markets for U.S. coal." For more information, see October 31, 2016, article - Wyoming Coal Could be Used for New IGCC Power Plants in Japan.
Washington State
The company developing the only active proposed coal-export terminal on the West Coast received a 3,000-page draft environmental impact statement (DEIS) on its project at the end of September from the U.S. Army Corps of Engineers. In late October, four public hearings were held by the Army Corps to gather public comment.
The Millennium Bulk Terminal in Longview, scheduled to be built in two phases, has a TIV of about $643 million. At full build out, it could export up to 44 million tons of coal annually.
Upon receiving the 3,000-page DEIS, Millennium Bulk Terminals Chief Executive Bill Chapman issued the following statement: "Millennium Bulk Terminals is the right project in the right location to meet the increasing Asian demand for better quality American coals. Our project has been subjected to an unprecedented and rigorous environmental review process, further assuring that our commitment to exemplary environmental performance will be kept."
"Both state and county regulators made it clear in their Draft Environmental Impact Statements that we can meet Washington's strict environmental standards," he continued. "We're confident the federal draft environmental impact statement by the Army Corp of Engineers will also deliver a favorable review."
In early November, after having a month to review the DEIS, Chapman said this in a statement emailed to Industrial Info: "After reviewing the Army Corps of Engineering draft environmental impact statement, we see all green lights to receive our permits. The agency report confirms that we will meet strict environmental standards as we redevelop this old smelter site. Japanese and Korean demand (for coal) continues to rise, and the current increase in pricing supports that now is the right time to build this terminal and U.S. coal is the right fuel to meet that demand--both in terms of using higher-quality American coal, and in terms of preserving and growing American jobs."
A final EIS from the Army Corps of Engineers is expected in mid-2017, the developer said. The Washington State Department of Ecology already has released its DEIS, and a final assessment is expected in April 2017.
Eric Schudiske, a spokesman for the Millennial Bulk Terminal, said the project would not be affected by Washington State's recently enacted Clean Air Rule, or by the results of Initiative 732, which, if approved by voters November 8, would levy a carbon tax on fossil fuels.
Schudiske said coal demand in Asia is strong, noting a recent Wall Street Journal article on a 40% increase in the price of coal exported from North Korea. Some of that price increase is due to restrictions on domestic mining imposed by China, the article said. Other reasons for the price spike included the interruption of coal production at two large Australian mines and heavy rains in a northeastern China province, which cut into production there, the Journal article noted.
However, U.S. coal exports to Asia fell 34% during the first half of 2016, to 7.45 million short tons this year compared to 11.4 million short tons for the first six months of 2015, according to data from the U.S. Energy Information Administration (EIA) (Washington, D.C.). Exports to Europe also declined by about 38% during the first six months of 2016, to about 13.2 million short tons from 21.3 million short tons for the comparable year-earlier period.
The EIA also said U.S. coal exports are fetching $15 to $20 less per short ton for the first half of 2016 compared to the first half of 2015. Export prices for the first half of 2016 are about half what they were for the comparable period in 2012.
There are numerous coal-fired power plants operating in Asia, and many more under development. But in April of this year, China announced as many as 200 planned coal-fired power projects may not be completed. Construction of some approved coal-fired generators may be pushed out until 2018, according to a report in The New York Times. The 200 or so planned projects that may not be completed have aggregate generating capacity of 105,000 megawatts (MW).
The Chinese government's April announcement may dim the outlook for the growth of coal-fired power in that country, but other Asian nations, including India, Indonesia, Turkey and Vietnam, still are actively developing billions of dollars of coal-fired power plants.
Another proposed Washington State coal-export terminal, the Gateway Pacific Coal Terminal at Cherry Point, was halted this summer after U.S. Army Corps of Engineers rejected the developer's application for an environmental permit. This project was being developed by SSA Marine (Seattle, Washington), a unit of Carrix Incorporated (Seattle, Washington). That project, valued at about $655 million, was scheduled to be built in phases. At full build-out, it would have been able to export up to 54 million tons of coal per year.
California
This summer, four Utah counties abandoned a plan to export their coal through a proposed terminal in Oakland, California, citing local opposition, including from Oakland's City Council. With their decision, those counties walked away from up to $53 million in Utah economic development funding. Shortly thereafter, California Governor Jerry Brown signed S.B. 1279, which prohibited the California Transportation Commission from funding new bulk-coal terminals in California. It takes effect in January 2017.
That coal-export project had a total investment value of about $250 million. It is part of a larger, $1.2 billion plan to redevelop an old Army base. At full build-out, the export terminal would be able to export up to 9.5 million tons per year of various non-coal commodities, such as potash limestone, salt and hay.
A spokesman for the Oakland project, the Oakland Bulk and Oversized Terminal (OBOT), told Industrial Info the company was "evaluating multiple options going forward and is not doing media for the time being."
Oregon
Lighthouse Resources, which was developing a proposed coal-export terminal at Boardman, Oregon, abandoned that project last month after lengthy delays in trying to secure environmental permits. The Morrow Pacific Coal Terminal project included several projects that had an overall value of about $162 million. All told, the terminal, which was scheduled to be built in phases, would have been able to export up to 8 million tons of coal per year.
Under development since 2011, the Morrow project was denied environmental permits by the U.S. Army Corps of Engineers (in 2016) and state of Oregon (in 2014). In its October announcement that it was abandoning that project, Lighthouse President and Chief Executive Everett King said his company started shipping Powder River Basin coal to Asia through the Westshore Terminals in Vancouver, British Columbia. "Though we are disappointed for our Morrow Pacific Project supporters, we are very excited to commence delivery of products to our customers."
"We are very excited to commence supplying our South Korean customers with the coal they've sought," King said October 13. "South Korea has one of the cleanest, most efficient coal-fired electrical generation fleets on the planet. Our ability to now ship to our customers in Asia allows us to achieve our short-term goals while we continue to focus on further long-term growth at Millennium. " Lighthouse purchased the Millennium Bulk Terminals project earlier this year.
A separate Oregon project, the Coos Bay Mainstay Coal Export Terminal, was cancelled in May 2013. That project, valued at $432 million, would have been able to export up to 10 million tons of coal per year.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
A few years back, there were at least six coal-export terminals being developed for the West Coast. Today, only one is still active--the Millennium Bulk Terminals project in Longview, Washington, being developed by Lighthouse Resources Incorporated (Salt Lake City, Utah). The project has strong proponents and opponents. Potentially more worrisome, though, is the decline in U.S. coal exports, which could undermine the project's viability. For more on the difficulties companies have had in developing coal-export terminals on the West Coast, see July 11, 2016, article - Is it Too Late for a Planned West Coast Coal-Export Terminal?, February 24, 2015, article - Executive: Proposed Coal-Export Terminal in U.S. Northwest Responds to Asian Market Demand, and June 4, 2013, article - Coal Export Group Fights to Save Three Proposed Export Terminals.
"It is a disgrace that more is not being done to assist the beleaguered coal-mining industry in the U.S.," said Joseph Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry. "We should be encouraging the construction of these West Coast terminals, instead of creating roadblocks to development. Japan is developing the world's cleanest and most efficient integrated coal gasification combined-cycle (IGCC) power projects that would love to use low-sulfur coal from the Powder River Basin in Wyoming. Let's build more terminals to open up new markets for U.S. coal." For more information, see October 31, 2016, article - Wyoming Coal Could be Used for New IGCC Power Plants in Japan.
Washington State
The company developing the only active proposed coal-export terminal on the West Coast received a 3,000-page draft environmental impact statement (DEIS) on its project at the end of September from the U.S. Army Corps of Engineers. In late October, four public hearings were held by the Army Corps to gather public comment.
The Millennium Bulk Terminal in Longview, scheduled to be built in two phases, has a TIV of about $643 million. At full build out, it could export up to 44 million tons of coal annually.
Upon receiving the 3,000-page DEIS, Millennium Bulk Terminals Chief Executive Bill Chapman issued the following statement: "Millennium Bulk Terminals is the right project in the right location to meet the increasing Asian demand for better quality American coals. Our project has been subjected to an unprecedented and rigorous environmental review process, further assuring that our commitment to exemplary environmental performance will be kept."
"Both state and county regulators made it clear in their Draft Environmental Impact Statements that we can meet Washington's strict environmental standards," he continued. "We're confident the federal draft environmental impact statement by the Army Corp of Engineers will also deliver a favorable review."
In early November, after having a month to review the DEIS, Chapman said this in a statement emailed to Industrial Info: "After reviewing the Army Corps of Engineering draft environmental impact statement, we see all green lights to receive our permits. The agency report confirms that we will meet strict environmental standards as we redevelop this old smelter site. Japanese and Korean demand (for coal) continues to rise, and the current increase in pricing supports that now is the right time to build this terminal and U.S. coal is the right fuel to meet that demand--both in terms of using higher-quality American coal, and in terms of preserving and growing American jobs."
A final EIS from the Army Corps of Engineers is expected in mid-2017, the developer said. The Washington State Department of Ecology already has released its DEIS, and a final assessment is expected in April 2017.
Eric Schudiske, a spokesman for the Millennial Bulk Terminal, said the project would not be affected by Washington State's recently enacted Clean Air Rule, or by the results of Initiative 732, which, if approved by voters November 8, would levy a carbon tax on fossil fuels.
Schudiske said coal demand in Asia is strong, noting a recent Wall Street Journal article on a 40% increase in the price of coal exported from North Korea. Some of that price increase is due to restrictions on domestic mining imposed by China, the article said. Other reasons for the price spike included the interruption of coal production at two large Australian mines and heavy rains in a northeastern China province, which cut into production there, the Journal article noted.
However, U.S. coal exports to Asia fell 34% during the first half of 2016, to 7.45 million short tons this year compared to 11.4 million short tons for the first six months of 2015, according to data from the U.S. Energy Information Administration (EIA) (Washington, D.C.). Exports to Europe also declined by about 38% during the first six months of 2016, to about 13.2 million short tons from 21.3 million short tons for the comparable year-earlier period.
The EIA also said U.S. coal exports are fetching $15 to $20 less per short ton for the first half of 2016 compared to the first half of 2015. Export prices for the first half of 2016 are about half what they were for the comparable period in 2012.
There are numerous coal-fired power plants operating in Asia, and many more under development. But in April of this year, China announced as many as 200 planned coal-fired power projects may not be completed. Construction of some approved coal-fired generators may be pushed out until 2018, according to a report in The New York Times. The 200 or so planned projects that may not be completed have aggregate generating capacity of 105,000 megawatts (MW).
The Chinese government's April announcement may dim the outlook for the growth of coal-fired power in that country, but other Asian nations, including India, Indonesia, Turkey and Vietnam, still are actively developing billions of dollars of coal-fired power plants.
Another proposed Washington State coal-export terminal, the Gateway Pacific Coal Terminal at Cherry Point, was halted this summer after U.S. Army Corps of Engineers rejected the developer's application for an environmental permit. This project was being developed by SSA Marine (Seattle, Washington), a unit of Carrix Incorporated (Seattle, Washington). That project, valued at about $655 million, was scheduled to be built in phases. At full build-out, it would have been able to export up to 54 million tons of coal per year.
California
This summer, four Utah counties abandoned a plan to export their coal through a proposed terminal in Oakland, California, citing local opposition, including from Oakland's City Council. With their decision, those counties walked away from up to $53 million in Utah economic development funding. Shortly thereafter, California Governor Jerry Brown signed S.B. 1279, which prohibited the California Transportation Commission from funding new bulk-coal terminals in California. It takes effect in January 2017.
That coal-export project had a total investment value of about $250 million. It is part of a larger, $1.2 billion plan to redevelop an old Army base. At full build-out, the export terminal would be able to export up to 9.5 million tons per year of various non-coal commodities, such as potash limestone, salt and hay.
A spokesman for the Oakland project, the Oakland Bulk and Oversized Terminal (OBOT), told Industrial Info the company was "evaluating multiple options going forward and is not doing media for the time being."
Oregon
Lighthouse Resources, which was developing a proposed coal-export terminal at Boardman, Oregon, abandoned that project last month after lengthy delays in trying to secure environmental permits. The Morrow Pacific Coal Terminal project included several projects that had an overall value of about $162 million. All told, the terminal, which was scheduled to be built in phases, would have been able to export up to 8 million tons of coal per year.
Under development since 2011, the Morrow project was denied environmental permits by the U.S. Army Corps of Engineers (in 2016) and state of Oregon (in 2014). In its October announcement that it was abandoning that project, Lighthouse President and Chief Executive Everett King said his company started shipping Powder River Basin coal to Asia through the Westshore Terminals in Vancouver, British Columbia. "Though we are disappointed for our Morrow Pacific Project supporters, we are very excited to commence delivery of products to our customers."
"We are very excited to commence supplying our South Korean customers with the coal they've sought," King said October 13. "South Korea has one of the cleanest, most efficient coal-fired electrical generation fleets on the planet. Our ability to now ship to our customers in Asia allows us to achieve our short-term goals while we continue to focus on further long-term growth at Millennium. " Lighthouse purchased the Millennium Bulk Terminals project earlier this year.
A separate Oregon project, the Coos Bay Mainstay Coal Export Terminal, was cancelled in May 2013. That project, valued at $432 million, would have been able to export up to 10 million tons of coal per year.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
