‘Major milestone’ for export terminal permitting

E&E News, Dylan Brown, April 29th, 2016

A proposal to build a large coal export terminal in Washington state took a step forward today despite the misfortunes of its chief commodity.

The Washington Department of Ecology and Cowlitz County released the draft environmental impact statement for the proposed Millennium Bulk Terminals port project. The document comes more than four years after backers filed permit applications for the $680 million project near the mouth of the Columbia River in Longview, Wash.

Millennium, proposed to be built on 190 acres of a current industrial site, would have the capacity to ship 44 million metric tons of coal every year from across the western United States to Asia.

The draft EIS advances despite a critical partner, Arch Coal Inc., filing for bankruptcy earlier this year. Arch planned to export 20 million metric tons of coal from the Otter Creek strip mine in Montana through Millennium, but it recently abandoned that effort (Greenwire, April 26).

The bleak outlook for global coal markets, however, has not shaken the commitments of Arch and Lighthouse Resources Inc., Millennium’s majority shareholder, to develop the terminal, said Millennium Bulk Terminals CEO Bill Chapman, who hailed the draft EIS.

“This major milestone moves us one step closer to creating family-wage jobs in Longview, while meeting Washington’s strict environmental standards,” he said.

Proponents have touted the proposed terminal’s estimated economic impact — 2,650 direct and indirect jobs, and $5.4 million in annual state and local tax revenue.

Alliance for Northwest Jobs & Exports spokeswoman Kathryn Stenger noted Millenium’s investment in cleaning up a former industrial site, panning environmentalists demands to expand an already “excessive evaluation.”

“Washington has the most trade-dependent economy in the nation, and adding port capacity is essential for shipping all commodities — from apples and wine to coal and timber — to willing overseas trade partners,” Stenger said.

“The unprecedented demand to require Millennium to mitigate greenhouse gas emissions that occur on the other side of the globe will create a harrowing process that should terrify any Washington manufacturer or shipper looking to expand its facility,” she said in a news release.

Kris Johnson, president of the Association of Washington Business, a group affiliated with terminal advocacy group Keep Washington Competitive, expressed concerns about an increasing regulatory burden in Washington.

“We are glad to see today’s release of the draft EIS for Millennium but remain concerned other companies will not be willing to tolerate the delays of Washington’s permitting system and will not bring the needed investment to our state,” he said.

Climate concerns

Jan Hasselman, attorney for anti-export community advocacy group Power Past Coal, said neither Washington state, which has committed to aggressive emissions reductions, nor Millennium supporters, can continue to ignore coal’s role in climate change.

“For the last five years Millennium has been telling us that exporting coal won’t result in any [greenhouse gas] emissions. We now know otherwise,” he said. “Now, they’re trying to shift the conversation when we should be discussing why Washington should authorize up to 7 new coal plants worth of carbon emissions.”

The draft EIS includes various environmental effect scenarios based on market conditions and coal combustion abroad. One says the terminal could contribute 3.2 million metric tons in net annual carbon dioxide emissions or the equivalent of adding almost 700,000 new cars every year.

The document also expressed concern about rail traffic, and coal dust reaching waterways, land and vegetation. But the potential dust effects, as outlined by the draft EIS, may not be as significant as some environmentalists believe.

“Coal dust particles from trains related to the Proposed Action would enter the aquatic environment through movement of coal into and around the project area and during rail transport, but would not be expected to significantly affect behavior or survival of fish,” said the extensive study.

The public will have a chance to weigh in on the draft EIS at three meetings across the state — May 24 at the Cowlitz County Regional Event Center in Longview; May 26 at the Spokane Convention Center in Spokane, a major hub for coal trains headed to port from the Powder River Basin; and June 2 at the TRAC Center in Pasco, Wash.

John Stuhlmiller, CEO of the Washington Farm Bureau, said his group plans to voice support at the meetings.

“Farmers and growers understand the more opportunity Washington has to export, the greater the willingness there will be to invest in the infrastructure to support these exports,” he said in a press release.

The Army Corps of Engineers has also been reviewing Pacific Northwest export terminal proposals and been working with Washington state regulators. But the federal agency plans a more narrowly-tailored EIS.

Coal dynamics ‘permanently changed’

Despite today’s milestone, more dark news continues to emerge from coal companies and projects. Cloud Peak Energy Inc. this week reported a $36 million quarterly loss. CPE is looking to increase exports from another proposed Washington state terminal, Gateway Pacific.

“It is clear that the dynamics of the coal industry have permanently changed,” Cloud Peak CEO Colin Marshall said. “Where coal used to provide base load generation, it is now much more variable depending on power demand, renewable output and the price of natural gas. We are currently adapting to operating in an environment where shipments vary significantly from quarter to quarter.”

Cloud Peak also said it was moving away from the practice that allows companies to use their healthy balance sheet and not third-party bonds to guarantee mine cleanup obligations.

“The Company is proactively working to address the ongoing regulatory uncertainties regarding self-bonding programs in Wyoming by seeking to voluntarily transition away from self-bonding,” Cloud Peak reported today.

Click here to read the draft EIS.