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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Longview Columbia River Coal Terminal, proposed to be built in southwest Washington State, has generated "a lot of noise," mostly from opponents, but polling reveals that "the public wants this project, and the unions want this project," David Carlile, vice president of marketing for project developer Ambre Energy North America Incorporated (Salt Lake City, Utah), told a Metals & Minerals Industry conference in Denver last week.
Carlile was not ready to predict victory for the proposed coal-export terminal, which is 62% owned by Ambre Energy (Brisbane, Australia) and 38% owned by Arch Coal Incorporated (NYSE:ACI) (St. Louis, Missouri). The project also is referred to as Millennium Bulk Terminals. But Carlile and a former executive associated with that project agreed there was broad support for the $600 million coal-export terminal. The former executive, who requested anonymity, said polling showed the public supported the project by a 2-to-1 margin.
"The opposition is passionate and well-funded," the executive told Industrial Info on February 17 at the annual meeting of the Colorado Mining Association (CMA) (Lakewood, Colorado). "We lose on the passion meter."
Because environmental regulations are expected to sharply reduce the amount of coal burned in the U.S. in the coming years, coal companies have sought to increase exports. But plans to build new coal export terminals have been opposed by a variety of stakeholders, including environmental organizations. For more on the controversy over proposed coal export terminals in the Pacific Northwest, see June 4, 2013, article - Coal Export Group Fights to Save Three Proposed Export Terminals.
Federal and state environmental impact statements (EISs) are being prepared for the Millennium terminal. The EISs are expected to be completed in the fourth quarter. When they are complete, regulators in Washington State again will take public comment on the project.
Ambre Energy and its allies are working to build public support for the project. Carlile encouraged attendees to support the terminal by making public comments when the public-comment period opens later this year, and by becoming a project supporter at three industry websites: the Alliance for Northwest Jobs & Exports, Friends of Coal West and Count on Coal.
"We're expecting a lot of opposition from environmentalists, but we'll work through the process," he said. In an earlier round of open houses for the project, opponents reportedly outnumbered supporters in significant numbers.
Carlile outlined the benefits of building the Millennium project:
Phase II would add another 19 million tons of annual export capacity, at a cost of about $200 million. Phase II construction is scheduled to kick off in early 2019 and be completed in late 2021. The terminal is scheduled to be built on the site of an abandoned aluminum smelter.
"This is a market-led project," Carlile told the CMA attendees on February 17. "There is tremendous draw (for the coal) from the Far East. The West Coast of the U.S. is well-suited to supply Asian demand."
Roughly 52% of Asia's energy came from coal in 2013, Carlile noted, citing data from BP plc's (NYSE:BP) (London, England) Statistical Review of World Energy. The region's demand for coal is projected to rise in the coming years. In Japan, coal for electric generation costs about $4 to $5 per million British thermal units (MMBtu), far less than generating electricity from liquefied natural gas (LNG), he said. Despite its recent sharp drop, to about $10 per MMBtu from $16 per MMBtu, electricity from LNG is still roughly twice as costly as electricity generated from coal.
The Ambre Energy executive said China is projected to increase its imports of coal by about 100 million tons per year, to about 325 million tons, by 2020. India's annual imports will rise by an estimated 66 million tons, to 194 million tons, by that year. Japan's demand is expected to rise as well.
But the U.S. is expected to face stiff competition in the race to supply expanding global coal markets. Compared to 2013 export levels, Indonesia is expected to increase coal exports by 133 million tons per year by 2020. Australian coal exports are predicted to grow by 29 million tons per year by then as well.
Compared to Indonesia and Australia, Carlile noted that the U.S. is a relatively small exporter of thermal coal. But the global market for coal imports is projected to grow over the next five years, and coal from the Western U.S. has advantages over some of its competitors. For example, he said, Indonesian coal has a far lower BTU value and much higher ash content than coal mined from the Powder River Basin in Wyoming and Montana.
"Companies burning Indonesian coal would have to burn twice as much to generate the same amount of electricity as Western coal," he said. Burning Indonesian coal would release far higher amounts of carbon dioxide (CO2) into the air compared to burning Western low-sulfur coal, he added.
Those opposing the Millennium project are focusing on the potential for coal dust to escape from railcars and foul the air, land and water as the trains move across the Northwest. But coal dust "is not an insurmountable issue," the former terminal executive told Industrial Info. "Four coal trains per day have been moving through southwest Washington for 30 years, and nobody noticed."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three 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.
Carlile was not ready to predict victory for the proposed coal-export terminal, which is 62% owned by Ambre Energy (Brisbane, Australia) and 38% owned by Arch Coal Incorporated (NYSE:ACI) (St. Louis, Missouri). The project also is referred to as Millennium Bulk Terminals. But Carlile and a former executive associated with that project agreed there was broad support for the $600 million coal-export terminal. The former executive, who requested anonymity, said polling showed the public supported the project by a 2-to-1 margin.
"The opposition is passionate and well-funded," the executive told Industrial Info on February 17 at the annual meeting of the Colorado Mining Association (CMA) (Lakewood, Colorado). "We lose on the passion meter."
Because environmental regulations are expected to sharply reduce the amount of coal burned in the U.S. in the coming years, coal companies have sought to increase exports. But plans to build new coal export terminals have been opposed by a variety of stakeholders, including environmental organizations. For more on the controversy over proposed coal export terminals in the Pacific Northwest, see June 4, 2013, article - Coal Export Group Fights to Save Three Proposed Export Terminals.
Federal and state environmental impact statements (EISs) are being prepared for the Millennium terminal. The EISs are expected to be completed in the fourth quarter. When they are complete, regulators in Washington State again will take public comment on the project.
Ambre Energy and its allies are working to build public support for the project. Carlile encouraged attendees to support the terminal by making public comments when the public-comment period opens later this year, and by becoming a project supporter at three industry websites: the Alliance for Northwest Jobs & Exports, Friends of Coal West and Count on Coal.
"We're expecting a lot of opposition from environmentalists, but we'll work through the process," he said. In an earlier round of open houses for the project, opponents reportedly outnumbered supporters in significant numbers.
Carlile outlined the benefits of building the Millennium project:
- An increase in U.S. exports of $2 billion to $5 billion per year
- From a balance-of-trade perspective, the value of those exports can help offset the value of automobiles imported from Asia
- Important trading partners like Japan and South Korea will be supplied with cleaner coal for their power plants
- An economically disadvantaged area will experience job creation
- A 70-year-old aluminum smelter site will be cleaned up and revitalized
Phase II would add another 19 million tons of annual export capacity, at a cost of about $200 million. Phase II construction is scheduled to kick off in early 2019 and be completed in late 2021. The terminal is scheduled to be built on the site of an abandoned aluminum smelter.
"This is a market-led project," Carlile told the CMA attendees on February 17. "There is tremendous draw (for the coal) from the Far East. The West Coast of the U.S. is well-suited to supply Asian demand."
Roughly 52% of Asia's energy came from coal in 2013, Carlile noted, citing data from BP plc's (NYSE:BP) (London, England) Statistical Review of World Energy. The region's demand for coal is projected to rise in the coming years. In Japan, coal for electric generation costs about $4 to $5 per million British thermal units (MMBtu), far less than generating electricity from liquefied natural gas (LNG), he said. Despite its recent sharp drop, to about $10 per MMBtu from $16 per MMBtu, electricity from LNG is still roughly twice as costly as electricity generated from coal.
The Ambre Energy executive said China is projected to increase its imports of coal by about 100 million tons per year, to about 325 million tons, by 2020. India's annual imports will rise by an estimated 66 million tons, to 194 million tons, by that year. Japan's demand is expected to rise as well.
But the U.S. is expected to face stiff competition in the race to supply expanding global coal markets. Compared to 2013 export levels, Indonesia is expected to increase coal exports by 133 million tons per year by 2020. Australian coal exports are predicted to grow by 29 million tons per year by then as well.
Compared to Indonesia and Australia, Carlile noted that the U.S. is a relatively small exporter of thermal coal. But the global market for coal imports is projected to grow over the next five years, and coal from the Western U.S. has advantages over some of its competitors. For example, he said, Indonesian coal has a far lower BTU value and much higher ash content than coal mined from the Powder River Basin in Wyoming and Montana.
"Companies burning Indonesian coal would have to burn twice as much to generate the same amount of electricity as Western coal," he said. Burning Indonesian coal would release far higher amounts of carbon dioxide (CO2) into the air compared to burning Western low-sulfur coal, he added.
Those opposing the Millennium project are focusing on the potential for coal dust to escape from railcars and foul the air, land and water as the trains move across the Northwest. But coal dust "is not an insurmountable issue," the former terminal executive told Industrial Info. "Four coal trains per day have been moving through southwest Washington for 30 years, and nobody noticed."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three 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.
