As of two weeks ago, five terminals to export U.S. taxpayer-owned coal to Asia were proposed for Oregon and Washington. But in the face of fluctuating international energy demand and environmental opposition, one of those terminals—Coos Bay, in Oregon—has been shelved after its last financial backer dropped out early last week. The three backers (Metro Ports of California; Mitsui & Company, a Japanese trading company subsidiary; and Korean Electric Power Corporation) have now all pulled out.
Declining demand for electricity from coal has caused large coal producers to look towards international markets, particularly Asia. The Coos Bay project would have shipped “up to 11 million tons of coal a year to Asia,” according to Oregon Live. Nearly all of that coal is owned by U.S. taxpayers because it comes from public lands in the Powder River Basin of Montana and Wyoming. As the outlet reported last year (before two proposals were dropped):
Arch [Coal Inc.] and other Powder River Basin coal companies are pursuing space in at least six ports in Oregon and Washington to export as much as 150 million tons a year to Asia. The Northwest has no coal export terminals now, and the proposals are hugely controversial.
As seen in the graph below, the Powder River Basin is key to U.S. coal production. Data from the Energy Information Administration also show that all of the top ten highest-producing U.S. coal mines are in Wyoming and Montana. This has major climate change consequences—one government analysis estimated that 13 percent of U.S. greenhouse gas emissions come from coal mined in the Powder River Basin once it is burned.
Recently, concerns have been raised that U.S. taxpayers are not receiving a fair return for their coal that is sold to Asia. For example, Reuters reported that “By valuing coal at low domestic prices rather than the much higher price fetched overseas, coal producers can dodge the larger royalty payout when mining federal land.” Following these reports, Senators Ron Wyden (D) and Lisa Murkowski called for an investigation in the Department of the Interior’s coal leasing process, which was echoed last week by governors Jay Inslee (D) of Washington and John Kitzhaber (D) of Oregon.
In addition to mining, transporting coal from the Rocky Mountains to the Pacific Northwest necessitates additional rail capacity, as well as trains that can be up to a mile long. In just one example of how the fight over coal exports is manifesting, the Sierra Club recently announced plans to sue railroads and coal companies based on alleged Clean Water Act violations.
The four remaining proposed coal export terminals are: the Gateway terminal near Bellingham and the Millennium Bulk Terminals of Longview in Washington, and the Morrow Pacific Project at Port of Morrow and the Port Westward Project at Port of St. Helens in Oregon.