Has the Port of Coos Bay, Oregon, been hiding something? Environmental critics say it has. The port says otherwise. Either way, the whole dispute will become largely moot this month if the port, as anticipated, tells the world which company has been talking to it about building an export terminal capable of shipping 10 million tons of coal a year from the Oregon coast.
But — as in Bellingham and Longview — the announcement won't make the controversy over coal exports go away.
The Coos Bay port has made no secret of the fact that it has been talking with someone about "Project Mainstay," the plan to export Powder River Basin coal, or that the private Jordan Cove Energy Project, which has already gotten preliminary FERC approval to import liquified natural gas through Coos Bay, now wants to export liquified natural gas instead.
The Oregon Department of State Lands (DSL) has already issued a permit allowing the port to dredge a 45-foot-deep channel (currently the channel is only 37 feet deep). In an appeal of the permit, environmental groups have called the proposed deepening "the single largest estuarine removal-fill project ever permitted" by DSL.
In order to move future cargo through Oregon's Coast mountain range, the port has also revived a freight railroad that was shut down in 2007. And the port has recently acknowledged talking with an — unnamed — company that wants to get federal money for the Pacific Coast's first offshore wind power project, which would be staged from Coos Bay.
Although the port has acknowledged since January that it has been talking to someone about a coal terminal, it has not revealed which company wants to ship the coal. It has signed a non-disclosure agreement with the prospective shipper. That agreement expires this month.
In the meantime, the Sierra Club and Beyond Toxics have filed requests for public records, for which the port has said it would charge them each about twenty thousand bucks. The groups seeking records have gone to court and gotten a fee waiver. The port has appealed.
Why has a public entity been so reluctant to allow public access to its records? In the first place, says port communications manager, Elise Hamner, the coal terminal "is not a project at this point, it is a concept," and "we've shared everything we know about it . . . except names."
Why charge non-profit organizations twenty grand for the records? "These are not news organizations" which often "know what they're looking for," Hamner says. The Sierra Club and Beyond Toxics have made very broad requests. "We've estimated that . . . there were 2000 to 2500 potential documents." Because some might contain confidential information, a lawyer "would have to evaluate each document. . . . In coming up with an estimate, we figured out what staff time would be, what attorney time would be . . . and we came up with a cost of about $19,000."
Hamner says that if the parties asking for the records didn't pay, the full cost would fall on the shoulders of taxpayers.
Needless to say, the Sierra Club has put a different spin on the issue. The port's "appeal demonstrates the lengths to which the Port of Coos Bay will go to keep Oregonians in the dark about its plans to open our state to millions of tons of dirty, dangerous coal," Laura Stevens, the Sierra Club's organizing representative in Portland, said in a press release. "Perhaps the Port’s reluctance to reveal public information about coal exports development is because the plans will pollute Oregon’s air, land, and water."
Critics see a deeper channel and a resurrected railroad as part of the port's preparation to become an energy export hub. Opponents also argue that during the permitting process the port and the state Department of State Lands have purposely — and illegally — separated channel deepening from the port development that channel deepening would make possible in the permitting process. That is part of the basis on which they have appealed the permit.
The material removed — and disposed of — in the process of channel deepening "would be enough to completely fill the Rose Bowl 12 times over," according to the environmental groups' notice of appeal.
The appellants, which include the Sierra Club, Coos Waterkeeper, Greenpeace, Climate Solutions, and Friends of Living Oregon Waters, argue that the permit "unlawfully segments dredging of the access channel . . . from the anticipated future uses of the access channel and Terminal, which include the export of coal and LNG."
Exporting either fuel "will have a wide array of adverse impacts to the 'protection, conservation and best use of the water resources of the state,' and will unreasonably interfere with the state’s 'paramount policy … to preserve the use of its waters for navigation, fishing, and public recreation.' However, [the Department of State Lands] neither disclosed nor considered any of these impacts."
The appellants pose "a pretty straightforward legal question: whether the DSL can . . . purposely blind itself to the aquatic impacts of what that terminal's going to be used for," says Earthjustice attorney Jan Hasselman. "They just looked at the impacts of digging up the dirt."
Hamner says that the coal, at least, is irrelevant to the deepening project. "The fill and removal permit is strictly to build an access channel and to excavate the ship berth area that would serve the LNG facility," she says. A coal terminal "would be further down the spit," and would require a separate permitting process.
Cargo ships are getting larger, Hamner explains, and if Coos Bay wants to survive as a port, it needs a channel deep enough to accommodate them. As things now stand, "the big vessels can't fit under our railroad bridge, To have them access our lower bay, we need a deeper and wider channel." Any port, she explains, needs a rail connection to the rest of the country.
The port talks about 10 million tons, but Hasselman doesn't think port operators would necessarily stop there. "We have no idea how big [the coal export terminal] would be," he said. "We don't know anything about it." And projections may not mean much: "Once you've got the infrastructure in place, there's no reason why you can't run more trains through there."
At this point, as Hasselman acknowledges, the infrastructure isn't in place to run any coal trains there at all. The port bought the Coos Bay Rail Link, which meets the Union Pacific at Eugene, in 2009, but it is not yet in any state to accomodate coal trains. Until 2007, the rail line had served five mills between Eugene and Coquille, plus American Bridge, which shipped steel products from Reedsport. (When the line shut down, Hamner says, "their products moved to semi trucks. That put about 24,000 more semis [per year] on Oregon's highways.")
So far the port has used federal stimulus and state money to renovate the line, and has contracted with an Arizona firm to run it. Though the revived rail line may be able to handle some wood products, it needs a lot of work before it can accommodate coal trains — much less trains carrying 10 million tons a year. The rails snake through the Coast Range, covering a little over 100 miles and crossing a little over 100 bridges. "The rail infrastructure had been neglected or under-invested-in for decades," Hamner explains.
One-time stimulus money may have gotten the system barely functional again, but it "doesn't solve the long-term maintenance problem." And it didn't create a modern railroad. Right now, Hamner says, it takes a freight train two days to make the trip. Without major improvements, the line can't handle containers, much less coal.
How major would those improvements need to be? Estimates prepared for the company contemplating a coal terminal say that someone would have to shell out around $100 million to make the railroad useable by coal trains. To carry a full 10 million tons, someone would have to shell out around $200 million. The port certainly doesn't have that kind of money and its CEO has said that no public money would be used to upgrade the railroad.
Maybe no port money would be used, but some people assume that taxpayers would wind up footing the bill. "You can be pretty sure," Hasselman says, "that the public is going to be asked to pick up the tab."
The Jordan Cove Energy Project — a private entity that would operate on private property — had already gotten preliminary FERC approval for an LNG import terminal at Coos Bay. But it had filed its application in 2003, when domestic gas supplies looked tight, and LNG import terminals seemed likely to spring up all along the U.S. coast.
Now, with the advent of fracking and cheap, plentiful domestic supplies of natural gas, as Ted Sickinger has reported in the Oregonian, Asian markets promise an opportunity to double or triple natural gas profits. Responding to the changed marketplace, Jordan now wants to use a Coos Bay terminal for exports.
Some people fear, though, that exporting our fracked natural gas will drive up domestic gas prices. A recent study by the federal Energy Information Administration supports that theory. "The stats on LNG export are fairly eye popping in terms of [its] effect on prices," Hasselman says. "That's precisely the kind of thing that needs to be discussed and looked at" before Jordan Cove's permit to import natural gas gets converted to an export permit.
Of course, Coos Bay is not the only struggling port that wants a piece of the proposed coal export business. While the major ports — Seattle, Tacoma, Portland — aren't players, Bellingham, Longview, St. Helens, Morrow, and possibly Grays Harbor and Coos Bay may all want in. "It's Whac-A-Mole," says Hasselman.
Odds are that at least some of those ports will be disappointed. But that doesn't mean they're not serious. "I think they are [all serious]," he says, although "I think we may be hitting the saturation point here." To handle coal exports, a port must have both deep water and rail, and Hasselman says that there aren't many ports with all of the criteria.
"We've already seen a large number of ports, including Tacoma and lower Columbia River ports, say 'no thanks' to coal." That leaves smaller ports, some of which have seen better days. (Coos Bay hit its own shipping peak in 1983. According to a promotional website, "[u]ntil the recent lumber shortages, [Coos Bay] was . . . the largest timber shipping port in the world.")
"I don't know that if we got out of the way every one of them would be built," Hasselman says. However, "there is an insatiable appeitite for the coal overseas."
Some of the projects seem to be moving beyond the concept state: "Within the last six weeks or so, we've moved from one project up at Cherry Point and a whole lot of hypothetical projects to four projects with permits [in the works]," said Hasselman. "If you include the announced capacity of all the projects, you're looking at 150 to 160 million tons a year, which translates to 60 trains a day."
The problem, according to Hasselman: No one has looked at the cumulative impact of all those trains. If you add up the proposed projects, he says, "all of a sudden you've got coal trains going through Portland and Eugene ten times a day."
Just shipping 6 to 10 million metric tons of coal a year through Coos Bay would require an estimated one or two trains a day, according to an article in the Eugene Weekly. "With 15,000 tons of coal — about 110 to 130 cars carrying 120 tons of coal each — coming from mines in Wyoming and Montana," wrote Weekly reporter Camilla Mortensen. "Project Mainstay also means Eugene might see trains more than one mile long coming through town with huge amounts of coal dust blowing from the cars."
The more people learn about such projects, Hasselman adds, the more they dislike them.
