Empty aluminum boxcars sit at the railroad yard near the Westshore Terminal near Vancouver, British Columbia, waiting for their return to the coal fields. Westshore, a coal-shipping operation on the West Coast, has been in business on a man-made island for 40 years. - MCT

Fights brew over NW coal exports

SEATTLE — With the Northwest poised to become the country's leading coal-export region, fights are emerging on several fronts.

On the table are proposals to capitalize on Asia's thirst for cheap energy by building a half-dozen terminals in Washington and Oregon that would export coal from the Rockies.

Physicians fret about an explosion of locomotive exhaust, while mayors grumble about the potential for long traffic-snarling trains. Washington state fears 1,200 new barge trips on the Columbia River could spark more accidents and marine-vessel groundings. Tribes worry that spilled coal could poison aquatic food webs.

But as the federal government begins its first lengthy review of plans to ship coal through Northwest ports, it's not clear how — or if — the feds will weigh in on perhaps the most far-reaching issue: the potential effect new markets for coal could have on greenhouse-gas emissions.

If each of the proposed terminals, which range from Bellingham, Wash., to Coos Bay is built to capacity, Washington and Oregon eventually would export 150 million or more tons of coal a year — half again as much coal as all U.S. exports combined in 2011.

While the National Environmental Policy Act, or NEPA, requires federal agencies to review the environmental impact of major decisions, it's not clear if carbon-dioxide emissions from burning U.S. coal overseas qualifies. Still, some regional leaders are insisting the impacts on climate play a role in assessing the future of the projects. They argue, as have environmentalists, that if the U.S. supplies Asia with cheap coal, places such as China and India will invest in new coal-fired power plants and the incentive to find cleaner energy will plummet.

"If the United States is going to embark on a large-scale export of coal to Asia, it is imperative that we ask — and answer — the question of how such actions fit with the larger strategy of moving to a lower-carbon future," Oregon Gov. John Kitzhaber said last month in a strongly worded letter to the secretary of the Interior and the secretary of the Army.

"In the absence of a clear federal policy on this point, we will simply be deciding by not deciding."

This month, the Seattle City Council echoed that view, arguing in its own letter that coal-export terminals "risk altering the country's progress" in combating climate change.

Both letters also were directed to the U.S. Army Corps of Engineers, because it will take the lead in evaluating coal-export projects. The agency is only beginning to review the first, in Boardman.

Coal-industry analyst Andy Roberts, with Maryland-based Wood Mackenzie research and consulting service, says he isn't surprised some are arguing for using NEPA to look at the global impact of coal burning.

"But it's a national — not an international — act," Roberts said. "I think people against this kind of development will reach for any lever they can pull."

He and other energy analysts say the Asian market for coal is so strong that if Rocky Mountain energy isn't sent to the Pacific Rim, China and India will buy it elsewhere.

"I'm in Asia four or five months a year, and they're just drooling for it," said Topeka-based coal-industry analyst Randy Rahm.

Thus far, each project calls for shipping coal by rail, mostly from the Powder River Basin in Wyoming and Montana. In Boardman, coal would be offloaded and barged downriver to cargo ships near the Columbia's mouth. Other projects call for the black gold to stay on trains all the way to Cowlitz or Grays Harbor counties, or travel south to Oregon or north through Seattle to a port in Bellingham.

Here's why the proposals are exploding: The U.S. produces 1.1 billion tons of coal each year, but the rise of cheap natural gas and the Environmental Protection Agency's crackdown on coal-fired power plants has flatlined coal consumption in the U.S.

Meanwhile, China is growing so fast it has gone in the past two years from a net coal exporter to a net importer. And while there are midsize coal yards in Canada and a small one in Alaska, there is no coal-export terminal on the continental U.S. West Coast.

"The world has been increasing its consumption of coal on an annual basis since 2001," said coal analyst Michael Dudas, with Sterne Agee, a brokerage house. "In the U.S., growth has been zero, with a negative bias."

As home to the world's largest recoverable coal reserves, the American coal industry is pitching exports as a jobs and construction bonanza.

But analysts say the industry also sees exports to Asia as its best shot at growth.

"Coal used to be 51 percent of our electricity generation," analyst Rahm said. "Now it's down to 40 percent. The whole coal environment in the U.S. has changed."

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