Why are coal exporting terminals being considered?
Two factors are especially germane in answering this question. First, domestic coal consumption is decreasing. Diverse additional factors are, in turn, responsible for decreased coal consumption in the U.S., from increased environmental compliance costs for coal-fired electrical power generation to low natural gas prices. The figure below shows that, beginning in early 2015, electric generation from natural gas has consistently exceeded that from coal.
Conversely coal consumption abroad, particularly in Asian countries, is increasing. While Japan, South Korea, and Taiwan are currently Asia’s largest coal consumers, the Energy Information Administration’s International Energy Outlook 2011 projects that China and India will become Asia’s leading coal consumers by the year 2035 (see figure below). The increase in Chinese coal consumption by 2035 is especially noteworthy, but it is important to appreciate that the Energy Information Administration also projects that China will contribute two-thirds of the increase in world coal production between now and 2035. Thus, it appears that China will meet at least some of its increase in coal consumption with domestic production, thereby reducing its need to import coal.
The U.S. is currently a minor player in the world coal export market, as the figure below shows. While the Energy Information Administration forecasts that Australia will overtake Indonesia as the world’s leading coal exporter by 2035, it also projects that the U.S. share of world coal exports will remain small. Three factors could increase the size of this role:
- Most large coal exporters have expansion of coal mining and coal exporting terminal capacity planned, but railway transportation of coal from mine to terminal appears limiting in most cases. If transportation imposes a bottleneck for the world’s largest coal exporters, a larger role for the U.S. could emerge.
- The Panama Canal expansion, scheduled for completion in 2015, will accommodate larger vessels and thereby create potential for additional U.S. coal exports to Asia.
- West Coast coal exporting terminals could make Powder River basin coal cost-competitive with the world’s largest exporters by reducing transportation costs to Asian markets. This possibility is the focus of this webpage.
What / Where Are The Proposed West Coast Coal Exporting Terminals?
There is a total of 3 proposed coal exporting terminals in Washington and Oregon, down from 6 as recently as 2012.
Proposed coal exporting terminals in Washington include:
- Gateway Pacific Terminal:
- Located at Cherry Point near Bellingham
- Proposed capacity, 59.5M short tons/year (26.5M tons/year to be supplied by Peabody Coal)
- In May 2016, Army Corps of Engineers determined that the project would violate the Lummi Nation treaty rights and halted processing of the project application. State and local agencies simultaneously halted work on the project
- In June 2016, the Washington Department of Natural Resources denied an aquatic land lease application
- This project appears to be in jeopardy, given that the developer has withdrawn several local permit applications
- Millennium Bulk Terminals:
- Located on Columbia River near Longview
- Proposed capacity, 48.5 tons/year (primary supplier, Arch Coal)
- Proposed site is former location of aluminum smelter; site is contaminated, but is currently being remediated
- In April 2016, the Washington Department of Ecology released a study concerning the environmental impacts of this exporting terminal. It recommended that Millenium submit a revised plan for the terminal that would represent a 50% reduction in greenhouse gas emissions.
- In 2017, several local and state permits for this proposed terminal were denied. They included county denials of shoreline permits, as well as state-level denials of a water quality permit and a sub-lease for a dock. In all instances, Millenium has appealed the decisions; for the dock sub-lease, a local judge has required state-level reconsideration of its decision. Millenium has been granted one locally-determined permit for wetlands protection plan adequacy.
Proposed coal exporting terminal in Oregon is:
- Port of Morrow/Port of St. Helen’s:
- Coal would arrive at Port of Morrow (at Boardman) by train, be transferred to Port of St. Helen’s (at Clatskanie) by barge on Columbia River
- Proposed capacity, 9M tons/year
- In 2015, the Oregon Department of State Lands denied a permit application at the Port of Morrow. In addition, the Oregon Transportation Commission denied a request from the developer for $2 million in port improvement funds.
- In late 2016, the terminal developer announced that it was exiting the project. It will instead export Powder River Basin coal through Westshore Terminals in Vancouver, British Columbia.
How Are Coal Exporting Terminals Regulated?
Coal exporting terminals are primarily regulated by federal agencies. The following statutes are applicable:
- Rivers and Harbors Appropriation Act of 1899
- Clean Water Act of 1972 (§ 404; wetlands)
- National Environmental Policy Act of 1969
- Endangered Species Act of 1973
Rivers, harbors and wetlands are involved in the various proposed coal exporting terminal projects, making the Army Corps of Engineers the regulating agency; the Environmental Protection Agency has a secondary role for regulation evolving from the Clean Water Act of 1972. The requirement to follow the National Environmental Policy Act of 1969 has led to the Corps preparing individual environmental impact statements (EISs) for the Gateway Pacific Terminal and Port of Morrow/Port of St. Helen’s projects. Interestingly, several individuals and groups have called for a cumulative impacts EIS for all proposed projects, not individual projects, with all impacts considered. Consideration of all impacts is deemed necessary because transportation of coal to exporting terminals, as well as the combustion of coal in Asian countries, have environmental impacts in addition to those associated with coal exporting terminal construction and utilization.
In addition to the Corps and the Environmental Protection Agency, the Surface Transportation Board is a likely regulatory agency. The Board’s Office of Environmental Analysis is required to analyze environmental impacts of connecting track construction (needed for several of the proposed terminals) and of water carriers (in the case of the Port of Morrow/Port of St. Helen’s project).
State regulating agencies also have roles. The Oregon Department of Environmental Quality has reviewed an application and issued a permit for air quality for the Port of Morrow/Port of St. Helen’s project.
What Are The Potential Environmental Impacts?
While potential impacts to water, both its quality and as wildlife habitat, are the most obvious impacts of coal exporting terminal construction and operation, other impacts are possible. These potential impacts include those on air quality that are associated with transportation of coal by railway from the Powder River basin to the West Coast, as well as with combustion of coal in importing countries. Furthermore, climate change-linked events such as increased sea level, potentially associated with coal combustion, are environmental impacts of coal exporting terminals that some have suggested should be considered. Finally, impacts on railway, barge and vehicular traffic while not environmental in nature, are likely to be associated with coal exporting terminals.
Potential impacts on water quality are among those associated with coal exporting terminal construction and operation. In addition, altered water quality due to increased barge traffic, as would occur with the Port of Morrow/Port of St. Helen’s project, is also possible. Changes in water quality could, in turn, affect aquatic habitat. Estimates of 12 and 16 endangered species being impacted by the Gateway Pacific Terminal and Port of Morrow/Port of St. Helen’s projects, respectively, have been made.
Mitigation of such impacts is possible. The Clean Water Act of 1972 and the Endangered Species Act of 1973, both enforced via regulations promulgated and permits issued by the Army Corps of Engineers, are intended to preserve water quality and biological diversity. The Surface Transportation Board’s Office of Environmental Analysis is also likely to assume a role in mitigation of impacts of coal exporting terminals on water, given that it regulates water carrier traffic.
Coal will be transported from the Powder River basin of Montana and Wyoming to proposed West Coast coal exporting terminals by railway. Possible impacts on air quality include coal dust evolving from uncovered coal trains, as well as emissions resulting from diesel fuel combustion by coal train locomotives. Locomotive emissions include criteria air pollutants and air toxics such as benzene and could be significant. Total nitrogen oxides, for example, would be nearly 100,000 tons on an annual basis if proposed coal exporting capacities of West Coast terminals were fully used.
In addition to emissions in the U.S., it has been suggested that emissions from the combustion of coal in importing countries should also be considered. This proposition chiefly concerns carbon dioxide, emission of which may be associated with climate change-related effects such as increased sea level. Such an effect would impact West Coast communities. This notion has led, in turn, to the suggestion that a cumulative impacts scope for an environmental impact statement be utilized by the Army Corps of Engineers.
While not environmental in nature, other potential impacts of coal exporting terminals are on railway, barge and vehicular traffic. Impacts on railway traffic are of perhaps greatest concern. Western railway transportation of import/export intermodal container cargo and export grain cargo is currently significant and could be affected by increased transportation of coal by railway. Key potential bottlenecks include Billings, Montana and Spokane, Washington, as identified in a recent report by the Western Organization of Resource Councils. Click here for report. Increased railway traffic would, in turn, impact vehicular traffic and could have serious consequences for emergency vehicles. Water traffic would also increase as a result of the Port of Morrow/Port of St. Helen’s project; indeed, a nearly-50% increase in barge traffic is projected at the Bonneville Dam. This increased barge traffic could impact barging of other commodities such as grain, as well as recreational activities on the water.
WIEB Briefing Paper
Links to other groups
The following websites represent a sampling of additional information available on coal ports: