Utah Legislature: No Special Session Bailout for Bankrupt Oakland Coal Project
The Utah legislature completed its special session Thursday without allocating $20 million to bail would-be coal terminal operator Insight Terminal Solutions (“Insight”) out of bankruptcy, thanks to the work of a coalition of public interest and environmental activists formed less than two months ago after NCIO discovered and informed Utah allies that four counties hosting Wolverine Fuels’ coal mines planned to apply for state funds to pass on to Insight to keep it in CEO John Siegel’s hands. See Utah coal counties pledge $20 million in state money to help get Oakland port back on track and Will Throwing John Siegel a $20 Million Lifeline Buy Utah a California Coal Terminal for more background.
The high-powered Utah coalition included Alliance for a Better Utah, the Center for Biological Diversity, Utah Citizens Advocating Renewable Energy, the Sierra Club, Utah Physicians for a Healthy Environment, Sevier Citizens for Clean Air and Water, Stop the Polluting [Utah Inland] Port coalition, the Westside Coalition, the Audubon Society, Healthy Environment Alliance of Utah, Elders Rising, and other concerned citizens, including Utah coal country residents and former elected officials.
The coalition first set about stopping the Community Impact Fund Board (CIB) from disbursing $20 million to Insight. The CIB is charged with administering a $53 million “Throughput Infrastructure Fund,” established by the state legislature to allow community impact funds to be diverted to the Oakland coal port from public projects that address the intended purpose of the CIB: to assist communities impacted by mineral extraction on Federal lands within their borders.
The coalition circulated a petition, repeatedly questioned CIB staff about procedure, and attended the livestreamed August CIB meeting. They then prepared a press release and a press conference for August 31, days before the CIB’s September meeting, when the board would next be able to consider the four counties’ $20 million application. Meanwhile, the Salt Lake Tribune covered the developments and published an article by one of its leading columnists opposing the bailout.
Although the four county commissioners told Siegel they expected to send him the funds by October, the CIB seemed inclined to perform more careful diligence once their decision came under public scrutiny, likely delaying the funds too long for Siegel to hold on to Insight. Siegel’s lawyer then convinced the bankruptcy judge to wait for an August 20 special session of the legislature called to address the COVID emergency and its economic impacts, when Wolverine allies in the legislature planned to rush a $20 million bailout through a process that would sidestep the CIB.
The Utah coalition pivoted rapidly, meeting five times between the 12th and the 19th of August, emailing on the other days, contacting legislators, attending committee meetings, reworking and disseminating the petition and press release, rallying supporters to call their legislators, and reaching out to taxpayer groups able to pressure Republicans who regularly act as coal industry allies. The coalition monitored agendas closely and had speakers ready for a virtual press conference as soon as a bail out bill appeared.
In the end, although sources within the legislature informed coalition members that there had been a serious interest in granting the $20 million bailout in a legislative end-run, no such bill was introduced.
In fact, Rep. Brian King (D), the minority leader of the Utah House of Representatives, made a motion in the Executive Appropriations Committee to move the $53 million sitting idly in the Throughput Infrastructure Fund to the general fund where it could go to relief for rural counties hard hit by the pandemic and economic downturn. Republicans defeated King’s motion on a strictly partisan vote.
What does all this mean for OBOT and Insight Terminal Solutions?
It’s not clear yet. The $53 million is still in the Throughput Infrastructure Fund for now, awaiting an application by a Utah “interlocal agency” for a “bulk commodities ocean terminal project.” Because Siegel keeps coming up empty-handed, the bankruptcy judge may turn Insight Terminal Solutions over to its hedge fund creditor, Autumn Wind Lending. Autumn Wind has backers with plenty of liquid capital, but has given no public indication of its plans for the company should it secure management of Insight. Insight’s only asset is a sublease of OBOT’s ground lease, which is contested in dueling lawsuits between the City and OBOT, still in their early stages.
Two things are certain: No Coal In Oakland will continue working with allies — in the Bay Area, in Utah, and in Japan — to prevent the coal terminal from being built; and Utah just avoided throwing away $20 million.
The day before the legislature met, the Institute for Energy Economics and Financial Analysis issued a scathing report on the coal terminal’s prospects: Utah Bailout of Bankrupt California Coal-Export Project Would Likely Fail. The Utah coalition will be meeting soon to celebrate this week’s victory and get to work on next steps — stopping the CIB from granting the funds in the future and liquidating the entire $53 million Throughput Infrastructure Fund, freeing the money for much-needed projects benefiting Utahns.
Image credit: “Money Laundering”, in Public Domain thanks to TaxRebate.org.uk via Flickr (https://www.flickr.com/photos/59937401@N07/5857891936)