Four Proposed Coal Export Terminals Have Now Failed This Year Due To ‘Diminished’ Market

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As coal continues to decline in the U.S., plans to export it to overseas markets are going south. On Tuesday, the Port of Corpus Christi announced that it was ditching plans to build a major coal export terminal there after two years of development, citing a “seriously diminished” international interest in coal. Ambre Energy North America Inc., who entered into the $2.5 million lease in 2011, will pay a one-time fee to cancel it, according to a meeting agenda released today by the Port.

From the agenda:

Over the past four years interest in exporting coal at the Bulk Terminal has gone from no interest to a high of 40 million tons per year and then back to seriously diminished interest. Currently the export coal market has shrunk substantially. The domestic market has seen older coal fired power plants closed with some being refitted to burn natural gas. Wind and solar power driven by regulatory incentives have created additional pressure on coal. The enthusiasm for export terminals among coal producers has diminished.

The announcement is a major victory for environmentalists, and marks the fourth time in 2013 that a proposed coal export terminal has been canceled due to a deteriorating market. Of the proposed terminals still on the table, local opposition to the three remaining projects in the Pacific Northwest continues, as well as to a proposed terminal in Louisiana slated for construction next to a wetlands restoration project.

“This is the third coal export project that has been canceled in this region,” Hal Suter, chair of the Lone Star Chapter of the Sierra Club and a lifelong Corpus Christi resident told Public Citizen. “Ambre’s failure is a huge relief for Corpus Christi residents and it’s a clear sign of an accelerating shift away from coal. Texans don’t want coal, Gulf states don’t want coal and international markets don’t want it either.”

Indeed, the decision to scrap the project seems almost like deja-vu for the Corpus Christi port. In August, the port announced that it would stop progress on another coal export terminal proposed by New Elk Coal Company, again citing “a decline in the coal market” and “financial difficulties.”

In the Pacific Northwest, energy company Kinder Morgan announced in May that it was dropping plans to build its Port Westward Project near Port of St. Helens, Oregon. That project would have transported 15-30 million tons of coal from Wyoming and Montana to Asian nations. Another proposed terminal in Coos Bay, Oregon, was also shelved in April after its last financial backer dropped out.

While it seems that the companies have largely attributed their decisions to logistics of the site and the coal market, community opposition to many of the proposed terminals environmental groups has played a large role across the country. Before announcing its ultimate closure, New Elk’s terminal was put on hold after grassroots activists rallied against it and Sierra Club released a report in early 2012 called The Port of Corpus Christi Gambles on Coal Export Development.

That report cited an industry estimate of approximately 500 pounds of coal dust and chunks that can escape from a single loaded rail car of coal while it is being transported from its mine (usually in the Powder Riven Basin in Wyoming and Montana) to Texas. Because each coal train contains over 100 rail cars, the course of one trip from Wyoming to Texas would mean 50,000 pounds, or 25 tons, of coal dust that would escape from rail cars onto the ground and possibly into surface and ground water. Coal dust has been linked to chronic bronchitis, emphysema, and and environmental contamination through the leaching of toxic heavy metals, according to Sierra Club.

Concerns have also been raised that companies that export coal are not be providing taxpayers with a fair return for the extraction of their tax-payer owned minerals, and are “dodging” royalty payments. This allegation has prompted an internal investigation at the Department of the Interior, interest by the chairman and ranking member of a key Senate committee, and concern from the governors of Oregon and Washington. Moving the coal from the Rockies to the west coast or Texas also requires significant new infrastructure, including trains that can be up to a mile long, which produce increased diesel emissions, noise, and potential water contamination.