Q & A

• Isn’t the proposed coal terminal going to ship “clean coal” or “EPA compliant coal”?

  There is no such thing as clean coal. There are several types of coal­­bituminous, sub­bituminous, lignite, etc. Each coal type has different chemical components­­for instance, some coal has lower sulfur content than other coal, some coal has higher ash content, and the like. However, more low sulfur coal must be burned to achieve the same energy output as other types of coal, thus increasing the carbon dioxide and other pollutants like mercury and ozone emitted from burning the low sulfur coal. Additionally, if a power plant has scrubbers that remove sulfur pollution, then there is no ecological benefit to low sulfur sub­bituminous coal. In fact, since the plant would need to burn more of that sub­bituminous coal to achieve the same energy output as other types of coal, the plant’s emissions of greenhouse gases and other uncontrolled pollutants would be increased. Much of the pollution from burning coal in Asia actually ends up back in California thus eroding the progress that we are making to reduce pollution here. A recent study noted that while California cut ozone emissions by 21% there was no drop at all in California in large part due to pollution blowback from burning coal in China. Mercury is another pollutant that travels to California from Asia. Mercury is a neurotoxin and bioaccumulates in the food chain within fish species, and can result in human fish consumption advisories. Several studies have looked at mercury emissions and transport of air pollutants from Asia to North America. Organizations like the World Bank note that burning more coal of any kind simply makes air quality, respiratory illness rates, climate change and other problems much worse. The proposed coal export facility at the Oakland Army Base Redevelopment would ship approximately 10 million tons of coal exports annually, which amounts to at least 26 million tons of carbon dioxide emitted each year. That amount of coal and carbon is the rough equivalent of 7 average size (500 MW) coal fired power plants.

• Wouldn’t the coal trains going to Levin­Richmond move through Oakland anyway? Why does it matter if Oakland also has a coal export terminal?

  The rail routes for the private Levin­Richmond terminal do NOT regularly move through Oakland. The Union Pacific rail lines serving the Levin­Richmond terminal move coal from Utah to Richmond via a Northern route through towns like Reno, Auburn, Roseville, Sacramento, and then Davis, Fairfield, San Pablo the community of Parchester Village, and Richmond.7 Or the route from the North could move from Sacramento to Stockton, Pittsburg/Antioch, Concord, Martinez, then San Pablo, Parchester Village and Richmond. There is a southern route via Las Vegas and the Central Valley cities of Fresno and Stockton that could theoretically be used that would pass through Oakland en route to Richmond, but given that the mileage is longer and more expensive, it’s not the preferred route. In addition, the volume of coal that is proposed to be shipped through Oakland is ten times the amount moving through the private Levin­Richmond facility and would entail significantly more train traffic. Further, according to a SEC filing made as part of an initial public offering the Utah coal company that proposed to ship coal through Oakland, Bowie Resource Partners, their contract with Levin­Richmond is expiring at the end of 2015. As such it is not clear whether coal shipments will even continue through Richmond. Claims that coal trains are already regularly passing through Oakland are rebutted in the comment submitted by Lora Jo Foo to the City in October which can be accessed here.

• Isn’t the coal facility proposed in Oakland supposed to be a new state of the art coal export facility that’s completely enclosed?

  We have seen no concrete design plans for this project because plans specific to a coal terminal did not undergo environmental review. At this point, we only have the rumors from the developer, CCIG, and its lessee, Terminal Logistics Solutions, as to what this facility would look like. There are no enforceable conditions or mitigation that would require any particular kind of technology or pollution control like covers, drip pans, bag houses or anything of the like. Current laws do not require coal or petcoke facilities to be covered in Northern California. Given that the developer is under no legal obligation to cover any part of the facility, and has already been dishonest about what the facility would ship, it would be easy for CCIG or TLS to decide to cut these supposed “state of the art” designs to reduce costs. However, even with supposed “state of the art” covered facilities, there are major pollution problems. Take for instance the proposed enclosed facility at the Port of Morrow in Oregon. Air modeling showed major exceedances of particulate matter and nitrous oxide (NOx) national ambient air quality standards. Both of these pollutants have significant human health effects. NOx are highly reactive gasses that can cause respiratory problems such as asthma attacks, respiratory tract syndrome, bronchitis, and decreased lung function. In addition to public health concerns, NOx emissions cause nitrogen deposition, which may cause soil acidification, water acidification, and eutrophication. These problems, in turn, reduce water quality and may render water unfit for aquatic life or human consumption. NOx also contributes to visibility impairment, global warming, acid rain, formation of ground­level ozone and formation of toxic chemicals. Similarly, particulate matter pollution has significant health impacts including premature death, “increased hospital admissions emergency room visits, absences from school or work, and restricted activity days,” due to aggravated cardiovascular and respiratory problems. Sadly, the populations most at risk are the sick, the elderly, and children. Further, even enclosed facilities must be ventilated, have water runoff and fire controls that involve coal dust moving to air and water. Without seeing design plans, it’s hard to make exact comments on the myriad of potential environmental impacts.

• Aren’t the coal cars going to be covered to stop the coal dust from coming out?

  No one has seen any specific design plans and there are no enforceable conditions for the facility and the trains. There are no covered coal trains currently in use anywhere in the U.S. or in the world to our knowledge. And even covered rail cars would likely need some sort of ventilation that would involve exposure to air and water, thus still allowing coal pollution and massive amounts of water use. Finally, the federal bodies that regulate rail would be the ones responsible for promulgating and enforcing any sort of covered trains rule­­the Federal Rail Administration or the Surface Transportation Board. It’s not something that the city could just simply require given the complex web of federal rail laws at play, the Interstate Commerce Termination Act (ICCTA) and a legal concept known as preemption. Some coal cars are “covered” with a hairspray­like substance called a topping agent or surfactant. The STB did approve the railroad’s use of those topping agents but they do not fully prevent coal dust loss, are not required to be used for Utah coal, are themselves pollutants because they wear off along the rail lines, and require massive amounts of water to apply. Finally, it is not certain that CCIG or TLS can even guarantee that coal rail cars would be covered or what they mean by covers. If by covers they mean using topping agents like surfactants, the above­mentioned concerns about coal dust loss, water use, and surfactant pollution are noteworthy. Surfactants do not resolve the problem. If they mean using a physical cover on the rail car, coal car ownership and leasing involves many parties like the railroad operators (BNSF or Union Pacific), the mine owner/operator, the coal terminal operator, and the final recipient of the goods abroad. All of these parties would need to coordinate efforts to implement a covered rail car system, which, again, is not in use anywhere in the US that we are aware of so is untested for coal. Normally it is the final goods recipient that leases the coal cars, not a terminal operator like CCIG or TLS. However, it is usually the mine owner/operator that loads the cars, and they would need to change their loading practices and invest in new loading equipment to accommodate covers on rail cars. In addition, rail regulatory bodies like the federal Surface Transportation Board and Federal Rail Administration are the two bodies responsible for rail regulation and their authority preempts that of a city council on rail issues so any party could challenge city council regulation on this issue.

• Will saying no to coal at this project mean that Oakland will lose jobs?

  Not at all, and other import/export commodities would actually mean better, more long­term jobs. The community groups opposed to coal in Oakland do not oppose the overall Army Base redevelopment project. The bulk/bulk­break terminal proposed at the site can ship other commodities like windmills and auto parts and other goods discussed in the original environmental review and funding documents, especially commodities that are associated with stable, long­term jobs. In fact, terminals that ship coal provide far fewer jobs than terminals that ship container or bulk­break materials (big machines like wind turbines, pallets, and the like). In addition, forcing the project to rely on a risky industry like coal as a business partner is a bad prospect for jobs or loan paybacks in the long run. Questions have been raised about the financial statements made by Bowie Resource Partners, the secretive Utah mining company behind the coal funding, that is currently undergoing an initial public stock offering. Bowie has likely been overly optimistic in discussing the growth of the international coal markets. Coal is a commodity that also poses danger to workers in close proximity to it on a regular basis. Prolonged, direct exposure to coal dust – studied especially in miners – has been linked to health issues such as chronic bronchitis, decreased lung function, emphysema, cancer, and death. It has also been shown to increase the risk of mortality from heart disease.

• Isn’t coal a major West Coast bulk commodity export where there is increasing demand? Wouldn’t Oakland be foreclosing itself to major economic opportunity by not considering coal?

  Quite the opposite. Coal is a commodity that is losing more market share in global markets each year. The coal industry­­at home and abroad­­is in dire straits due to new environmental regulations like the Clean Power Plan, low natural gas prices, and a surge in renewable energy. Several coal companies are declaring bankruptcy. Even companies with more Western­based mines are in trouble. Railroad giant BNSF says that coal­related infrastructure like railroads in major coal producing regions like the Powder River Basin are now considered to be “stranded assets” without the potential for economic recovery for their major investments made just a few years ago. Demand from Asian countries like China and India is weakening,and the international market for coal is generally volatile. China’s currency was recently devalued calling into question its ability to import foreign coal, in addition to new environmental pressures due to air quality concerns. Nationwide, there are several existing coal export facilities on the Gulf and East coasts, and less than 70% of the capacity was used last year. In the Northwest (which includes the existing Canadian ports,) even during peak coal exports in 2012 less than 14% of existing coal export capacity was utilized in the region. In reference to the two remaining Northwest coal terminal proposals on the US Side,one consultant noted that:“Global coal prices are extremely weak, markets are oversupplied. Major consumers of coal globally are rethinking their strategies and U.S. coal producers are in a state of financial disarray.” In July of this year, Morgan Stanley reported that, at the current international prices, 80% of US thermal coal exports are uneconomic. In terms of West Coast export capacity, the Port of Stockton, the private Levin­Richmond terminal and the Port of Long Beach ship small amounts of coal­­1­2 Million Tons­­in California. Other facilities had been proposed in Washington and Oregon, but 3 of the 6 have disappeared largely due to poor coal market conditions and major public opposition. Three proposals remain in Washington and Oregon, although one similar in size to the Oakland coal proposal has been put indefinitely on hold due to Oregon’s denial of a major permit, and a virtual halting of the other parallel permitting processes. Alaska has one small coal export facility that has seen dramatically decreasing shipments to Asia over the last 5 years.

• Won’t saying no to coal in Oakland mean that the project’s public financing is put at risk?

  No, if anything having coal be part of the project may jeopardize current and future public funds. The Oakland Army Base Redevelopment does have a lot of public money at stake. The project received $242.1 million in California Transportation Commission (CTC) Trade Corridor Improvement Funds (TCIF). TCIF funds are intended to “place[] emphasis on projects that improve trade corridor mobility while reducing emissions of diesel particulate and other pollutant emissions.” The agreements for TCIF funds involve the City, Port, CTC. The City committed to $54.4 million in matching funds which it had already raised. Private funding commitments from the developer are also needed in the total amount of $171.9 million. There is no requirement for the City or Developer to take the $50 million from the 4 counties in Utah to ship coal. To the contrary, based on what was said in the TCIF application documents about this project and the underlying purpose of these public fundstaking the coal money may actually put that funding at risk. Further sources of public funded needed by this project, like the funds governed by the Alameda County Transportation Commission, may be considering action that would preclude coal projects from being considered for funding. In 2012, the original TCIF funding agreement between the CTC and Port was revised to combine allocations into one $242.1 mil OHIT grant, adding the city as a grant recipient in addition to the Port,change the funding match deadlines, and expand the scope as to where TCIF funds could be used. According to the City Council documents approving this agreement revision on April 6, 2012, the city committed to $54.4 million in City funds to match TCIF funds, and had $35.5 million of those monies already in hand with the remainder of $18 million being the among “to be received by the City from the land sales to the recyclers and CalTrans, projects that are under contracts to be sold.” In addition to the city monies, a private match is required on the part of the developer of $171.9 million, as allocated between backbone infrastructure ($25.9 mil), recycling facilities ($46.6 mil), and the city logistics facility ($99.4 mil.) Importantly, neither coal nor any other fossil fuel was mentioned in the TCIF application, or in any environmental review document pertaining to the Army Base Redevelopment project. The funding application, in mentioning the Berth 7 export facility, describes the project as one that would be “converted to a modern bulk cargo marine terminal for movement of commodities such as iron ore, corn and other products brought into the terminal by rail….the terminal would also accommodate project cargo such as windmills, steel coils and oversized goods.” This violates TCIF Guidelines requiring disclosure of “the function of the proposed project within the corridor.” Finally, the project timetable shows a 2018 completion date. Funding timelines have changed multiple times with this project so if there is an issue in securing funding, it is possible to ask the CTC for an extension rather than take Utah coal money.

• I heard that building the coal export terminal will cost more than $250 Million? I thought the terminal was only supposed to cost $99 million?

  According to the CTC funding documents, the City Logistics and Bulk and Oversize Terminal are supposed to cost around $99 million to build and now sources are saying that the project will cost $250 million to build. In addition, for the Army Base as a whole, the developer is supposed to find $171.9 million in private matching funds for the project, not just the City Logistics and Bulk and Oversize Terminal. If shipping coal would more than double the cost of the proposed City Bulk and Oversize Terminal (increasing it from $99 mil to $250 mil), that may be another independent reason why shipping coal is a bad idea­­it’s a very costly prospect, not just for public health, but also for the City and taxpayers. Finally, given the bad prospects for US coal in the international market and the history of failure for West Coast coal export projects, the proposed development is a risky financial gamble for Oakland and its residents. There is a history of failed coal export facilities in Los Angeles and Portland where taxpayers were left on the hook­­ Los Angeles had to write off $19 million in capital investment and more than $90 million in expected revenue.