The Coal Industry Wants To Build Export Terminals in Washington and Oregon. Can Environmentalists Stop Them?

Commentary about business and finance.
May 4 2012 5:04 PM

Should We Ship American Coal to China?

The brewing fight over the construction of Pacific Coast coal ports could determine the health of an industry—and the planet.

Laborers prepare charcoal.
Coal producers want to send their product to China. Environmentalists want to stop them.

Uriel Sinai/Getty Images.

Coal, long king of the U.S. energy game, faces a troubled future here. Its problems started years ago when local activism began making it exceptionally difficult to open up any new coal-fired power plants, and caused some old ones to close as well. Coal dodged a bullet when the Republican Party had a sudden post-2008 mass conversion away from belief in climate change (was it so long ago that candidate John McCain vowed to “make global warming a priority” in his administration?), but the success of natural gas has created a whole new set of problems. The application of new fracking techniques has sent gas prices plummeting, upending the economics of coal. And while environmentalists don’t like fracking, almost everyone agrees that gas is more eco-friendly than coal. Its cost advantage gone, coal appears cornered. Then in March came the EPA’s New Source Performance Standards for carbon dioxide which essentially make it impossible to build new coal plants absent the arrival of some miracle carbon capture technology.

But there is a new hope for U.S. coal: China.

Everyone who’s been able to sell commodities to China over these past few years is doing great, whether minerals from Australia or soy beans from South America. China’s insane growth, robust manufacturing, and soaring domestic investment fuel a voracious appetite for basic inputs, including coal. As Grist’s David Roberts puts it, “the question for the U.S. coal industry is: Can exports rise fast enough to offset declining domestic demand?”

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On paper, the fundamental outlook for the coal export industry looks really good. According to the U.S. Energy Information Administration, in 2011 just seven out of 107 million total tons of export coal left the country via Pacific Ocean ports.

For now, in other words, we are mostly shipping coal across the Atlantic to Europe. But China is where the growth is. And there’s plenty of coal underground in the Powder River Basin of Wyoming and Idaho. Given domestic trends, most of this coal may never see the light of day. But it’s conveniently located for the Pacific export market, and freight railroads are already shipping it west in bunches, annoying the areas it passes through in the process. The problem for the coal mines and the rail operators who love them is that the west coast simply doesn’t have much infrastructure in place to get coal off the railcars and onto boats. For America to really emerge as a major coal supplier, we need suitable port facilities—which is exactly why plans are underway to build six major new outlets in Oregon and Washington.

Building anything as big and dirty as a coal export terminal is bound to be controversial. A terminal entails, among other things, giant piles of coal sitting around in the open air, casting dust into the vicinity. Air quality aside, they’re ugly and—necessarily—take up what could be otherwise pleasant waterfront space.

But more to the point, the fact that the vast coal reserves of the American heartland need to pass through the relatively narrow bottleneck of the generally progressive Pacific Northwest gives environmentalists one of their best available opportunities to curb carbon dioxide emissions in the absence of any meaningful progress toward a national or global framework. There’s simply no path to coming anywhere close to meeting the scientific community’s climate goals that’s consistent with burning all of America’s coal reserves and the atmosphere doesn’t care whether that coal gets burned in the United States or China.

In Washington State they have some potentially powerful tools at their disposal. The proposed terminals there would need to pass State Environmental Policy Act review, so if Democratic Gov. Christine Gregoire and her administration want to block them, they can. The proposed Oregon ports are not subject to the same statewide environmental review. Instead, Democratic Gov. John Kitzhaber has called for a sweeping federal review of the issue, expressing “grave concerns” about expanding coal exports. It’s not clear, however, what precise impact federalizing the issue could have. Eric de Place, a senior researcher at Seattle’s environmentalist Sightline Institute, tells me there’s no specific federal policy lever the Obama administration could use to block terminal construction. Meanwhile, neither a Republican-controlled House of Representatives nor a Senate filled with coal state Democrats is going to intervene.

That’s too bad, because Kitzhaber is absolutely right that coal exports shouldn’t be treated as a picayune local land-use decision. The case for coal exports comes down to the hardy perennials of jobs and money. But the good news for coal opponents is that digging up coal in Idaho and Wyoming to ship it to China doesn’t create many jobs in Oregon. The money, similarly, flows mostly to the owners of the mines and the railroads. Port communities would see only a tiny fraction of the economic benefits of a coal flow. At the same time, the local environmental impact is only a tiny fraction of the worldwide implications of a vastly expanded coal trade. And if the United States wants to stay out of the Pacific coal export business we ought to make sure we do it properly rather than simply diverting the flow north to British Columbia. The future of the American coal industry has huge national and global implications. Treating it as a handful of local zoning controversies is extremely misleading. But with Washington locked into what amounts to across-the-board gridlock that’s exactly what we’re going to get.

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