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Originally published March 26, 2011 at 10:00 PM | Page modified May 19, 2012 at 8:59 AM

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Corrected version

Coal quandary as state plans to send dirty fuel overseas

Just as Washington is weaning itself off coal, two companies are pushing to make the state a leading exporter of the fossil fuel. That possibility has sparked a fierce debate: If coal is so dirty that Washington won't use it, should the state really serve as a conduit for shipping it overseas?

Seattle Times environment reporter

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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, this seaport just across the United States border in Delta, B.C., shipped 27 million tons of North American coal abroad. It's the busiest coal-export operation on the continent. There are no coal-export terminals on the U.S. West Coast outside Alaska.

Perhaps not for long.

Two companies are pushing to make Washington 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.

The timing is not without irony. Gov. Chris Gregoire, striving to reduce Washington's carbon footprint, this month inked 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 off 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 serve as 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."

More coal inevitable?

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. Between 2000 and 2016, China has built or has plans to develop more new coal-burning capacity than exists in the entire U.S. 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."

Local opposition

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 — those 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."

The site could employ 400 or more — nine times that during construction — and draw nine 125-car train loads or more of goods a day. The area is home to a depleted population of herring, and not far from an oil refinery, which leaves some worried about collisions and oil spills.

"We've done a lot of studying on herring, and there's more to be done," Watters said. "And there will be vessel-traffic safety studies."

Still, 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.

"There are memos going back and forth that are embarrassing and do not show adequate respect for the regulatory process," said Millennium CEO Joe Cannon. "I'm sorry for that."

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

China's energy future

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.

In Montana, Gov. Schweitzer said it's unfair that his state has little say about where it can go just because Montana doesn't have a seaport.

"What's next? Montana is known for producing some of the finest malting barley that's exported off the West Coast," he said. "Will somebody show up next month and say alcohol is a contributor to poor health and we don't support alcohol so you can't ship it from here?"

But Thomas Powers, an economist retired from the University of Montana who helped environmentalists with their legal challenge, said Wyoming and Montana coal is plentiful, cheap and easy to mine, which could stimulate international consumption. Making it easy for China to get U.S. coal may lead to more coal-fired power plants.

Powder River coal "is a major new source in that market, and is going to put downward pressure on coal prices," Powers said.

And KC Golden, with the environmental group Climate Solutions, said new coal plants are expensive. Once built they run for decades. And if such proposals in the eco-conscious Northwest sail through, that would send the world a signal.

"You don't make 50-year capital decisions (such as building new plants) unless you think you have the supply," Golden said. "Opening up a mainline from us to them is like sending a big bright thumbs up that it's OK. Once they make those decisions, we're toast."

Cleaner emissions

Not everyone agrees.

China, too, is blessed with coal. But its mines are dirty and dangerous and its rail infrastructure is so bogged down it's easier for coastal cities to import coal from overseas. If the fuel doesn't come from the U.S., it will come from South Africa or Australia or somewhere else, said Ebinger, at Brookings. The current best hope for cleaner Asian emissions is to effectively capture and store that carbon forever underground.

David Pumphrey, an energy expert with the Center for Strategic and International Studies, said that is still a pipe dream. The process remains prohibitively expensive. But he agreed our decision on coal exports "will make no difference in the amount of coal China burns."

And Mike Davis, an energy expert at Pacific Northwest National Laboratory in Richland, said arguing over which fuel is dirtiest isn't helpful.

Instead, governments should set hard clean-energy standards and let businesses figure out how to meet them. That's the way to draw research money and drive innovation to make things like coal cleaner.

"You can do renewables until the cows come home, but on a global scale, if we don't change emissions from hydrocarbons, you don't make a dent in the problem," Davis said.

Regardless, Washington is now a central front in the global energy debate.

If the two companies get permission to ship as much coal as they say they'd like, that would more than double American coal exports.

Environmentalists say Washington state law requires all ecological harm from a building project — not just from the physical structure, and not limited to inside state boundaries — be evaluated before permits are granted.

They say that means state and county regulators will have to consider carbon dioxide and other air-pollution issues in China before granting permits for any coal-export terminal.

The argument makes regulators uneasy.

"I don't know that that's the appropriate role for a government agency when you're talking about a commodity that's legal and something that people are allowed to trade in," said Janice Adair, with the Department of Ecology, who leads a state initiative to reduce greenhouse-gas emissions.

But on one thing all parties seem to agree.

"We know that it's a big decision and it's in our midst," Golden said. "And we know the likely consequences of getting it wrong."

Craig Welch: 206-464-2093 or cwelch@seattletimes.com

Information in this article, originally published on March 26, 2011, was corrected on March 28, 2011. A previous version of this story incorrectly suggested a coal-export terminal in Delta, B.C., was the only such operation on the West Coast outside Alaska. There is a smaller coal-export terminal in Prince Rupert, B.C. There are no coal-export facilities along the west coast of the contiguous U.S.

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