Thursday, October 23, 2014

Coal Could Suffer Major Setback in the Deep South

Residents protest coal exports at a meeting of the Gretna, Louisiana city council.  (Credit:  Jeffrey Dubinsky/Andrew Breiner) Click to enlarge.
With the battle over coal exports now in a lull in the Pacific Northwest, where four of six proposed shipping terminals have fallen by the wayside, the front line in the fight has shifted to an unlikely locale.  Louisiana, a state where politicians and their constituents have long welcomed fossil fuel development, activists, citizens and local governments are now fighting a proposed export facility about 45 minutes south of New Orleans.

Armstrong Coal’s proposed RAM Terminal would ship an estimated eight million tons of coal a year from mines in Colorado, Wyoming’s Powder River Basin, and Illinois.

Opponents fear the facility, located next to a critically needed coastal restoration project, would bring coal dust and disrupt traffic in a rural community, along with contaminating sediments needed to rebuild wetlands in a state where its coastal lands vital to hurricane protection are rapidly disappearing.
Despite appeals from two local governmental bodies, the Jefferson Parish Council and the Gretna City Council, the Army Corps of Engineers on October 1 said it would not hold a public hearing on a required federal permit.  A court challenge to a permit issued by the state Department of Natural Resources, however, is still pending.
With a steady decline in coal’s share of the domestic electricity market, driven by a big shift to natural gas, the growth of wind and solar, and emerging federal limits on carbon pollution, U.S. coal producers have for the past few years been ... talking up exports abroad as their salvation.  To get their product to markets in Asia and Europe, they have supported plans to build or expand about a dozen and a half export terminals at U.S. ports.

But four of the six proposed terminals on the West Coast to serve Asian markets have foundered.  And the remaining two, in Washington State, are only at the beginning stages of long environmental reviews and face strong political opposition from an energized public and leading political figures in the Pacific Northwest.

Perhaps more surprising is that proposals to enlarge export capacity in the Gulf Coast region are also running into heavy weather.  There, as many as a half dozen plans have fallen by the wayside, and political opposition to others is building, even in fossil fuel friendly states like Texas and Louisiana.

At the same time, the price of what is known as seaborne thermal coal used in electricity production has plummeted, driven by a flood of exports from Australia and Indonesia, and there are signs of a dramatic slowdown in consumption of foreign coal in China, which just recently renewed an import tax on foreign coal.  The September Newcastle spot price of export coal from Australia was just half what it was in 2011.  And as analysts increasingly predict a grim future for coal, the stock prices of U.S. producers have plummeted.

Clark Williams-Derry, deputy director of Seattle think tank Sightline, concluded simply: “The market is dethroning king coal.”

Coal Could Suffer Major Setback in the Deep South

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