At Powder River Basin in Montana, the coal is consistently high quality allowing export to America’s strategic partners such as Japan, South Korea and Taiwan, and helping to maintain steady supply chains. It is coal that developing nations would welcome. Yet, thanks to the environmentalist lobby, coal export terminal construction is a slow and often stop-and-go process. On the West Coast of the United States, there are currently three potential terminal sites pending approval that could otherwise export Montana and Wyoming coal to East Asia.
By Taylor Rose l August 18, 2015
The states of Montana and Wyoming together produce 44 percent of the United States’ coal and the overwhelming majority of coal in the American West. Though West Virginia and Kentucky are defined by their production of coal and the coal culture, Wyoming alone out produces both of them together.
It is from this coal production that the United States is able to generate low-cost energy and exports to the booming economies of East Asia.
Coal exports in the American West take two forms. First is through energy via coal-fired plants and the other is through exporting of coal from mines to consumers abroad. Though the American West produces more coal than Canada, the West Coast of the United States has no coal exporting ports.
If coal mined in the various areas of the American West is to be exported, at present it must be sent to Vancouver, Canada, where it waits in line, often behind Canadian coal, for export to Taiwan, South Korea and Japan.
Rick Custinger, the Media Manager for Cloud Peak Energy based in Billings, Montana states “the real constraint on coal growth in Montana is in export terminal capacity.”
There is another exporting facility farther north in Prince Rupert, Canada at the Ridley Terminal, but given the low cost of coal it is not cost effective to extract the coal from Montana and send it north to Ridley Terminal.
At Powder River Basin in Montana the coal is “extremely high quality and extremely consistent” and this coal is exported to “America’s strategic partners such as South Korea and Japan,” helping to maintain steady supply chains. It is coal that developing nations would welcome. Yet, thanks to the environmentalist lobby, coal export terminal construction is a slow and often stop-and-go process.
On the West Coast of the United States there are currently three potential terminal sites pending approval that could export Montana and Wyoming coal to East Asia.
The first coal terminal is the Port Morrow project near Boardman, Oregon on the Columbia River, which was recently denied a permit for construction by the Oregon Department of State Lands in 2014. If constructed, the facility would have exported “8.8 million tons of coal annually to Asia” according to OregonLive, with coal from the Powder River Basin in Wyoming and Montana.
This denial of port construction in Boardman leaves room for the Gateway Pacific Terminal at Cherry Point, Washington and the Millennium Bulk Terminal at Longview, Washington on the Columbia River. Custinger says Cloud Peak Energy sees “the Gateway Pacific as great opportunities “for exporting to Asian economies.” He adds, the economies of east Asia have growing economies and “a growing demand for Powder River Basin coal. Because of its consistency and of its low sulfur content and it helps those counties diversify their energy supply chains.”
The Gateway Pacific terminal is currently waiting approval on a permit for construction, while the “U.S. Army Corps of Engineers, the state Department of Ecology and Whatcom County are conducting coordinated environmental reviews of the Pacific International and BNSF applications under the National Environmental Policy Act (NEPA) and the State Environmental Policy Act,” (SEPA) according to the state of Washington.
The Millennium Bulk terminal is also pending approval, while the environmental review is being conducted by the state of Washington and is expected to be completed by November 2015. If approved, the terminal could handle 44 million metric tons of coal annually. The terminal approval process is also delayed thanks to a legal challenge filed by various environmental groups against the terminal construction.
For Custinger the solution is simple, “In order to meet the demands of customers in Japan, South Korea and Taiwan, we need to expand export terminals.”
He adds “America is going to continue to use coal for decades to come. It is a good source for low cost, affordable electricity, which is critical for families to keep the lights on and their costs low and it helps American manufacturing.” The major pending question going forward is, “are the economic demands of these counties going to be met with coal from the Powder River Basin or coal from Indonesia or Russia?”
“For if these terminals could be approved, the tax revenue generated would help immensely with funding infrastructure development in Montana, Wyoming and Washington.”
Taylor Rose is a graduate of Liberty University with a B.A. in International Relations from the Helms School of Government. Fluent in English and German he has worked and studied throughout Europe specializing in American and European politics. He is a prolific writer and author of the book Return of the Right an analysis on the revival of Conservatism in the United States and Europe. He is also a contributor to SFPPR News & Analysis.