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Collection: Northwest Coal & Oil Exports

Understanding Lummi Opposition to Coal at Cherry Point

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The August edition of Whatcom Watch included a special eight page insert built around a long-form essay by Jewell Praying Wolf James, a master carver and a member of the Lummi Tribe. His piece should be mandatory reading for anyone trying to understand why the Lummi Nation is so bitterly opposed to a coal export … Read more

The Coal Export Bubble

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There’s been so much news on the coal export front of late—the massive scope of the proposed Gateway-Pacific terminal’s Environmental Impact Statement; the Lummi Nation’s unequivocal opposition to a coal terminal at Cherry Point; and recent revelations about the ongoing financial woes of coal terminal developer Ambre Energy—that it’s hard not to sense that Northwest coal export projects are on the ropes.

But perhaps the most important coal export story has gotten surprisingly little attention—the collapse of Pacific Rim coal prices. With the latest price decline, I think we can definitively call the hype over Northwest coal export projects for what it always was: a bubble.

But to see why the inflated hopes for Northwest coal exports were the product of a bubble mentality, you have to look at the long-term price trends.

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Another Shoe Drops for Gateway Pacific

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Cherry Point

Today, The Bellingham Herald has news that may be every bit as troublesome for coal exports as the EIS scoping bombshell that was dropped yesterday: the Lummi Nation is on the brink of formally opposing the Gateway Pacific coal terminal at Cherry Point, Washington.

If you’re a coal export junkie and want the details, go read the article.  But the main point is in the article’s lede paragraph:

Lummi Nation Natural Resources Director Merle Jefferson says the tribe is ready to send an official letter to the U.S. Army Corps of Engineers announcing its opposition to the Gateway Pacific Terminal project at Cherry Point – a move that could stop the federal permit process for the coal terminal dead in its tracks. [Emphasis added.]

Here’s a bit of background on the legal significance.

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Scope of Gateway Pacific Analysis is Bad News for Coal Industry

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Hot off the presses: the three “co-lead” agencies in charge of reviewing the proposed Gateway Pacific coal export terminal at Cherry Point, Washington have published the scope of their review. The major takeaway is that it’s bad news for the coal industry. The industry did win an empty victory with the Army Corps of Engineers, … Read more

Still More Bad News for Ambre

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Zepeda found guilty necessity defense Washington

The bad news for Australian coal miner Ambre Energy has been flying fast and furious for the past few weeks.

Back in late June came the revelation that the company’s Morrow Pacific coal export project faces high costs and dim financial prospects—which was inadvertently confirmed by the company’s North American CEO.

Then, at the very end of last week came news that the company is running out of time to settle its ongoing lawsuit with rival Cloud Peak, with whom Ambre co-owns the struggling Decker coal mine in southestern Montana. Worse, Ambre is clearly having trouble coming up with cash for the settlement.  From Matt Brown at the Associated Press:

More signs of problems have emerged with an Australian company’s bid to take over a Montana coal mine, as court documents reveal Ambre Energy has been unable to come up with more than $70 million in cash to close on the deal…

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Recent Coal Export Trends: Q1 2013

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We have new quarterly data in the latest coal report from the US Energy Information Administration, taking us up through the end of March 2013:

ScreenHunter_55 Jul. 09 11.24

Nationally, coal exports notched up after two consecutive quarters of decline. The US shipped nearly 32 million tons of coal in the first quarter of 2013. That’s a lot by historical standards.

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More Evidence of Morrow Pacific’s Financial Weakness

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A few weeks back, we released a report on the shaky economic fundamentals of Ambre Energy’s Morrow Pacific coal export project. In a nutshell, documents released by Ambre Energy, the project’s developer, make the project look like a dud. By handling coal at two separate port terminals, Morrow Pacific incurs higher costs for transportation, operations, and capital than its likely competitors. In fact, the costs are so high that it’s not clear that Ambre could make any profit whatsoever selling coal into Asian markets.

But apparently we’re not the only ones saying that Morrow Pacific’s finances are dicey. The project’s chief executive is saying the exact same thing.  A recent story in Platts Coal Trader, a subscription-only industry journal, quoted Ambre Energy’s North American CEO admitting that the project can’t make money unless international coal prices rise substantially:

What You Can Do About Oil-By-Rail in the Northwest

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Editor’s note: this blog post was updated on February 19, 2014.

Yesterday Sightline published a new analysis on all the oil-by-rail projects planned and underway in the Northwest. The breakdown looks like this:

ScreenHunter_288 Feb. 20 10.00

Focus on the second-to-last line. The Tesoro/Savage project at the Port of Vancouver, Washington, is huge. At 360,000 barrels per day, it’s bigger than many pipelines. It’s nearly as big as all the other projects put together.

And it’s not a done deal.

The Port’s first public meeting with the project proponent is this Thursday, June 27th at 9:30 a.m. Columbia Riverkeeper is encouraging people to attend and raising tough questions about the plans.

There are, indeed, some puzzling dimensions of that project.

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Morrow Pacific: The Economics Just Don’t Work

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Report-thumbA few months ago we reported on the shaky finances of Ambre Energy, Ltd, the Australian firm that’s at the center of two of the three remaining coal export terminal proposals in Washington and Oregon. Ambre’s finances paint the picture of a struggling, high-risk start-up: by the end of 2012 the company had burned through well over a hundred million dollars of its investors’ money, accumulating massive debts and obligations in the process, yet still hadn’t cobbled together even a hint of a profitable business.

But if the company’s recent financial disclosures are accurate, our earlier report just scratched at the surface of Ambre’s financial woes. Our brand-new look at the finances of Ambre’s Morrow Pacific coal export project suggests that one of the company’s export proposals is in deep financial trouble, because it faces:

  • Higher transportation costs than any nearby competitor;
  • Higher handling costs than existing coal terminal projects in the region; and
  • Greater capital costs than comparable export terminal projects.

For more details, read on…

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Rick Larsen Flunks Arithmetic

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I’m going to be charitable and assume that Congressman Rick Larsen (or someone on is staff) is confused, misinformed, or really bad at arithmetic.

Here’s what he wrote to a constituent concerned about the coal export terminal proposed for Cherry Point:

According to project proponents, at full capacity the Gateway Pacific cargo terminal facility could result in 2 to 18 additional trains travelling [sic] through Bellingham per day in either direction.

It’s hard to know what to do with this.

There’s simply no disputing that, at full capacity the site would result in 18 trains per day, at minimum. That’s what’s in the official documents of the project proponents. (See page 4-51 here and numerous other places, but note that the proponents like to give figures only for loaded trains.)

How on earth Larsen gets to two trains is beyond me. It’s beyond logic too.

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