NW coal debate centers on jobs, the future of energy
By Erik Siemers
The Port of St. Helens is one proposed site for a coal terminal that would take coal in from rail cars and load it on to ocean-going vessels.
A trio of coal export operations totaling nearly $1 billion in investment is under proposal along the shores of the Columbia River.
Each is vying to become the nation’s first West Coast-based coal export terminal, promising jobs and economic growth to communities that sorely need it.
But as officials representing the project developers — principally Australian coal firm Ambre Energy and Houston-based pipeline and terminal operator Kinder Morgan — conduct public outreach in coming weeks, they’re expected to come under intense scrutiny.
Many public officials and environmental groups are staunchly opposed to the notion of more coal crossing into Oregon.
“Gov. (John) Kitzhaber is concerned about a range of unanswered questions about the impact of coal exports on consumers, infrastructure and the environment that should be addressed in a comprehensive way by the federal government before proceeding,” Tim Raphael, a spokesman for the Oregon governor, said in a prepared statement. “The governor is exploring his options to engage and will ensure that any project obeys all state and federal laws to protect public health and the environment.”
Projects are distinct
All three projects have distinctions that set them apart:
• Millennium Bulk Terminals-Longview — an entity owned 62 percent by Ambre Energy’s U.S. division, and 38 percent by St. Louis-based coal firm Arch Coal Inc. — would invest $600 million to turn a former Alcoa smelter near Longview, Wash., into a private coal export terminal with initial capacity of 25 million metric tons. The project would create 300 full-time jobs and another 2,750 in construction and other indirect positions over two years.
• In an unrelated effort, Ambre would invest $159 million in the “Morrow Pacific Project,” an operation that would transport coal by rail to the Port of Morrow near Boardman and transfer it to covered barges. The barges would then ship the coal down the Columbia River to a new $40 million enclosed transloading barge at the Port of St. Helens. That facility would transfer the coal to an ocean vessel.
The project would create 105 new jobs — 25 each in Morrow and Columbia counties, and another 55 jobs for transport companies.
• Kinder Morgan would invest between $150 million and $200 million to build a state-of-the-art coal storage and export facility at the Port of St. Helens’ Port Westward Industrial Park. Coal would come by rail and be transferred to ocean-going vessels. The project would create 80 full-time jobs.
The Port of St. Helens has granted option agreements for the two projects in its district, giving them the green light to conduct due diligence work.
Both Ambre Energy projects have filed initial permits.
Officials representing the Longview project will take part in public meetings in May and June ahead of a Cowlitz County ruling on a shoreline development permit sometime this summer.
Kinder Morgan spokesman Allen Fore said the company won’t begin filing applications for the required permits until the end of the year. But it still plans on conducting a public due diligence process that includes meeting with city councils in Rainier, Scappoose, Columbia City and St. Helens starting in late April, followed by a series of open houses in those communities.
Big debate ahead
The public discourse from proponents of the three projects will have some unifying themes.
The U.S. has 28 percent of global coal reserves, but just nine export terminals — all on the East Coast. The only West Coast options are three terminals in British Columbia, but producers in the coal-rich Powder River Basin of Montana and Wyoming are thirsty for a new path to meet demand from developing nations like China.
All have pledged to do everything they can to mitigate public concerns, whether they be environmental or economic in nature.
They also point out that these projects are far from a novelty. Kinder Morgan already operates coal export facilities in Virginia, South Carolina and Louisiana.
“What we’re proposing is not something we don’t already do,” said Fore. “We’re not reinventing the wheel. It’s just a location.”
But location is everything to the projects’ opponents, who question whether the promise of immediate job growth in local communities outweighs the risk of betting on a bulk commodity viewed not only as dirty, but is perceived by some as having a limited future.
Beyond the traditional environmental concerns associated with coal and issues about the increased rail traffic these projects may cause, opponents question whether the market for coal is as robust as advertised.
U.S. coal consumption fell nearly 5 percent last year to just over 1 billion short tons, according to data from U.S. Energy Information Administration. It’s expected to fall another 4 percent this year to 962 million tons.
Knowing that, opponents contend the export plans are little more than a survival mechanism for a dying industry.
“The whole coal-powered utility business in the U.S. is rapidly declining,” said Ross Macfarlane, senior advisor for business partnerships for Seattle-based environmental policy group Climate Solutions. “The coal companies’ desire to follow a tobacco industry strategy of having export markets pick-up where they have dwindling domestic markets leaving off will face significant issues.”
It’s also a tricky political issue for Oregon, a state that’s invested heavily in its position as a thought leader in clean energy policy and production. In that sense, coal is a four-letter word of a different kind.
“Oregon has a very strong brand, a very strong reputation as an innovative state, as a place where there’s clean water, clean technology, clean energy,” said Brett VandenHeuvel, executive director of Columbia Riverkeeper, a Hood River-based environmental advocacy group. “Hitching our wagons to sending coal to China is exactly the opposite direction we want to go.”
Proponents focus on jobs
Stuck in the middle of this debate are public officials such as Pat Trapp, the executive director of the Port of St. Helens, who views the two coal projects proposed there as providers of much needed jobs for an economically depressed community.
“It’s a project that will bring significant jobs to Columbia County,” Trapp said. “Unlike some of our neighboring counties, given our population, each of those jobs multiplied by dozens have an exponential effect to our county, which is struggling to say the least.”
The Kinder Morgan project, for example, would pay workers an average salary of $90,000 per year, bringing a total annual payroll of $13.6 million to Columbia County. Its lease agreement is projected to generate between $2.5 million and $5 million per year in revenue to the Port of St. Helens, and another $3.7 million in property taxes.
The Ambre Energy project in Oregon would produce $2.7 million in payroll, $850,000 in annual port fees and $750,000 in annual property taxes in both Morrow and Columbia counties.
Brian Gard, head of Portland-based public relations firm Gard Communications, which is working with Ambre on the Morrow Pacific Project, said bringing 25 jobs to Morrow and Columbia counties may not seem like much. But as an average of the overall population they’d be the equivalent of 1,000 new jobs in the far more populous Multnomah County.
“If you look at the jobs we’re talking about, from a Portland perspective, they may not look impressive,” Gard said. “Twenty-five jobs are a big deal in those counties.”
The project developers also speak with an inevitability that coal will find its way from the Powder River Basin to Asia regardless. The issue is whether local communities want to reap the benefits, as questionable as some believe they may be.
“The market for exporting coal is very significant,” Kinder Morgan’s Fore said. “The product will get to market. The question, is will it go through Port Westward?”
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