SSA Gateway Pacific Cherry Point Coal Terminal

Sounds wonderful, doesn't it? A brand new state-of-the-art shipping terminal that will initially employ over 1,100 construction workers and provide up to 150 to 200 full time jobs at completion?

Apparently, Governor Gregoire has given the project a nod, as have local elected officals. But before we get our hopes up, is the project feasible?

One of the first serious obstacles to the project emerges north of Everett, where the existing rail road tracks along Chuckanut Drive can not be expanded. Granted, Mt. Vernon will notice the increased rail transport, But Bellingham and Fairhaven are particularly vulnerable to increased noise, dust, delays and disruptions from increased rail traffic. And, the project is in direct conflict with Washington's commitment to increasing passenger service. In fact, the state is in the process to putting $161 million in new federal grants in place to improve Amtrak service from Seattle to Blaine. The prospect of passenger trains sharing narrow tracks with mile long coal trains is fraught with additional opportunities for conflict.

Why choose Washington? U.S. Coal companies have identified Washington State, thanks to its proximity to coal rich states like Wyoming and Montana, as a good location for building a coal shipping terminal to ship coal to Asia. Wyoming and Montana currently mine about 500 million tons of coal a year. The proposed Cherry Point project has gotten a nod from local elected officials like Mayor Dan Pike and Freshman County Council member Tony Larson. But I'm not sure either elected official has taken a hard look at the factors that adversely affect this proposal.  

Last November, Millennium Bulk Terminals LLC, a subsidiary of Australia-based Ambre Energy Ltd., purchased the former ALCOA smelter site in Longview Washington, to build a coal shipping terminal. According to an article in the Wall Street Journal, Millennium plans to spend up to $100 million to construct the coal terminal, which local officials hope will bring over 100 construction jobs and 75 permanent jobs to Longview, a community that registered 12% unemployment in 2010. The Millennium terminal would handle five million tons of coal a year, after construction is completed in 2012.

In 2010, the U.S. Exported about 80 million tons of coal, mostly from the East Coast to the Gulf Coast. Industry analysts project that U.S. exports of coal will grow about 10% this year. Currently, coal is shipped out of a 30 year old faclity located at the Port of Vancouver, in B.C. Most of the U.S. Coal mines have multi-year contracts with Westshore.

David Gambrel, the President of Logisticon, a U.S. coal transportation consulting firm, reminds terminal proponents to take a lesson from the past before moving forward with the permitting and construction of new coal terminals on the West Coast . He reminds shippers and community leaders that two state of the art coal terminals were built on the West Coast during the last two decades. The first at the Port of Portland, was built and failed in the 1980's, with the facility owners “leaving barely used equipment that had to be sold.”

The second terminal, (LAXT) was completed in December of 1997 and closed its doors in 2003. The consortium that funded the project was aware of the Port of Portland's failure, but moved forward with the project, despite the warning signs. The LAXT facility was state of the art, “but it never made enough to pay the rent.” Gambrel said.

Gambrel reminds coal shippers that infrastructure changes that could affect the viability of a coal terminal are taking place world wide:

“massive changes that could adversely affect shipping costs and competition. Do we know about the expansion of the Panama Canal to permit passage of larger vessels, and the expansion of terminal capacities in Australia? What about the Columbia River Channel Deepening Project? What about the breath-taking speed at which Indian ports (i.e., Gangavaram) are being modernized to take larger vessels and more coal?”

The proposed SSA Gateway Pacific coal terminal project will have to undergo a rigorous environmental permit process which is likely to trigger an appeal from the Washington State Department of Ecology. A previous Shorelines Permit application for a Gateway Pacific terminal triggered DOE concerns regarding potential:

• Water pollution from stormwater runoff, incidental spills, airborne dust, bilge water discharge, introduction of foreign species, and industrial wastewater;
• Uncertain water supply for additional industrial development that would likely follow the GPT project;
• Adverse impact to fish and wildlife. Cherry Point is home to the state's single largest spawning herring population -- 50% of the resource-- which is critical for salmon and waterfowl;
• Catastrophic spills or major accidents involving ships and barges. Sixty percent of the cargo vessels (1,200 of 2,000) screened by the state's office of Marine Safety in 1995 posed high risk factors due to structural failures and safety incidents;
• Adverse impacts to existing commercial fishing activities; and,
• Limitation of public access and recreational amenities. 

In a press release dated June 18, 1997, former Ecology NWRO Director Mike Rundlett said, “the challenge with Cherry Point is to strike the right balance. Years ago, the upland area was zoned for industrial use. But the Cherry Point Reach is also recognized as a shoreline of statewide significance and by the county as a critical natural resource area. We hope that the applicant (Gateway Pacific) and other parties will be willing to look at options and ways to improve the proposal.”

It is important for Whatcom County leaders to acknowledge that the Department of Ecology has filed an appeal of the Cowlitz County permit and that a coalition of environmental groups: Columbia Solutions; Columbia Riverkeeper; Sierra Club and Washington Environmental County have filed a lawsuit against Cowlitz County and Millennium Bulk Logistice Inc.

A hearing is scheduled in April for Ecology's challenge to the Millenium permit which may provide Whatcom County with limited insight in regards to what Whatcom County can expect in regards to potential DOE environmental challenges for the SSA project. After all, 50% of the state's herring population spawns in Cherry Point waters.

Certainly, environmental concerns will figure prominently in the decision to permit the project. But the Cherry Point Terminal will create other untold headaches for the community. That is, if it is even feasible to attempt to build the project, considering the logistical limitations and the relentless international competition. 

For additional background information on proposed coal terminal facilities in Washington State:



Crosscut: http://crosscut.com/2011/01/07/environment/20522/How-great-corporate-power-shadows-Gregoire-on-caol-shipping

Wall Street Journal: http://online.wsj.com/article/SB10001424052748703399204576108640399166816.html

1997 WA State Dept of Ecology Press Release: http://www.ecy.wa.gov/news/.../97-115.html