Thursday , September 06, 2012 - 12:20 PM
Coal train anxiety rippled down the tracks when proposals for six new export terminals in Washington, Oregon and British Columbia were advanced that would load ships headed for Asia.
A new coal-fired power plant comes on-line about once a week in China.
Cloud Peak Energy, which operates the Spring Creek Mine near Decker, Mont., as well as the Antelope and Cordero Rojo mines near Gillette, estimates coal-generation capacity in India and China will increase 58 percent to 439 gigawatts by 2035. (A gigawatt equals 1,000 megawatts.)
Montana and Wyoming, with some of the largest coal reserves in the world, want to be players in that market.
"Those terminals are going to be key to the Montana coal industry," said Todd O’Hair, senior manager for government affairs at Cloud Peak. "It’s a small window of opportunity. It’s been 30 years since we’ve had this kind of opportunity to increase coal production."
As domestic markets for Powder River Basin coal shrink, China is driving the market, he said. In 2011, China imported 100 million tons of coal from Indonesia, Australia and South Africa, and he expects demand to grow.
Small amounts of Powder River Basin coal are now shipped from a Canadian port. O’Hair said Cloud Peak sold 5 million tons to South Korea last year.
Whether Montana and Wyoming can grab a larger piece of the action depends on construction of new terminals. No one expects all six to be built. Just two are in the initial stages of pursuing permits - Gateway Pacific Terminal at Cherry Point near Bellingham, Wash., and Millennium Bulk Terminal at Longview, Wash.
One potential contender, Grays Harbor at Hoquiam, Wash., dropped its plans in August.
No U.S. Pacific Coast ports ship coal now. Coal is exported through three Canadian facilities.
If it can get all necessary approvals, Gateway Pacific Terminal could export between 25 million and 54 million metric tons of coal each year, making it the largest coal port on the Pacific coast. (A metric ton equals 1,000 kilograms, or about 2,204 pounds.) Millennium Bulk Terminal could handle 25 million metric tons in its first phase and a total of 44 million tons, if a second phase is completed.
Before anything can happen, there are major hurdles to overcome, including permits from local, state and federal agencies.
Most daunting is gaining authorization from the U.S. Army Corps of Engineers. The process includes an environmental impact statement.
That’s where the current coal train controversy arises. To get coal to the terminals from the Powder River Basin, coal trains will travel more than 1,000 miles through hundreds of communities scattered in Wyoming, Montana, Idaho and Washington.
Many of them - more the farther west you go - want the Corps of Engineers to extend the environmental impact statement to study effects not just at the ports, but the impacts of increasing train traffic all the way back to the mines.
The railroads, which oppose extending the environmental impact statement beyond the ports, have a legion of powerful allies, including the coal-mining companies, labor unions and public officials eager to tap new sources of tax revenue.
Those who want to expand the environmental impact statement are "quite frankly trying to stop coal," Cloud Peak’s O’Hair said. The result, he said, would be "death by a thousand lawyers."
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