Southern British Columbia Coal Terminal Schemes

While meandering about doing field work on the Olympic Peninsula I caught up a bit with British Columbia news listening to the CBC while driving and in camp. Oil and coal exports are perhaps even a hotter topic in British Columbia than Washington State because the impacts of the various schemes are all over the map of our neighbor to the north. Those issues were front and center in the latest Provincial elections - which did not play out well for CO2 advocates with the Liberals retaining power.

What follows is a southern BC coal terminal tour of sorts. Perhaps a companion of a now bit dated (but popular post) tour of Washington and Oregon schemes (coal-terminals-in-northwest-tour-update). I left off any discussion of the Prince Rupert coal terminal.

The latest coal issue is a proposal to build a coal terminal at the Fraser-Surrey docks.
portmetrovancouver/Tenant-Led_Projects/FraserSurreyDocks

The scheme of the terminal would be to import via rail coal from the Powder River in Montana and Wyoming, load the coal onto barges, haul the barges to Texada Island where the coal would be loaded onto large coal ships. In a manner this is similar to one of the schemes in Oregon on the Columbia River. The proposal would take about one train load of coal per day. Perhaps 1/8th the scale of the proposed Cherry Point scheme by GTP. And with the extra loading steps a bit more complicated.

The Port Of Vancouver recently approved the expansion of the Neptune Beach coal terminal on the north part of the Vancouver metro area.
portmetrovancouver/Application_Neptune__Coal_Handling_Infrastructure_Improvements__Project
portmetrovancouver.Project_Review/January_2013_FINAL_Neptune_Project_Input_Consideration_Memo

The Neptune expansion is of an existing facility. The expansion will allow a greater throughput of coal through the existing terminal via upgrades to the rail tracks and loading equipment. The Neptune site ships high quality coal needed for steel manufacturing and would likely not be amendable to the low quality Powder River coal.

The overall map of the existing and proposed coal schemes in the Lower Fraser Mainland looks like this:

Neptune exists and is used to ship high quality steel coal and has recently been approved to expand capacity. Roberts Bank is the big existing terminal that ships thermal coal and currently receives something like three train loads a day from the Powder River in addition to the Canadian coal. It has expanded capacity but unless a major foot print expansion is undertaken it likely will be limited in further expansion. The two new sites are Fraser-Surrey Dock and Cherry Point.

A worthwhile read on the Port Metro Vancouver and for that matter Canadian view of coal exports can be found here: portmetrovancouver/Proposed_Coal_Projects_at_Port_Metro_Vancouver

The reality is that Port Metro Vancouver is a very aggressive port. They currently have a huge advantage in exporting bulk dry goods and a very strong mandate to facilitate shipping of bulk goods. Their letter (above) clearly indicates that bulk facilities will be permitted and a read through the permit processes thus far suggests that indeed the facilities will likely be permitted. That said, the Port does appear to be hitting some capacity issues in shipping coal. The focus has been on steel grade coal because that is what is being produced in the Canadian mines and the demand for that type of coal has been steady. sightline/canada-coal_2012.pdf discusses the likelihood of Canadian handling of Powder River Coal; however, the Fraser-Surrey Dock was not included nor was there a discussion of the Texada Island terminal.

Texada Island is a relatively large island between the mainland of BC and Vancouver Island. The Fraser-Surrey Dock scheme would be to load barges with Powder River coal and haul the coal up to the existing Texada Island terminal for shipment via big boats to Asia.

Geologically Texada Island has a very important resource - limestone for making concrete. The mine location smack dab on a deep water channel makes this site a huge player in concrete and is a very critical source of concrete for projects in Washington State.

Limestone mine on Texada Island

Close up of Texada Island shipping terminal

A close look at the Texada terminal shows huge stock piles of limestone, but there is a coal pile as well. The coal comes from the Quinsam Mine on Vancouver Island. The Quinsam Mine is an underground mine that produces very high quality coal that can be used in steel production. The coal is barged a short distance to the terminal at Texada. The coal at the Texada facility is shipped to support the kiln heating for making cement. Hence, the coal terminal at Texada supports the cement industry demands wherever the limestone is shipped. Cement plant clients in Tacoma and Seattle import limestone and coal from Texada Island.

Currently, the Quinsam Mine produces 520,000 tons of coal per year. A very minor volume relative to the numbers of tons (50 million) of coal being discussed as export from the Powder River. But one does have to wonder if coal resources so close to the water and a coal terminal (Texada) might be viewed as a far superior source of coal that would readily out compete the low grade coal from the Powder River.

I don't pretend to have crystal ball and can only say this energy future stuff is a tricky business and is likely full of curve balls and change ups when your trying to hit a home run. My impression is that the GPT Cherry Point scheme is going for the home run and the Canadians are going for the more certain bunts and singles. And there are a lot of other players we are not seeing. And some of the actions are simply bluffs that are part of negotiations that have nothing to do with us. Complicated stuff.