{"id":72867,"date":"2017-01-08T23:42:05","date_gmt":"2017-01-09T06:42:05","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/plans-falter-for-west-coast-coal-terminals\/"},"modified":"2017-01-09T06:42:05","modified_gmt":"2017-01-09T06:42:05","slug":"plans-falter-for-west-coast-coal-terminals","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/plans-falter-for-west-coast-coal-terminals\/","title":{"rendered":"Plans falter for West Coast coal terminals"},"content":{"rendered":"\n

\"The
The former Oakland Army Base pier at the Port of Oakland in Oakland, California, where the plans for a bulk shipping terminal for coal and other commodities have stalled.<\/span>Eric Risberg\/The Associated Press<\/span><\/figcaption><\/figure>\n<\/p>

The Rev. Ken Chambers has lived in West Oakland for all of his 50 years and grappled with air pollution the entire time. The neighborhood, on the eastern shore of San Francisco Bay, is surrounded by three major highways, an active railroad, and the fifth-busiest port in the country. Chambers\u2019 four children showed symptoms of asthma, he says, a common condition among their neighbors. And although air quality has improved since then \u2013 thanks to new laws regulating emissions \u2013 the neighborhood\u2019s mostly black, low-income residents still suffer from asthma rates up to three times higher than other parts of Oakland.<\/p>\n

Last April, Chambers and his neighbors caught wind of a plan to redevelop the old Oakland Army Base, located along the waterfront in West Oakland, including a major new terminal for shipping coal to Asia. Proponents said that it would bolster the neighborhood\u2019s struggling economy, and that coal exports were a necessary component, because they would provide revenue to operate the terminal. Critics, however, including Chambers, argued that fugitive coal dust blowing from trains headed for the port would further deteriorate West Oakland\u2019s air quality, and that burning the coal overseas would exacerbate climate change.<\/p>\n

And then, in late July, opponents scored a major victory when the Oakland City Council voted to ban shipments of coal from the city, citing the \u201cfalse choice\u201d between jobs and the environment \u2013 and halting the multimillion-dollar coal export proposal in its tracks.<\/p>\n

The decision, which came after more than a year of feisty debate, placed Oakland at the center of a growing battle over the fate of the coal industry. Domestic demand for coal has collapsed in recent years, displaced by cheap natural gas, along with wind and solar power. As U.S. coal companies look to overseas markets for salvation, plans for the necessary West Coast export terminals have been blocked by local communities and environmental groups worried about climate change and human health and safety. Taken together, says Sierra Club attorney Jessica Loarie, the long-term market forces and growing public opposition \u201cdo not bode well for the coal industry.\u201d<\/p>\n

None of this bodes well, either, for places like Carbon County, Utah, which got its name from its vast seams of coal. This rugged landscape southeast of Salt Lake City was already heavily mined by the late 1880s. It entered Old West history in 1897, when legendary bank robber Butch Cassidy and his partner, William Ellsworth \u201cElzy\u201d Lay, stole the Pleasant Valley Coal Company\u2019s $8,000 payroll. Later, nearly 400 miners died in two underground explosions, in 1900 and 1924.<\/p>\n

Despite that early tumult, Carbon County grew to depend on coal. For most of the last century, coal supplied the vast majority of Utah\u2019s energy needs and attracted the attention of other states as well. In the early 1980s, a Southern California electrical utility cooperative helped persuade the state to build a massive power plant, the Intermountain Power Project, in western Utah, promising to buy its coal-generated electricity.<\/p>\n

But things changed as utilities increasingly switched to cheaper natural gas and renewables. In 2013, Los Angeles, which had a contract with IPP, voted to end its reliance on coal-fired electricity by 2025, in favor of natural gas. The decision stunned Carbon County, 75 to 80 percent of whose jobs depend on coal mining and power generation. Hundreds of locals have lost their jobs as coal-fired power plants have closed and mines have shuttered. \u201cIt put us into a tailspin,\u201d says County Commissioner Jae Potter. \u201cWhat do you do?\u201d<\/p>\n

That trend has rippled across the Interior West, from Colorado to Montana, amid plummeting U.S. demand for coal. After declaring bankruptcy, major firms like Arch Coal and Peabody Energy are downsizing \u2014 cutting jobs, closing unprofitable mines, and taking on less debt.<\/p>\n

In the early days of coal\u2019s decline, however, the industry still looked profitable to the private equity industry, which buys up troubled businesses, restructures them and sells them at a profit. Although the U.S. market was collapsing, Asia\u2019s demand for coal appeared insatiable. Private equity firms, such as Salt Lake City-based Lighthouse Resources, bought mines in Montana and Wyoming and began pushing export projects in Washington and Oregon. And in 2013, Galena Asset Management invested over $104 million in Bowie Resources, a Kentucky-based coal company, to create Bowie Resource Partners. Backed by more than $800 million in private equity money, Bowie went on a spending spree, buying three Utah mines owned by Arch Coal. The company later bought three more mines \u2014 two in New Mexico and one in Colorado from Peabody Energy, another coal giant on the verge of bankruptcy. In a press release, Galena CEO Jeremy Weir heralded the Bowie partnership\u2019s opportunity to \u201creshape the Western U.S. coal paradigm.\u201d<\/p>\n

In its financial documents, Bowie outlined plans to export its landlocked coal through West Coast ports. But it glossed over a major problem: The existing marine terminals in California and other West Coast states were too small to export the millions of tons of coal that its Utah mines could produce. A new larger terminal planned for West Oakland, however, could provide the opportunity Bowie needed.<\/p>\n

When the marine terminal proposal for West Oakland first surfaced in 2013, coal was not mentioned. Instead, the developer said the terminal would ship bulk goods like iron ore, corn, wind turbines and auto parts. Chambers, like many of his neighbors, supported the project, which would help replace some of the 7,000 blue-collar jobs lost when Oakland Army Base closed in 1999.<\/p>\n

Then, last April, a local Utah paper, the Richfield Reaper, broke a story that the developer had tried to keep under wraps: Four counties in Utah, where Bowie\u2019s coal mines were located, intended to invest in the proposed Oakland terminal, with the intent of shipping their coal out of it.<\/p>\n

The city\u2019s vote against coal stalled the plan, and other blows soon followed, including new legislation banning state funding for bulk-coal terminals. In the signing letter, Gov. Jerry Brown highlighted California\u2019s recent moves to replace coal with cleaner energy sources. \u201cThat\u2019s a positive trend we need to build on,\u201d he said, calling Oakland\u2019s ban an important step that other localities \u2013 and the state \u2013 should follow.<\/p>\n

By the end of August, things were looking even worse for the terminal: The four Utah counties where Bowie owns mines withdrew their application for the $53 million state loan to invest in the project, and Bowie canceled its IPO, citing poor market conditions.<\/p>\n

In early November, construction began on the first phase of the Army base redevelopment, but whether or not the bulk terminal will still be part of the project remains uncertain. The developer, California Capital & Investment Group, and its terminal operator, Terminal Logistics Solutions, declined to be interviewed for this story.<\/p>\n

One thing, however, is certain: The long-term economics of big export projects no longer appear as promising as they once did. Transporting coal by rail 1,500 miles from Utah to the West Coast is expensive, says Anna Zubets-Anderson, a senior analyst at Moody\u2019s Investor Service. Add the cost of shipping it to Asia, and it\u2019s tough for U.S. producers to compete with countries like India and Indonesia, which have much lower labor and transportation costs.<\/p>\n

International coal prices have spiked recently, but Zubets-Anderson says the uptick is temporary, largely due to the Chinese government\u2019s attempt to cut its own coal production and consumption. Heavy rain and flooding in other parts of Asia have also disrupted coal supplies. \u201cWhen those issues are resolved, prices will go back down \u2014 likely by the middle of 2017.\u201d<\/p>\n

Other West Coast cities are also following Oakland\u2019s lead. On Nov. 16, the Portland City Council voted 3-0 in favor of a resolution that would halt new fossil fuel infrastructure, such as export terminals, and expansions to existing facilities. A final vote is scheduled for Dec. 8.<\/p>\n

For the industry, this combination of grassroots resistance and political opposition is creating financial risks \u2014 like a \u201cone-two punch,\u201d says Clark Williams-Derry, an energy expert at the Sightline Institute, an environmental think tank. And the uncertainty makes big projects harder and harder to justify.<\/p>\n

Even President-elect Donald Trump\u2019s campaign pledge to revive the ailing U.S. coal industry and put miners back to work is unlikely to turn things around. Increasing anti-coal activism and cheaper natural gas are discouraging utilities from investing in coal, says Zubets-Anderson \u2014 not just in the U.S., but around the world. \u201cI don\u2019t foresee the new administration being able to change that,\u201d she says.<\/p>\n","protected":false},"excerpt":{"rendered":"

Industry looks to Asia; face port challenges<\/p>\n","protected":false},"author":1,"featured_media":72868,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[1424,120,121],"naviga_topic":[],"class_list":["post-72867","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-coal","tag-colorado","tag-utah"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/72867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=72867"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/72867\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/72868"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=72867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=72867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=72867"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=72867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}