Tuesday, February 22, 2011

Coal Terminals in Washington State

In the early 1700s English explorers on the Pacific Northwest coast obtained otter pelts from First Nations peoples in exchange for goods very highly valued by the First Nations peoples, but of little value to the Europeans. The otter pelts fetched highly valuable china from the Chinese which in turn amounted to huge profits for the investors when sold back in England. This round-the-world trade route involving otter pelts from the northwest had a profound impact on the politics and commerce of the Pacific Northwest long before settlement by English and Americans took place.

China may not be currently that interested in otter pelts, but the Chinese are very interested in energy. The Chinese are apparently interested in American coal. And some very large international energy companies are very interested in selling coal. The United States has been described as the Saudi Arabia of coal. This may be a severe understatement. While there is active coal mining in the Centralia area of Washington, the big mines are in Montana and Wyoming. Getting coal to China from Montana or Wyoming means getting the coal via rail lines to deep water ports that have land available for storing and loading coal. For mining areas in Wyoming and Montana that means the lower Columbia River or deep water ports of Puget Sound or the Salish Sea. Indeed I have seen a lot more mile long coal trains heading across the Skagit flats and along the water of Chuckanut and Bellingham Bays. These trains are heading to Robert's Banks just north of the US-Canadian border where there is a large coal shipping and container shipping facility. However, the Robert's Bank facility is nearly at capacity so other sites for new coal loading facilities are being considered. Most of the coal that arrives at Robert's Bank is via rail from coal mining areas in eastern British Columbia and Alberta. For coal trains from the United States the challenge is restrictive rail routes. There is of course the international border issue, but rail shipping relies on rail lines that must negotiate urban areas of western Washington and very limited track availability and periodically long delays as several sections of the rail are closed by landslides on a nearly yearly basis.

Hence, coal terminals in Washington State are being considered with one in the permitting stages currently. The coal terminal issue in Washington State has become big news with in depth articles in the Wall Street Journal and New York Times. The issues are both intensely local and intensely global.

The subject has interested me as I have been involved in reviewing geologic conditions on rail line projects and large shipping terminal projects as a geologist. So I decided to take a tour of the coal terminal sites and schemes so I did a little Google Earth tour.

Robert's Bank pier.
The pier to the south is the BC Ferry Terminal for ferry service to Vancouver Island and the Gulf Islands. Note the lower half of Point Roberts extends down into the United States, an oddity from the border being set at 49 degrees latitude.

Robert's Bank coal and container shipping terminals. The length of the coal storage area is 1 kilometer.

Ship being loaded. Ship is 750 feet long

Robert's bank and two potential terminal sites

The possible new coal terminal sites are limited. It takes deep water ports with rail access. This criteria has very much defined the shaping of the Washington landscape since rail lines began to extend into the Pacific Northwest. Millennium Bulk Logistics a coal shipping company approached the Port of Tacoma a port that meets this criteria, but the Port of Tacoma declined the option of being a coal terminal. I suspect that this was in part based on the fact the Port of Tacoma is already a major container shipper and was not keen on a speculative and contentious proposal that might interfere with the existing shipping facilities.

The lower Columbia River has long been a shipping center with multiple deep water shipping terminals along the lower river. Access from inland areas is via major rail lines along the banks of the Columbia River, an Interstate Highway on the south bank of the river, and barge traffic that allows shipping all the way to Idaho. Portland Oregon is the major city of the lower river, but terminals for shipping are located at many sites along the maintained river channel. The broad plains along the lower river bank allow for bulk shipping terminals and there has been a long history of bulk shipping at facilities on the lower Columbia shipping logs, lumber, wheat, bauxite and aluminum.

At the present time there is a proposal to build a coal terminal near Longview, Washington is in the works. The Cowitz County Commission approved the project, but the project has been appealed to the State Shoreline Appeals Board challenging the lack of review regarding the impacts of mining, impacts to energy markets and impacts to carbon dioxide emissions. The State of Washington Department of Ecology has stepped into the case as an intervenor noting that the train traffic alone will push up Washington State's CO2 emissions at a time when the State has set a goal of reducing CO2. The State intervening is an interesting twist as the State is ultimately responsible for any shoreline permit. The proposed Longview project is a huge project. The proposal is to ship 5 million tons of coal per year; however, corporate records tracked down by one of the appellants indicate an interest to later expand to 60 million tons per year. To get a sense if one can of the CO2 output, 5 million tons of coal equates to the CO2 emitted from 2 million cars in one year. As of this writing this potential expansion is creating pressure in Longview for the County Commissioners to reverse their prior approval with the local paper, the Columbian asking for the approval to be pulled.

Longview on the lower Columbia River, The river flows from right to left

Closed aluminum plant site proposed for coal shipping

View of part of the Longview industrial waterfront from the Oregon side of the river.
Note that industrial shipping sites are located on the Oregon side of the river as well.

Highway 30 bridge at Longview high above the water to allow ship passage

The CO2 issue has garnered a lot of attention with in depth articles in the Wall Street Journal and New York Times. Big financial forces and global politics are colliding in Washington State. Lots of international interests in a profitable venture. In a way the issue is not so different when international trade collided with the economies and traditions of the First Nations coastal tribes in the 1700s. The values of the First nations peoples caught suddenly caught up in international trade were disrupted. Washington State has set a policy of reducing CO2 emissions. That policy and the state's role in global CO2 are being challenged. A big challenge for Washington State citizens will be the internal politics of coal terminal siting. Jobs, tax revenue, pollution, train noise, transportation disruption from long trains, international trade balance, property value impacts, and global warming denial will all collide to test a whole range of state and local community values.

The Longview site is not the only site being discussed. There are likely other sites along the lower Columbia on both the Washington and Oregon sides of the river. A few years ago I evaluated a site being considered for a liquefied natural gas terminal.

A parcel of land long designated for an additional deep water pier is located in Whatcom County near the Canadian border at a place called Cherry Point. No permit applications have been submitted, but a public relations campaign has already begun with lining up of influential people weighing in advocating jobs and tax revenue and making statements about how they live in the real world and dismiss objectors as living in a theoretical world. Fairly typical large project touting. But as should be expected, the impacts will be pointed out by those with concerns with impacts to fish stocks (Cherry Point happens to be a critical herring fishery area), rail traffic, air and water quality, and of course the global CO2 impact of shipping and burning coal for electricity. A nice divisive issue to pit community folks against each since Bellingham may see 30 one-mile trains per day passing through the city. And this issue will bring out the global warming deniers and highly rational discussions that go with that subject (OK- a little opinion slipping into my neutral blog, but for those that know me well and follow local news in Bellingham, you know I am holding back regarding the opinions of at least one locally influential person).

In the 1700s this land saw inter tribal strife over trade and it appears that history may be to some extent repeated. But depending on how the issue of CO2 plays out in Longview, the issue may never really amount to anything in Whatcom County and the Cherry Point PR campaign will be all for naught. It won't be the first time for the pier schemes at Cherry Point.

Cheery Point relative to Robert's Bank

Possible Cherry Point site in Whatcom County


C W Magee said...

For those wondering about the economics, here is the export price of coal to Asia (from Australia) over the last 5 years:

Ryan M. Ferris said...

Let's not forget that Bellingham and Whatcom were once and (probably still are) a huge potential source of coal. King Mountain was once identified as having a huge, as yet undeveloped,'syncline' of coal. Wouldn't it be ironic if after all the real estate money that tried to build up Whatcom County as a 'destination location' we started digging the place up to sell coal to China...Maybe they would even let those of us with old brick coal fireplaces burn some to same money on winter heat...

Dan McShane said...

Interesting thought Ryan. AMEX coal did extensive drilling in rural Whatcom County in the late 1970s with the idea of open pit mining. The results were an extensive seam of coal that was at that time considered marginal. Of course with a large shipping terminal nearby, the calculus of some of Whatcom County's deposits may shift.

Ryan M. Ferris said...

Boy..., Let me just confess to being a NIMBY right now: I did not move here to raise my child in a county with open pit coal mining. Sorry, that wasn't part of my life long plan. I would like a nice "smart city" that builds high-tech jobs and cultivates a prosperous population - something more like Hillsboro, OR and less like ... (most of) West Virginia, The Powder River Valley, the giant hole in landscape that was Alberta, whatever... In the last mayoral election, Dan Pike promised me he would be working on along the lines of high-tech, professional, innovative employment. Looks like what we are going to get are lumps of coal to me...

Anon 777 said...

Thank you, Dan, for providing this excellent summary. I agree with a large segment of Bellingham who are rightfully concerned about the substantial adverse impacts of the entire project. But beyond those externalities of the cargo facility and coal trains, I question the sustainability of a business model based on exporting coal to China.

As a commodity, the demand for US coal is highly elastic and extremely sensitive to price. A major factor is the cost of shipping US coal such long distances. Another factor is the cost of local labor; in the case of SSA Marine’s Gateway Pacific Terminal (GPT) at Cherry Point, the cost of union-wage labor.

The Chinese have chosen to preserve much of their own coal and export from other countries instead. I believe they’ve made a wise decision. But that decision may change as the cost of imported coal increases. How long before US coal is priced out of the market?

No matter how you look at it, any business model based on exporting commodities (and other price sensitive and fungible products) to China has little staying power. I just don’t see the wisdom in supporting something whose benefits will be so short-lived and whose adverse impacts so long-term.

Have we lost the ability to look beyond the “next paycheck”?

Chris said...

Interesting article!

Which rail routes will carry the coal from the Rocky Mtns. to Cherry Point? I believe that WA has only two east-west routes: Stevens Pass and the Columbia River. Steven's Pass involves a 2900 foot pass. Not sure if coal trains can handle such a climb. The alternative would be the Columbia Gorge and then north all the way through western WA. The Longview port would make more sense for that alternative.

Anon 777 said...

There are several coal trains running through Bellingham now on their way to Robert's Bank. Which route are they taking?

Dan McShane said...

Chris - You are almost correct. It is my understanding that the Stampede Pass rail line has been reopened and there are plans to expand the tunnel to allow double stacked container cars.
I do not think Stevens pass would be a big obstacle compared to some of the other passes that must be crossed just to get to Washington State over the Blue Mountians in northeast Oregon or the pass over the mountains in northern Idaho.
Based on current train traffic money is to be made shipping coal by train from Montana or Wyoming to Robert's Bank.
There are some issues about bulk shipping and depth of bulk ship drafts that may be an issue in the coming years for the lower Columbia. I do not know a lot about other than a reference to the issue reagrding wheat shipment on a report to the Port of Walla Walla.

Anonymous said...

There hasn't been a "herring fishery" at Cherry Point since 1996 and at that time it was a tiny take - by a roe on kelp fishery - no actual fish are taken in this type of fishery. Regular fishing of herring ended over 20 years ago. The critical spawning biomass for CP herring is about 3300 tons. Cherry Point herring were managed by the WA Department of Fish & Wildlife on a conservation basis since 1986. In 1999 an attempt to list the Cherry Point herring as endangered was thwarted by BP who gave the only conflicting testimony which indicated that Cherry Point herring were part of Pacific Herring and not a distinct species. Since Pacific Herring are not in short supply over all, the attempt to save the CP Herring was turned down. The filing included detailed information from UW scientists that illustrated the distinction of CP Herring from Pacific Herring. Why the filing was turned down is unanswerable. Last year the spawning biomass was 770 tons. Considering that this herring population used to exceed 14,000 spawning tons - this is shocking. The graph of herring spawning biomass produced by WDFW indicates an ongoing and rapidly increasing decline since a couple years following the building of the ARCO/BP Expansion Pier which is extended into a deep water trench that skittish prespawning herring hole up in prior to the spawning event. It is speculated that disturbing herring with large vessels that are escorted by tugs sporting eggbeater props may disrupt and potentially curtail spawning activity. No doubt the proposed terminal which will sandwich the herring between BP & CP with huge ships, and the coal dust which will provide a steady diet of toxins will be just what the herring need to recover.

Dan McShane said...

Anon - Thanks for the summary of the herring fishery (or lack of) at Cherry Point. I was unaware of the additional decline, but am not surprised.