Washington cuts coal use, gains potential as exporter

The sandy black gold arrives by rail every day and piles up in giant mounds on a spit just off shore. From there, it’s loaded onto ships bound for Asia.

Last year, the seaport just across the U.S. border in Delta, B.C., shipped 27 million tons of North American coal abroad. It’s the busiest coal-export operation on the continent, the only one along the West Coast outside Alaska.

Perhaps not for long.

Two companies are pushing to make Washington state a major player in the international coal trade. One has sought to ship up to 60 million tons of coal a year from refurbished docks near the Columbia River’s mouth. The other plans to build a major shipping terminal near Bellingham and has a contract to export 24 million tons of Rocky Mountain coal a year.

Gov. Chris Gregoire, striving to reduce Washington’s carbon footprint, this month signed a deal with owners of the TransAlta power plant in Centralia to shut down its two coal-fired boilers by 2025. Those boilers account for 10 percent of Washington’s share of the greenhouse-gas emissions that contribute to climate change.

But just as Washington weans itself from coal, it could be positioned as the nation’s leading exporter of the fossil fuel.

The possibility has sparked a fierce debate: If coal is so dirty that Washington shouldn’t use it, should the state be a conduit for shipping it overseas? At a time of economic turmoil for the state and nation – when the U.S. trade deficit with China tops a quarter-trillion dollars a year – can Washington afford not to?

Passions are inflamed. Environmentalists fear that hooking China and India on a diet of cheap, dirty American energy could spell disaster for efforts to rein in global carbon-dioxide emissions.

“It’s a terrible, unprecedented idea,” said Brett VandenHeuvel, executive director of the nonprofit Columbia Riverkeeper. “If we supply China with a large and inexpensive source of coal, then they’re more likely to just keep burning it.”

When Cowlitz County late last year granted a shoreline permit for Millennium Bulk Logistics, a subsidiary of Australia’s Ambre Energy, to build a coal-shipping terminal in Longview, VandenHeuvel and others appealed.

Almost immediately, Montana Gov. Brian Schweitzer showed up in Washington and professed frustration over the controversy. His state helped supply TransAlta’s coal for years, and several other Washington utilities have owned a piece of a coal-fired power plant in tiny Colstrip, Mont.

“It’s difficult for me to understand, since Washington state and your utilities invested in coal-fired plants in south-central Montana for three decades,” Schweitzer said in an interview. “You’ve been digging our coal, burning our coal, and building your economy on our coal for years.”

The debate is complicated by what’s happening across the Pacific. China has committed to cleaning up its energy. It is developing wind, solar and geothermal technology and is mandating strict pollution controls on power plants.

But nearly 70 percent of its power comes from coal, and that won’t change soon. China has built or has plans to build more new coal-burning capacity than exists in the entire United States now. That’s in addition to plans for dozens of nuclear-power plants, development of which were put on hold after the Japanese nuclear disaster.

Some experts suggest that instead of fighting, the U.S. should accept coal’s growth as unavoidable – and focus more resources and research on cleaning its emissions.

“It’s a paradox,” said Charles Ebinger, director of the Brookings Institution’s energy policy initiative. “The Chinese are really moving vigorously on green technology, but Asia is growing so fast that demand for energy of all forms is going through the roof.”

The proposed export terminals are so big they would be controversial even without coal.

In Bellingham, SSA Marine would erect a large terminal near Cherry Point to ferry bulk goods such as grain and potash abroad. Because water there is deep and the destination is Asia, the dock could accommodate the world’s largest ships – too big for the Panama Canal.

“The real benefit of that is the economies of scale,” said SSA Marine spokesman Bob Watters. “Fewer ships coming in is all-around better for the environment.”

SSA Marine hopes the project will be operational by 2015. It has signed a contract with Peabody Energy to export Powder River Basin coal from Montana and Wyoming.

In Longview, meanwhile, Millennium’s parent company presented itself as a good neighbor, promising family-wage jobs – more than 70 to run the dock, 120 during construction – while taking over a poorly run port site. It sought to export 5 million tons of coal a year.

But internal company memos recently made public suggested the company always intended to seek to expand as soon as its permits were in hand. One memo from Ambre executives said the company ultimately planned to export 60 million tons of coal a year. An email urged company leaders to keep the plans secret.

“We are (at) too sensitive a juncture to raise the plans to build a second berth,” it read. “The community is small and the risk to the current permit path is too large.”

State regulators and Cowlitz County commissioners were furious, and this month, Millennium withdrew its plans, effectively ending environmentalists’ appeal.

But the company concedes it expects to resubmit its plans later, and environmentalists may intercede again.

The heart of this fight is the future of coal and who’ll supply it – and at what cost.

“I think the whole theme of ‘are we just shifting problems elsewhere’ is a growing political concern,” said Joel Darmstadter, an energy and climate analyst with Resources for the Future, a Washington, D.C., think tank.

“That theme has even surfaced on the part of the Chinese themselves, who say we’re being sanctimonious about our concern with the environment, given that a third of our energy still comes from coal and we consume the products China makes with its cheap energy,” he said.

In fact, coal use in the U.S. is not really growing – but coal mining is. Just last week, the federal government agreed to lease access in the Powder River Basin to an additional 750 million tons of coal.