Halting the Runaway Coal Export Train

Eric Shew News, perspectives

By Ross Macfarlane

This blog kicks off a series to offer some stories from the arc of the broad efforts in our region to stop coal exports off the West Coast. While the fight still continues, we have been successful so far. There is no one coal export campaign story because all who were involved brings a unique perspective and played varying roles. For example, we honor the stories from the courageous leadership of the Lummi Nation and other tribal leaders who convinced the US Army Corps of Engineers to deny the permits for the largest proposed coal terminal at Cherry Point, WA almost a year ago. We plan to publish more stories in this series and welcome submissions from other groups and friends who are involved in this amazing campaign.

In the Northwest corner of the United States and British Columbia starting in 2010, an unlikely network of activists, community leaders, tribes, ranchers, artists, business executives, health professionals, and residents of every stripe and background came together to halt a runaway train of coal export proposals that seemed completely unstoppable when it first roared into the region. Proponents touted coal shipments from the Powder River Basin of Wyoming and Montana to the booming economies of China and other “Asian Tigers” as huge job creators and a major economic development boon for the communities that would host the export terminals. The local permitting and land-use battles that ensued would eventually gain national and global attention.

While the saga’s finale cannot yet be told as several zombie projects stagger on, but huge shifts in public opinion, the political and legal landscape, and financial realities make proposals deemed inevitable now nearly inconceivable, with the same relevance to the region’s economy as “a typewriter factory or a Kodak film processing facility.”

This narrative focuses mostly on the opposition to coal exports in Washington and Oregon States. It only touches lightly on the struggles to prevent an expansion of coal exports in British Columbia and California, as well as the incredible coalition that came together in Montana and Wyoming to demand coal leasing and reclamation reform and successfully oppose the Tongue River Railroad, the Otter Creek mine, and other huge expansions of mines and mining infrastructure in the Powder River Basin.

Finally, the effort to stop coal export was only one front in a broader campaign to wean our economy from coal and move toward cleaner and more efficient energy. The effort to remove coal entirely from the U.S. power grid, which seemed nearly impossible when it started, has become one of the great success stories of the modern climate and environmental movement . Our work in the Northwest would not have been possible without being closely tied into that larger effort.

Cue the Juggernaut

To borrow a phrase from Herman Melville, the fall of 2010 was a “damp drizzly, November in [the] soul” for Northwest climate and clean energy advocates. The nation and world were still recovering from the Great Recession and all policy conversations revolved around the public’s concerns about the economy and jobs. Our high hopes for significant climate action at the federal level had run aground as the Senate refused to even allow debate on the compromise Waxman-Markey bill that had passed the House the prior summer.

Global efforts to drive a strong climate treaty had faltered in Copenhagen the prior December. In Washington State, then Governor Christine Gregoire had failed in two efforts to convince the state legislature to adopt a bill capping carbon pollution. Instead of passing new policies, our biggest legislative accomplishments consisted of fending off efforts to roll back our victories from the prior decade — the renewable portfolio standard, energy efficiency measures and clean cars. Midterm elections loomed, with early polls correctly forecasting further setbacks for climate and clean energy leadership at the federal and state levels.

In this context, it was almost darkly comic to learn that global coal companies had identified the Pacific Northwest as the perfect place to ship millions of tons of coal mined in the Powder River basin of Wyoming and Montana to growing Asian markets. The Powder River Basin contains one of the largest reserves of coal in the world, and the biggest US coal companies—including Peabody Energy, Arch Coal, and Cloud Peak—were trumpeting a “coal supercycle” to be powered by the growing demand for coal in China and other Asian economies. Prices for thermal coal skyrocketed as Asia recovered from the Great Recession and coal companies and consultants expected continued, straight-line growth in demand. The Northwest became the central focus for the coal companies’ export strategy due to a simple fact of geography: Washington, Oregon, and British Columbia provided the shortest rail routes from the Powder River Basin to deep water ports.

Even then, there were trouble signs for the coal industry. Local communities, organizations and national groups led by the Sierra Club, were scoring early victories in the formidable campaign to stop all new coal-fired power plant construction in the United States and to close existing plants. The United States Environmental Protection Agency had begun imposing new regulations to address greenhouse gas emissions and other pollution from the facilities. A handful of Wall Street analysts were already starting to view the US coal industry as a “dead man walking.”

The conventional wisdom, however, was reflected in the stock prices for the biggest coal companies, which soared toward post-recession peaks, and all of these corporations were borrowing heavily to purchase new assets and infrastructure to serve what they saw as huge growth markets in Asia.

The companies projected extremely optimistic timelines for permitting and construction in investor briefings Peabody’s then CEO Gregory Boyce explained the company’s strategic priority to open up West Coast ports to serve Asian markets this way:

“We’re in the early stages of a 30-year super cycle in global coal markets. . . . The real goal here is to see if we can’t get large volumes of Powder River Basin coal to Asia. ”

An ideal vision for coal executives, perhaps, but a deeply disturbing prospect for Northwest climate and clean energy advocates. Climate Solutions’ Senior Advisor KC Golden painted the specter of standing on the banks of the Columbia River and other Northwest waterways, “watching ships sailing out full of coal, passing ships sailing in full of solar panels and manufactured goods and lithium-ion batteries.” We recognized that our efforts to accelerate wind, solar and other renewables risked becoming mere “hood ornaments” on the fossil fuel economy if we stood passively by.

Our first inkling of the coming coal juggernaut came in September 2010 when we learned that Cowlitz County had fast-tracked permit approvals for an export project near Longview, WA with neither a detailed environmental review nor any public input. A company called Millennium Bulk Terminals, then wholly owned by Australian coal company Ambre Energy, announced plans to convert an old aluminum refining site to a coal export terminal.

Soon after, we learned that a Seattle-based company, SSA Marine, was teaming up with the Burlington Northern Santa Fe (BNSF) Railroad and coal giants Peabody and Cloud Peak to build what they hoped would become largest coal terminal in North America at Cherry Point in Whatcom County, tucked near the Canadian border in northwest Washington. Our newly forming, scrappy coalition unearthed reports and rumors of new proposals almost weekly, as coal and infrastructure development companies scoured the coastlines and pitched virtually every community and port district with rail access and a potential deep water harbor.

Their timeframes for completion were extremely aggressive, with the companies expecting to ship coal to Asia within a matter of months or, at most, a few years. The proponents were well-funded, hiring the best-connected lawyers, public relations firms, and lobbyists to sell a jobs and economic development case to elected officials and business organizations. They expected little, if any, serious opposition. Like invaders in a bad sci-fi movie, their overall message to concerned citizens boiled down to this: “resistance is futile.”

What’s a Nice Group Like You Doing in a Fight Like This?

From the moment we first learned about these proposals, we knew that they posed a clear threat to our regional identity and mission to make the Northwest a center for clean energy solutions. It wasn’t obvious, however, that Climate Solutions or other regional or national groups should try to stop these projects. For one thing, virtually everyone in government and business who had any knowledge of these projects assured us that their approval was just a formality and that opposition would be a waste of time.

As a Northwest clean economy nonprofit working to accelerate solutions to global warming, Climate Solutions had not been involved in many opposition campaigns or appealed permits for new infrastructure projects.

However, Climate Solutions had long recognized that our future depended on moving away from coal, since the black rock is the largest contributor to global warming pollution. We had helped pass emissions performance standards in both Washington and Oregon that effectively banned construction of new coal plants. At the same time these export proposals cropped up, Climate Solutions was one of several key groups in the middle of campaigns and negotiations that ultimately led to agreed shutdown schedules for the two coal-fired power plants in Oregon and Washington.

Despite the fact that Climate Solutions’ focus has always been the Pacific Northwest, we knew that the biggest challenge in addressing global warming was curbing the exploding use of coal in China and other growing Asian economies. In the early years of this century, China passed the United States as the largest global emitter of carbon dioxide, and the US Energy Information Agency predicted that it would account for almost half of world coal consumption through 2040. It was hard to see how we could stand idly by while the Northwest played a role in in accelerating that dystopian future.

Nevertheless, most of the conventional wisdom at the time held that it was a waste of time to stop fossil fuel projects from being built. Respected experts such as Harvard professor Robert Stavins argued that opposing fossil fuel mining and infrastructure projects would have no impact on climate or clean energy development and would distract activists from working to price carbon and increase demand for clean and efficient energy. According to this logic, only demand mattered, and Asia’s power plants would get their coal from some place regardless of our actions.

Despite these arguments, we and our allies made the decision to go all in. Coal is the largest global contributor to climate pollution, by far, and the amount of carbon dioxide emitted from the proposed coal terminals would be immense. For example, the coal shipped through just one terminal – the proposed Millennium Bulk terminal near Longview, WA – would emit 90 million tons of carbon dioxide each year, roughly equal to the greenhouse gas emissions from every other source in the state.

In the most simplistic terms, we articulated this as the first rule of holes: “if you are in one, stop digging.” The International Energy Agency made the argument in more formal terms in their World Energy Outlook 2011, identifying “lock in of fossil fuel infrastructure” as the make-or-break factor in our ability to address climate change and stay within the globally adopted targets. Coal export terminals–like power plants, pipelines, and other large infrastructure projects–require huge capital expenditures and have a useful life of 30 years or more. They typically are financed using “take-or-pay” contracts that commit miners to ship coal or pay large penalties. Any time society commits to building these kinds of projects they are effectively “locking in” decades of climate pollution. Put another way, we recognized that the first key to winning the battle against global warming comes down to this: “Don’t lose.”

In recent years, a growing consensus has developed supporting the need to focus on fossil fuel infrastructure and supply side issues, as well as policies that limit demand for coal and oil and promote cleaner alternatives. As articulated by Bill McKibben in his enormously influential 2012 Rolling Stone article, Global Warming’s Terrifying New Math, avoiding the most catastrophic impacts of climate change will require leaving most known reserves of fossil fuels in the ground.

A paper in the journal Nature quantitatively supported this insight, when a group of the world’s leading climate scientists demonstrated that over 90 percent of US coal reserves (as well as much of the world’s oil, natural gas, and other fossil fuels) will need to remain unburned if we hoped to meet the 2 degree C target for global warming. These concerns are fueling growing international cries for divestment and mounting fears in the financial community about stranded assets affecting the value of major fossil fuel companies.

Calculating the Climate Consequences of Coal Export

So what are the potential climate consequences of the proposed Northwest Coal export terminals? There are a lot of ways to approach this question. The Northwest sustainability think tank Sightline has estimated that just three of the proposed coal ports would have resulted in more global warming pollution than the Keystone XL pipeline.

Courtesy, Sightline Institute

A report authored by Professor Tom Powers analyzed the climate consequences of coal exports in economic terms: he concluded that providing cheap supply of US coal would reduce the price and increase demand for new coal-fired generation in China and other Asian economies. More recently, the Draft Environmental Impact Statement (DEIS) for the Millennium Bulk Terminal used econometric modeling to conclude that just that one project might result in an additional 37.6 million tons of greenhouse gas emissions, roughly the same as adding eight million cars to the road. Although these are huge numbers, they likely underestimate the total emissions from the coal terminals. The Millennium DEIS calculates that the coal shipped through the terminal would emit approximately 90 million tons per year when it is combusted in Asia: roughly equivalent to the total GHG emissions from all sources in Washington State—approximately 92 million tons per year. And even this figure only looks at burning the coal; it doesn’t account for emissions from mining the coal and shipping it halfway around the world. However you slice it, these are huge numbers.

While we didn’t have the benefit of these subsequent studies and were operating at the time as much on intuition as analysis, it was clear that the proposed coal terminals would have a huge climate impact. For that reason, Climate Solutions made the decision to join several other partners in forming the seeds of a coalition (what we later collectively named Power Past Coal) to oppose construction of new coal export infrastructure in the Pacific Northwest. At the time, it seemed a doomed effort. In the next installments of this series, we will share some thoughts on the diverse coalition and strategies that made this campaign so successful.

Next in the series:

“Fingers in the Dike”

Ross Macfarlane was Senior Advisor at Climate Solutions from 2007-2016, where he managed the business partnerships program and played a leadership role in the organization’s efforts to enact strong policy and move the NW Region away from fossil fuels.  Prior to Climate Solutions, Ross had more than 25 year career in environmental law and public policy.  Ross is a Fellow at Clean Energy Transition and a candidate for the Sierra Club national Board of Directors.