Prospects for coal exports dim in the Northwest

It’s also a place where environmental activists see a chance to have a say on climate policy when lawmakers on the other side of the country have stalled.

“We’ve had so many challenges with Congress on a number of issues, but we know locally we can do better and we can rely on our state decision makers to protect our families,” Kearns said.

In a recent surprise move, Democratic Gov. John Kitzhaber, who is running for a fourth term, said his Department of State Lands would decide by May 31 whether to issue Australian company Ambre Energy a permit it needs to build the terminal.

It comes after a push from environmental activists who are more aggressive and more active here. Billboards urging Kitzhaber to reject coal exports have dotted Interstate 5 for months, and the Sierra Club and other groups have held rallies.

After years of tiptoeing around the issue, Kitzhaber lately has been vocal in his opposition to the project, which would send up to 8.8 million metric tons of coal to Asia each year.

“It is time to once and for all to say no to coal exports from the Pacific Northwest,” the governor told the Oregon chapter of the League of Conservation Voters in April.

At one point, six coal export terminals were proposed between Oregon and Washington — Morrow Pacific is the last remaining one in Oregon, and Washington has two left. Washington has set an even higher bar for approval than Oregon, and export proponents are wary about those projects’ prospects.

Thwarting all those proposals would be a major victory for climate change, Kearns said. It would lock in place low-sulfur coal from the Powder River Basin in Montana and Wyoming, which is having an increasingly difficult time finding domestic customers as carbon emissions standards for new and existing power plants approach.

Export opponents say rejecting the terminal would protect tribal fishing areas along the Columbia River from coal dust pollution, the issue on which the separate state environmental and lands departments are focused.

But Liz Fuller, a spokeswoman for Ambre Energy, said the export project would alleviate the coal dust concerns. She noted that when the coal is hauled into Oregon, it is transported inside an enclosed storage area onto covered barges at the Port of Morrow in Boardman, in the eastern part of the state before it heads to the Port Westward, which rests on the Columbia River in the state’s northwest corner.

That aside, Fuller said the recent chain of events, including Kitzhaber’s comments, are worrying.

“It was new that he was more specific about our project,” she said. “We were disappointed about that, it’s fair to say.”

Fuller said, though, that Kitzhaber’s comments to the League of Conservation Voters did offer a little bit of comfort. She noted the governor said his agencies would follow the normal review process, which she took as avoiding how exported coal might affect greenhouse gas emissions.

Still, Fuller said she thinks Kitzhaber’s turn is a response more to the broader discussion of climate change, which has become prominent in the national political dialogue, rather than dialing into the local pollution concerns the state is considering.

“There’s this kind of gap between perhaps a perceived threat which I think is very easy to mitigate and then a threat that’s a bit further out which people can really wrap their heads around emotionally and intellectually. So the focus is on something that is really not so much a real issue,” she said.

Fuller argued that if Morrow Pacific were rejected, coal would be re-routed to British Columbia, lengthening the trip for Asia-bound coal.

Kearns is less convinced.

“They can try,” she said. “This is definitely the last gasp of the coal industry.”

The mining industry has made it clear it intends to export more frequently. It’s trying to make up for domestic losses in power generation, as cheap natural gas that’s been unlocked through hydraulic fracturing, or fracking, has chipped away at coal’s once-dominant position in electricity generation.

In 2012, the coal industry exported a record 126 million tons, and sent 118 million tons abroad last year. Since 2006, U.S. coal exports have more than doubled. But even that might have its limits, according to the International Energy Agency. Despite overall growth in Asian demand for coal, China is putting in place environmental policies that would restrain coal demand. Meanwhile, India‘s growth is slowing and European consumption may be temporary.

Hal Quinn, president of the National Mining Association, said in a June House hearing last year that Asian markets could do for the Pacific Northwest what export facilities have done for Alabama, Louisiana, Maryland and Virginia. He said export terminals in those states generated $5.5 billion of economic activity and support 45,000 jobs.

“The economic lift provided by coal exports in these states underscores the potential for other states, especially on the West Coast, to benefit economically from sharply rising coal demand from Asia,” Quinn told the Energy and Commerce Subcommittee on Energy and Power.

But Katie Sweeney, general counsel with the National Mining Association, downplayed the importance of the Pacific Northwest projects to the industry’s export strategy. Most coal leaving the U.S. goes through the Gulf of Mexico, she said.

“The Pacific Northwest is just one key area for exports. There’s a lot going out from the Gulf and a lot going out from the East Coast,” Sweeney said.

Still, coal from the Powder River Basin isn’t likely to make it down to the the Gulf Coast, through the Panama Canal and across the Pacific at a competitive price. Considering that Sweeney said the National Mining Association would likely join litigation if the Morrow Pacific project were blocked, the industry clearly has skin in the game.

So, too, do Oregon workers, said John Mohlis, executive secretary for the Oregon Building and Construction Trades Council, a union that supports the project. He said a rejection from the state could hurt investment in Oregon.

“It’s a fear of us in the building trade that some environmental groups can look at that and say, ‘We can grab ahold of this and use it,’ ” Mohlis said.

Fuller put it another way: “It’s really tough in this state to build any project that’s not windmills or teddy bears.”