Coal export company promises $400M in economic impact
By Erik Siemers
A worker from Vigor Industrial works on the hull of a barge. Plans for a coal export facility would use barges to bring coal up the Columbia River and promise $400 million in economic impact.
Nowhere is the economic potential of exporting coal along the Columbia River more apparent than at Tidewater Barge Lines Inc.
The Vancouver, Wash.-based barge and tugboat operator is hoping to land a lucrative contract serving Australia coal firm Ambre Energy’s proposed $250 million Morrow Pacific coal export project.
It would ship coal on covered barges from the Port of Morrow near Boardman 190 miles down the Columbia River to a dock at the Port of St. Helens where it will be transferred to Asia-bound ocean carriers.
“It’s the biggest (potential) project we’ve looked at in our history,” said Dennis McVicker, CEO of 80-year-old Tidewater, which would use its tugs to guide coal-filled barges back and forth between the two ports. “If we’re selected to do this work, we’re going to be building four or five new boats at maybe $10 million to $11 million per boat.”
And that’s just for the project’s first phase.
Despite the economic potential, the project — and two others like it along the Columbia River — are facing a tidal wave of opposition questioning the wisdom of embracing a dirty fossil fuel some fear could bring congestion and pollution to communities in its path. Several hundred protestors flooded downtown Portland’s Pioneer Courthouse Square on Monday in opposition of coal exports.
Yet the opportunity for local manufacturers and service providers looking to play a role in the projects’ development is too big of a carrot to pass up.
Tidewater, with 235 employees, could add close to 100 more employees should it land the contract. Already,Ambre has opened bids to Portland manufacturers Vigor Industrial and Gunderson LLC on a $70 million contract to make 20 new barges.
Ambre will release Thursday a study from economic forecasting firm ECONorthwest showing Morrow Pacific — which hopes to begin construction late this year — could bring nearly $400 million worth of economic impact to 11 counties in northwest Oregon and southwest Washington.
It would bring another $300 million in economic activity once it begins operating at full capacity, delivering 8.8 million tons of coal per year from the Powder River Basin in Montana and Wyoming to Asian markets.
And it would create more than 2,100 jobs — directly and through trickle-down economic effects — during the project’s development, with another 1,100 to come once operating, according to the ECONorthwest report.
Ambre is seeking a permit from the U.S. Army Corps of Engineers that would allow it to build a dock structure on the river at the Port of Morrow. The first public comment period on the application ended last weekend. Ambre is expected to turn in a 500-page environmental assessment required by the Corps sometime in June.
A similar back-and-forth with the Corps, including another public comment period, will follow. If everything goes the company’s way, Ambre hopes to begin construction by December and start taking coal delivery by mid- to late-2013.
The biggest immediate beneficiaries are likely to be local manufacturers that would help design and fabricate the structures and barges that would make the system work.
Clark Moseley, CEO of the Morrow Pacific project, said the work could start funneling to the region quickly.
“A lot of these construction jobs could conceivably start in the next two or three months,” Moseley said. “That would be local jobs.”
Normally the notion of quick and abundant job growth would be viewed as an economic development dream come true. But in the clean-energy friendly Pacific Northwest, coal is often portrayed as an unwanted interloper that promises short-term economic gain in exchange for long-term environmental chaos.
Locally, criticism has focused heavily on the increased rail traffic and potential of coal dust pollution from the proposed developments. Portland General Electric Co. last week said it wouldn’t sublease land at the Port of St. Helens for pipeline operator Kinder Morgan’s proposed coal export facility out of concerns over coal dust interfering with its power plants.
“Coal is crime,” Robert F. Kennedy Jr., a noted environmental attorney and coal opponent, said at the downtown Portland rally Monday. “The moment (coal companies) disclose an honest and true environmental impact statement they will be laughed out of town.”
KC Golden, policy director for Climate Solutions, a Seattle-based environmental policy institute, acknowledges that economic figures like the ones produced by ECONorthwest become difficult to combat in economically challenged communities.
But he said the bigger picture issues can’t be avoided. By creating a pathway to access the Powder River Basin’s cheap coal, the region is making it easier for developing nations such as China and India to choose fossil fuel energy sources over cleaner alternatives.
Climate Solutions supports Oregon Gov. John Kitzhaber’s request, made last month, that the federal government — including the U.S. Army Corps of Engineers — take on a thorough environmental impact review of the coal export proposals.
“What we’re primarily asking is for people to see that these (proposals) will have huge environmental, economic and social impact going forward,” said Ross Macfarlane, a senior adviser for business partnerships with Climate Solutions.
Meanwhile, the Morrow Pacific project continues to proceed.
Moseley said it’s likely that Vigor and Gunderson, a division of Lake Oswego-based The Greenbrier Cos. Inc., would share some of the barge-making work. That includes another $56 million worth of barges in the project’s second phase and as much as $20 million worth of work building the structure for a water-borne facility at the Port of St. Helens to transfer coal from barges to ocean carriers.
Vigor Industrial employs 2,200, including 700 in Portland. Considering it takes between 120 and 150 people to build a barge, Vigor Vice President Alan Sprott said the company would add 200 more jobs should it land the Morrow Pacific work.
“This type of work slots right in with exactly what we want to do in our business plan,” Sprott said. “We have the capacity to build and we’d certainly be aggressive in going after the work.”
The value of a potential Tidewater contract isn’t as clear, though the ECONorthwest report estimates the cost of towing the barges up and down the Columbia at just under $29 million annually.
Tidewater employs 235, including 125 who work directly on its fleet of 16 boats that help guide the transport of grain, petroleum and cargo containers through the Columbia River channel.
Coal would be another cyclical commodity that would add diversity to the privately held company’s portfolio, McVicker said.
The work would require adding another 45 people to operate boats in the project’s first phase, 45 more in the second phase, in addition to five to 10 people in maintenance and administration, McVicker said.
“We’re going to be looking at probably a 10-year contract,” McVicker said. “We’re certainly hoping it goes longer than that.”
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