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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--A large and growing market for thermal coal exists in Asia. Huge reserves of low-sulfur sub-bituminous coal exist in the Powder River Basin (PRB) in Montana and Wyoming. Plans valued at about $2 billion have been developed to export PRB coal through several new terminals in the Pacific Northwest. But cities and environmental groups are opposing those export plans for local and global reasons.
Last week's elections, both at the national level and in Washington State and Oregon, didn't do anything to fundamentally change the dynamics surrounding coal export plans. Supporting the export plans is a recently formed coalition of more than 40 coal companies, railroads, transportation firms, project developers, unions and business associations. These firms are members of the Alliance for Northwest Jobs & Exports (Seattle, Washington), whose slogan is, "Build terminals here. Build jobs here."
Those who support the export terminals stress the jobs and tax revenue that would be created during the construction and operation of the facilities. Keith Tymchuk, mayor of Reedsport, Oregon, urged the Eugene, Oregon, city council to support a planned export terminal, to be constructed in Coos Bay, Oregon. Oregon's coastal economy has not recovered from the downturn in the timber industry that began in the 1980s, he said, adding that the "great recession is cutting us to the bone. We need family wage jobs."
Opponents include Seattle Mayor Mike McGinn, who has vowed to organize opposition among other local elected officials. McGinn and a variety of environmental groups oppose the export plans on two grounds. Locally, coal exports mean more coal trains moving across Oregon and Washington, which creates more noise and additional traffic disruptions, while increasing the amount of coal dust in the air and water. Globally, these officials oppose coal exports because they will lead to increased concentrations of carbon dioxide in the atmosphere, accelerating global climate change.
"We need to be looking at the environmental impact of coal pollution," McGinn told The Seattle Times recently. "Even if it is burned in China, it has an impact here."
In the Portland area, Jeff Cogen, chairman of the Multnomah County Commission, has directed the county health department to review potential health hazards from coal trains that may run through the county en route to the proposed Northwest export terminals. Cogen's request focuses on diesel emissions from locomotives and coal dust from uncovered coal cars.
The Oregonian newspaper quoted Cogen as saying, "There's been a lot of talk about this on regional, state and national level, but I think it's time for the local level to step up so we can understand how concerned we should be." Cogen also heads the Multnomah County board of health.
Over the next few years, these coal-export terminal projects are scheduled to kick off in Washington State and Oregon:
One such executive is Matthew Rose, chairman and chief executive at BNSF Railway Company (Fort Worth, Texas), a unit of Berkshire Hathaway Incorporated (NYSE:BRK-A) (Omaha, Nebraska). He recently met with reporters and elected officials across Washington State. "We owe you as a community more information," Rose told Washington's Columbian newspaper as he discussed his barnstorming across the state. In late August, Rose visited Spokane, Vancouver, Bellingham and Seattle to advocate for the terminals.
Noting that one proposed terminal already has been shelved, Rose said he doesn't expect all of the remaining proposed terminals to be built. "The market will sort that out," he told the paper, adding his view that two, possibly three, terminals would move forward. If so, that would put the total amount of potential coal exports from the Pacific Northwest at roughly 50 million to 100 million tons annually, he projected, down significantly with projections from some that exports could top 150 million tons each year. Fewer terminals and lower levels of exports would necessarily mean less train traffic, fewer traffic interruptions, and less coal dust in the air and water.
Despite stirrings of opposition in Oregon and Washington, there appears to be little that state or local governments can do legally to stop proposals to increase rail transport of coal. Railroads are regulated by a federal agency, the Surface Transportation Board, which has said state and local governments cannot enact laws which would significantly interfere with railroad operations, such as prohibiting the movement of trains on an existing rail line.
But the proposed coal export terminals will need to pass environmental muster with the U.S. Army Corps of Engineers, which is reviewing applications for several coal export terminal projects in the region. Some of the larger projects will get a full-blown environmental impact statement (EIS), which could take several years to complete. But smaller projects may only be subject to an environmental assessment, which typically takes months, not years, to conduct. To obtain greater regulatory and policy clarity, Oregon Governor John Kitzhaber has called on the federal government to do a comprehensive environmental impact study on coal exports before any project moves forward.
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 week's elections, both at the national level and in Washington State and Oregon, didn't do anything to fundamentally change the dynamics surrounding coal export plans. Supporting the export plans is a recently formed coalition of more than 40 coal companies, railroads, transportation firms, project developers, unions and business associations. These firms are members of the Alliance for Northwest Jobs & Exports (Seattle, Washington), whose slogan is, "Build terminals here. Build jobs here."
Those who support the export terminals stress the jobs and tax revenue that would be created during the construction and operation of the facilities. Keith Tymchuk, mayor of Reedsport, Oregon, urged the Eugene, Oregon, city council to support a planned export terminal, to be constructed in Coos Bay, Oregon. Oregon's coastal economy has not recovered from the downturn in the timber industry that began in the 1980s, he said, adding that the "great recession is cutting us to the bone. We need family wage jobs."
Opponents include Seattle Mayor Mike McGinn, who has vowed to organize opposition among other local elected officials. McGinn and a variety of environmental groups oppose the export plans on two grounds. Locally, coal exports mean more coal trains moving across Oregon and Washington, which creates more noise and additional traffic disruptions, while increasing the amount of coal dust in the air and water. Globally, these officials oppose coal exports because they will lead to increased concentrations of carbon dioxide in the atmosphere, accelerating global climate change.
"We need to be looking at the environmental impact of coal pollution," McGinn told The Seattle Times recently. "Even if it is burned in China, it has an impact here."
In the Portland area, Jeff Cogen, chairman of the Multnomah County Commission, has directed the county health department to review potential health hazards from coal trains that may run through the county en route to the proposed Northwest export terminals. Cogen's request focuses on diesel emissions from locomotives and coal dust from uncovered coal cars.
The Oregonian newspaper quoted Cogen as saying, "There's been a lot of talk about this on regional, state and national level, but I think it's time for the local level to step up so we can understand how concerned we should be." Cogen also heads the Multnomah County board of health.
Over the next few years, these coal-export terminal projects are scheduled to kick off in Washington State and Oregon:
- Gateway Pacific Terminal at Cherry Point, Ferndale, Washington. Owned by SSA Marine (Seattle, Washington), a subsidiary of Carrix Incorporated (Seattle, Washington), this project has a total investment value (TIV) of about $655 million. It is scheduled to break ground in mid-2013 and be operating by late 2015.
- Longview Columbia River Coal Terminal, Longview, Washington, is a two-phase project owned by Ambre Energy Limited (Brisbane, Australia). Phase I, with a TIV of about $400 million, is scheduled to kick off in late 2014 and come online in late 2015. Phase II, valued at approximately $200 million, is scheduled to kick off construction in early 2016 and begin operating in late 2018.
- Project Mainstay, located in the Port of Coos Bay, Oregon, is scheduled to kick off late next year and come online in late 2014. The project, with a TIV of $200 million, is being developed by the Oregon International Port of Coos Bay (Coos Bay,).
- The Morrow Pacific Project includes several projects that have an overall value of about $250 million. Located in Clatskanie, Oregon, Phase I of this project plans to begin construction in mid-2014 and become operational by late 2016. Construction of Phase II is scheduled to begin by mid-2016 and be completed by mid-2018. This project also is being developed by Ambre Energy Limited.
One such executive is Matthew Rose, chairman and chief executive at BNSF Railway Company (Fort Worth, Texas), a unit of Berkshire Hathaway Incorporated (NYSE:BRK-A) (Omaha, Nebraska). He recently met with reporters and elected officials across Washington State. "We owe you as a community more information," Rose told Washington's Columbian newspaper as he discussed his barnstorming across the state. In late August, Rose visited Spokane, Vancouver, Bellingham and Seattle to advocate for the terminals.
Noting that one proposed terminal already has been shelved, Rose said he doesn't expect all of the remaining proposed terminals to be built. "The market will sort that out," he told the paper, adding his view that two, possibly three, terminals would move forward. If so, that would put the total amount of potential coal exports from the Pacific Northwest at roughly 50 million to 100 million tons annually, he projected, down significantly with projections from some that exports could top 150 million tons each year. Fewer terminals and lower levels of exports would necessarily mean less train traffic, fewer traffic interruptions, and less coal dust in the air and water.
Despite stirrings of opposition in Oregon and Washington, there appears to be little that state or local governments can do legally to stop proposals to increase rail transport of coal. Railroads are regulated by a federal agency, the Surface Transportation Board, which has said state and local governments cannot enact laws which would significantly interfere with railroad operations, such as prohibiting the movement of trains on an existing rail line.
But the proposed coal export terminals will need to pass environmental muster with the U.S. Army Corps of Engineers, which is reviewing applications for several coal export terminal projects in the region. Some of the larger projects will get a full-blown environmental impact statement (EIS), which could take several years to complete. But smaller projects may only be subject to an environmental assessment, which typically takes months, not years, to conduct. To obtain greater regulatory and policy clarity, Oregon Governor John Kitzhaber has called on the federal government to do a comprehensive environmental impact study on coal exports before any project moves forward.
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
