Could coal put port in the black?

2011-12-03T07:00:00Z Could coal put port in the black?By Gail Elber, The World Coos Bay World
December 03, 2011 7:00 am  • 

COOS BAY -- 'Project Mainstay," a collaboration being studied by the Port of Coos Bay and unnamed partners, could bring a coal-shipping terminal to the North Spit. The terminal could help fund other shipping development, including improvements to the Coos Bay Rail Link, says Port CEO Jeff Bishop.

But the Sierra Club says we'd get those benefits at an unacceptable cost to other people along the coal's path, from the mine to the Asian countries where the coal will be burned.

With five ports in Oregon and Washington negotiating coal port deals, the Sierra Club is trying to convince regulators and citizens in those states that exporting U.S. coal to Asia is a bad idea.

The coal in question comes from the Powder River Basin in Wyoming and is destined to be burned at Asian power plants.

The Sierra Club doesn't think anybody in any country should be digging up coal or burning it, citing pollution concerns.

But to stop proposed shipments to Asia, it's taking a different approach: Drawing attention to the problems of transporting and storing coal between Wyoming and the West Coast.

'We're opposed to exporting coal because it would have environmental, health, safety and economic impacts all along the line," said Laura Stevens, an Portland-based organizer for the Sierra Club's Beyond Coal campaign.

Coal is shipped in mile-long trains, called unit trains because the cars stay together from the mine to their destination.

Adding such long trains to the Northwest's railroads would snarl automobile traffic and delay emergency vehicles as the trains inched across grade crossings, Stevens said.

It would also, she said, create problems on rail lines themselves.

'Coal trains are more likely to derail," she said. Coal dust flies out of open coal cars, works its way down into the ballast (the crushed rock under the ties), and allows water to accumulate, which can cause track alignment problems.

To prevent that, coal shippers now spray a binding compound on top of the load.

At terminals, coal piles and conveyors also are notorious for spewing toxic coal dust. In 2010, Alaska fined the Alaska Railroad $220,000 for letting coal dust blow into the harbor near the Seward Coal Terminal. In October, to settle a Clean Water Act action by two community associations, Millenium Bulk Materials paid a $50,000 penalty and agreed to cover its coal conveyors at a coal-handling site in Longview, Wash.

But Port of Coos Bay representative Elise Hamner said this week the Port will not consider any proposal that involves open piles of coal. Covered bunkers, or a system of conveying the coal directly from cars, would have to be used.

Another issue is whether the coal traffic would crowd out other shipments on the Coos Bay Rail Link from Eugene to the North Spit. The terms of Project Mainstay are still vague, with initial estimates at 6-10 million tons of coal being shipped a year. Coal trains typically consist of 120 cars carrying 120 tons per car -- about 15,000 tons per train. So one or two trains a day might visit the port.

Bishop said Monday that so far, nobody knows what the rail line's capacity is. He said container terminal developer studied the problem, but kept the results to itself. The port has commissioned a new study.

But Bishop said a contract between the Coos Bay Rail Link and the Project Mainstay partners would be a long-term 'take-or-pay" contract, in which the shipper would pay for a certain amount of capacity on the line, whether it uses it or not.

'The contract underwrites the railroad for 50 years," he said. 'It would allow for reinvestment in the corridor."

The rail line hasn't had such an infusion of cash since it was built in the 1920s, he said.

Though such benefits look good, they might be short-lived. West Coast coal terminals have failed in the past because predictions for Asian demand didn't come true.

For instance, the Port of Portland built a coal shipping terminal in the 1980s, which failed within a few years for lack of customers. In 1997, another terminal was commissioned in Los Angeles by U.S. and Japanese partners hoping to sell to Japanese utilities. Major partner Peabody Coal pulled out even before the terminal was built, and the terminal closed in 2003.

Because of these risks, the Project Mainstay partners and the Port are taking six months to study the pros and cons of the project under an exclusive negotiating agreement.

In addition to a market big enough to justify a terminal, improved rail services and a deeper channel, a coal terminal will need the blessing of state environmental regulators. That might be hard to get.

Although Gov. John Kitzhaber hasn't taken a position on coal exports from Oregon, he told the Oregonian June 14 that development of a terminal 'should not happen in the dead of night."

'We must have an open, vigorous public debate before any projects move forward," his statement said.

Bishop, who wll leave the Port at the end of December, calls this a lack of support that could hamstring the Port's efforts to develop rail and shipping.

'If the state doesn't allow it, they've allowed the community to take the risk and then said, 'We're just kidding -- we're going to stick you with it,'" he said.

Reporter Gail Elber can be reached at 541-269-1222, ext. 234, or at gelber@theworldlink.com.

Copyright 2015 Coos Bay World. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(2) Comments

  1. Just An Observer
    Report Abuse
    Just An Observer - December 03, 2011 11:14 am
    10 MPH coal trains sound like just the ticket...LOL!

    So much work needs to be done on this railroad line. See how rusty the bridges are in Reedsport and Cushman. How many decades has it been since they were given some paint and had their rust dealt with?

    Coal trains can weigh as much as a World War II heavy cruiser. Our track and bridges need to be tip-top to handle the load before any loads are carried.
  2. Sanzimar
    Report Abuse
    Sanzimar - December 03, 2011 9:54 am
    As happened in Longview last year, Ambre/Millennium's true coal export plans were withheld from our local, county and state agencies. It seems that this coal export developer also requires secrecy of their identity and their study results. Why? I associate the need for secrecy as "deception." The Port of Coos Bay is obligated to complete a thorough review of the costs and impacts to their community and future economic growth in allowing this coal export terminal.
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