Archive for the ‘Gulf Coast Coal Export Terminals’ Category

CT-JoReprinted from CleanTechnica
July 4th, 2016
by Tina Casey


cleantechnica 1Now what, indeed. The domestic market for US coal has been shrinking faster than you can say Clean Power Plan, and now it appears that the door is shutting on the export market, too. In the latest development, last week the US Interior Department announced a new rule aimed at closing off a coal royalty loophole. The loophole enabled exporters to pocket millions in revenue that could have gone back to the taxpaying public.

The Coal Royalty Loophole

The new rule comes under Interior’s Bureau of Land Management. It is included in a new regulatory package that also covers oil and gas as well as coal leases on federal and American Indian lands.

We’re zeroing in on the coal royalty rule because it has been the focus of considerable attention by regulators and industry observers, especially as applied to coal from federal lands in the Powder River Basin of Wyoming.

The region is home to the largest coal reserves in the US, as illustrated by this recent snapshot of federal coal leases:

cleantechnica 2The coal royalty loophole has been described in detail by a series of reports in Reuters, which trace the scheme to a 2003 loophole that applied only to natural gas exports. Coal industry stakeholders have argued that the Interior Department gave it the go-ahead to apply that regulatory framework to coal exports in 2009.

The scheme worked by using affiliated brokers to buy US coal at artificially low prices, then sell high in coal-hungry Asia. US taxpayers received royalties based on the lower price, not the higher price.

By 2011, the Interior Department was well aware that US taxpayers were getting the short end of the stick. At least one regulatory reviewer argued that the coal industry clearly misapplied the 2003 natural gas loophole, and the agency began taking steps to tighten up its regulations.

In the meantime, in February 2013 the Interior Department launched an investigation into the practice on the request of US Senator Ron Wyden (D-OR), chair of the Senate Energy and Natural Resources Committee.

Aside from the lost revenue, US taxpayers are also left holding the bag for the environmental impacts of coal extraction and transportation, so there’s that.

Closing The Coal Loophole

The new coal royalty regulations took a while in coming, but they’re finally here under the moniker of “Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform Rule,” which took effect on July 1.

The rule was last updated in the 1980’s, which is where the modernization comes in. Here’s the money quote from Interior:

…the rule reaffirms that valuation, for royalty purposes, is best determined at or near the lease and that gross proceeds from arm’s-length contracts are the best indication of market value.

The rule specifically eliminates non-arm’s-length sales (that’s regulatory parlance for transactions with a hidden agenda) between affiliated companies as a benchmark for valuation. Instead, valuation is based on gross proceeds from the first arm’s-length-sale, which generally means the sale closest to the lease.

The idea is to ensure a more accurate valuation of the actual coal marketplace, rather than continuing the historically difficult task of benchmarking transactions down the line.

The End Of Coal: But Wait, There’s More

The new rule puts another dent in the profitability of the US coal industry, and BLM isn’t finished yet. In a press release announcing the new rule, BLM reiterated its intent to fold public health and environmental impacts into the federal coal program. The review, now under way, was motivated in part by “many concerns” raised during the public comment period for the coal rule:

For that and other reasons, Interior recently launched a comprehensive review to identify and evaluate potential reforms to the Federal coal program in order to ensure that it is properly structured to provide a fair return to taxpayers and reflect its impacts on the environment, while continuing to help meet our energy needs.


The coal industry is also facing pushback from other federal agencies. Most notably that includes the Environmental Protection Agency, but the US Army Corps of Engineers has also stepped into the fray.

Earlier this year, the Army Corps halted the permit process for a key coal export terminal in Washington State. The agency based its decision on the relatively narrow issue of treaty rights with Native American tribes in the region, but it also evoked a set of environmental principles that date back to the early years of the Bush Administration.

Whither Coal?

We’re not saying that the US coal industry will eventually vanish from the face of the earth — for that matter, BLM is still issuing new leases in the Powder River Basin — but it will play a marginal role in the sparking green future.

Over the short term, the domestic market for US coal has been hit by competition from low cost natural gas, a fuel that is “cleaner” at the burn point but is also fraught with public health and environmental issues including water and air pollution, greenhouse gas emissions and other side effects including earthquakes.

A more sustainable approach to energy management is well under way with the growth of renewable energy, energy storage, energy efficiency, transmission infrastructure, “smart grid” technology and related fields.

There is also a movement afoot to revive nuclear energy as a key element in low-carbon economies, spearheaded by billionaire Bill Gates, founder and chair of the nuclear company TerraPower.

If you have some thoughts about that, drop a note in the comment thread of the original story.

Follow Tina Casey on Twitter and Google+.

Images: via US Bureau of Land Management.

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Environmental advocacy group members of the Clean Gulf Commerce Coalition (CGCC) filed suit against the United Bulk coal export terminal in Davant for violating the federal Clean Water Act.

Coal Export Terminal Pollution on the MississippiThe terminal, owned by United Bulk Terminals Davant LLC, has operated for more than four decades, shipping millions of tons of coal and petcoke – an oil-refining byproduct with high levels of arsenic, mercury and other toxins hazardous to human health and aquatic life – every year to overseas markets.  But before they are shipped, that coal and petcoke sits in huge, open piles along the river, and blows right into the river and the wetlands when there is rain or wind.

Officially, the Gulf Restoration Network (GRN), Louisiana Environmental Action Network (LEAN) and Sierra Club are the parties that filed the suit in New Orleans’ U.S. District Court for the Eastern District of Louisiana. The groups, represented by Tulane University’s Environmental Law Clinic, are members of the Clean Gulf Commerce Coalition (CGCC), which is working to clean-up existing coal terminals in the Gulf Coast region, stop any new coal export terminals, and promote cleaner, safer industries and jobs.

The suit contends that United Bulk has illegally discharged coal and petcoke into the river every day that it has operated for at least five years. It points out that coal and petcoke have been discharged into the river in enough quantities to produce visible spills on a regular basis. The suit also cites the EPA’s determination that storm water runoff from coal piles “can flush heavy metals from the coal, such as arsenic and lead, into nearby bodies of water.”

The international market for U.S. coal has also grown increasingly volatile. Port authorities on the West Coast and in Corpus Christi, Texas have concluded that the coal export market is simply too risky to invest significant sums in new or expanded shipping facilities.

For more information, check out The Clean Gulf Commerce Coalition’s website.


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NBC news reports a spike in air pollution readings over 20 times the recommended exposure levels suggested by the World Health Organization (WHO) in Beijing on Thursday, cloaking China’s capitol in a thick, gray haze .  Click here to read the NBC story.

The resultant air warning was just the first of 2014. In January 2013, China suffered through a week of sustained poor air quality that finally forced China’s ruling Communist Party to acknowledge and address serious environmental issues, including the country’s extensive use of coal-fired power plants..

As the United States reduces its use of coal to power electric plants, the coal industry has been looking to increase exports to countries like China and India.  However the environmental and health impacts as well as the economic realities of propping up this industry paint a bleak future for this centuries old fuel source.

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The third and final major new coal shipping proposal at the Port of Corpus Christi has been canceled, according to documents from recent Port Authority meetings reviewed by the Clean Gulf Commerce Coalition, a multistate campaign to halt expansion of coal exports from the Gulf Coast while promoting clean energy and businesses, that includes Public Citizen.

Check out ThinkProgress.org’s story that resulted from our post by clicking here.

Ambre Energy, a major Australian coal company struggling with the poor global market for coal, has terminated its lease and will not pursue development of the project. The failure of each of the major new coal export terminals in Texas casts further doubt on the viability of the international coal market and new export facilities in Gulf Coast ports.

According to minutes from a recent Port Authority meeting, “The coal export market has dramatically declined in the last three years and Ambre no longer considers a coal export terminal viable in this area.” (click here to read the minutes, this quote is from page 173)

“This is the third coal export project that has been canceled in this region,” said Hal Suter, chair of the Lone Star Chapter of the Sierra Club and a lifelong Corpus Christi resident. “Ambre’s failure is a huge relief for Corpus Christi residents and it’s a clear sign of an accelerating shift away from coal. Texans don’t want coal, Gulf states don’t want coal and international markets don’t want it either.”

In August of this year, New Elk and its parent company, Cline Mining Corporation, terminated their lease for a planned coal export terminal, and development of the La Quinta Trade Terminal was put on hold after grassroots activists rallied against it and Sierra Club released a report in early 2012, The Port of Corpus Christi Gambles on Coal Export Development.

Along with financial troubles, the coal export industry faces resistance from community and environmental activists concerned about air and water pollution from coal dust and added rail and barge traffic. Coal-fired energy is also a primary cause of greenhouse gases, which  lead to climate disruption, extreme weather and rising sea levels.

“The people of course Corpus Christi have said no coal – no way,” said Tom “Smitty” Smith, director of Public Citizen’s Texas office. “So the coal barons are beginning to pick on small communities, like Point Comfort about 60 miles north of here.”

The Texas Commission on Environmental Quality (TCEQ) has made a preliminary decision to approve an air permit for a facility that will store, import and export coal, petroleum coke and limestone through Point Comfort.

The Corpus Christi Port Authority meeting minutes also predicted a poor future for coal exports.

“Currently, the export coal market has shrunk substantially,” the minutes reported. “The domestic market has seen older coal-fired power plants closed with some being refitted to burn natural gas. Wind and solar power…have created additional pressure on coal.” (Click here to read the minutes, this quote can be found on page 48)

Ambre Energy has encountered obstacles in trying to develop coal export terminals in the Pacific Northwest as well. Last week, the company’s shareholders allowed Denver-based Resource Capital, a private equity firm, to increase its ownership stake in the company to avoid insolvency.

The coal industry has tried to offset the move away from coal-powered energy in the United States by stepping up exports, particularly to China. But recently China, too, has begun to shift away from highly polluting coal. Over the summer, China announced a ban on construction of new coal-fired plants around the cities of Beijing, Shanghai and Guangzhou to control air pollution.

The Clean Gulf Commerce Coalition, a multistate campaign to halt expansion of coal exports from the Gulf Coast while promoting clean energy and businesses,
includes Gulf Restoration Network (GRN), Air Alliance Houston, Louisiana Bucket Brigade, Louisiana Environmental Action Network (LEAN), Public Citizen, Sierra Club, and SouthWings.

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Community and environmental organizations filed suit today against Louisiana’s Department of Natural Resources (DNR) for illegally approving a coastal use permit for the proposed RAM coal export terminal on the Lower Mississippi River in Myrtle Grove.

The suit, filed in Louisiana’s 25th Judicial District Court, argues that the DNR did not consider potential alternative sites or fully weigh the negative environmental and public health impacts of the proposal against its questionable economic benefits. DNR’s decision to issue the permit “was arbitrary and capricious and in violation of Louisiana law,” the suit says.

The suit – filed by residents near the proposed site for the terminal, Gulf Restoration Network (GRN), Louisiana Environmental Action Network (LEAN), and Sierra Club – also asks the court to vacate the permit and require DNR to conduct a legally sound review.  Click here to read the suit as filed.

LEAN Executive Director Marylee Orr, explained, “By approving the coastal use permit in September, DNR violated its legal obligation to protect the Myrtle Grove diversion project. The diversion is absolutely vital to coastal restoration. The RAM coal terminal would be built right next to the diversion, and it would send coal-contaminated water right into the wetlands that the DNR is supposed to be protecting.”

Adding further support to the legal argument, a document obtained by GRN through a public records request shows that even state agency consultants agree the proposed coal terminal would be detrimental to coastal restoration by lowering the amount of sediment available for restoration and transporting coal pollution into the wetlands. (For the complete report, go to:  https://healthygulf.org/images/PDFs/Ram%20Terminal%20Technical%20Model.pdf )

The report – produced for the Coastal Protection and Restoration Authority (CPRA) by the Water Institute of the Gulf and CPRA’s engineering consulting firm ARCADIS – said the RAM terminal could reduce sediment to the diversion “by nearly 17%,” resulting in a loss of 80,000 to 500,000 tons of sand over a decade.

“Coal terminals dump into the river regularly – painting the riverbank black with spilled coal and petroleum coke,” said GRN coastal wetland specialist Scott Eustis. “The state needs the Mississippi River and sand from the riverbank to restore the coast. Louisiana’s best scientists have demonstrated that the RAM terminal would take much needed sand from the river. Ignoring their findings is a black mark on our entire coastal restoration effort.”

The proposed terminal, which would be used to ship highly toxic coal and petroleum coke to overseas markets, would be near existing coal export terminals – United Bulk terminal in Davant on the east bank and the International Marine Terminal on the west bank. Both facilities produce plumes of coal dust that blow over residential areas, generating air pollution that has created serious respiratory problems for local residents.

“We have had these coal terminals dumped on us,” said Bryan Ernst, a resident of Wood Park in Plaquemines Parish. “The air around here is already filthy with coal dust, and some people get sick because of it. I worry about those who have asthma and other respiratory problems. Sometimes I’m afraid to let my grandkids go outside because of the problems with coal dust.”

“When you pollute the air and water in a community, you degrade the quality of life of the people living in it,” Ernst said. “Families in this area are committed to their communities. We love this place for its nature, for the fishing and wetlands.  But the coal dust pollution is making our home unlivable. The last thing we want is another coal terminal moving in.”

More than 140 local residents showed up for Aug. 14-15 hearings on the terminal, which were held in Davant and Belle Chasse. Everyone who spoke at the hearing was opposed to the terminal and most shared concerns about air and water pollution.

Public Citizen’s Texas office is part of a coalition that is working to stop coal terminal expansions along the US gulf coast.  Our major focus at this time is the RAM terminal and the Port of Houston expansion projects.

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Community and environmental organizations lodged a formal protest against the Louisiana Department of Natural Resources’s recent permit for a coal export terminal in the already polluted Plaquemines Parish corridor.

In a letter sent to LDNR Secretary Stephen Chustz, the organizations called for reconsideration of the coastal use permit granted this month, charging that the RAM coal  terminal would violate laws created to ensure that the state’s plan for coastal restoration plan is carried out.

The letter charged that “because LDNR did not adequately analyze alternative sites, LDNR cannot assess whether there are feasible and praticable alternative locations, methods and practices for use that are in compliance with the modified standard under the Coastal Use Permit regulations.”

The letter also argued that the RAM terminal conflicts with Louisiana’s Comprehensive Master Plan for coastal restoration. The terminal “will  severely impact wetlands and the $300 million Myrtle Grove with Dedicated Dredging Ecosystem Restoration Project…,” the letter said. (more…)

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Armstrong Energy is facing challenges from the market that may threaten the viability and profitability of its proposed coal export terminal in Louisiana, a new Public Citizen report (Armstrong Coal final report) finds. A failed company and abandoned export terminal would create significant costs for Plaquemines Parish.

In the report, “RAMming It Down Our Throats: Armstrong Energy Could Leave Louisiana Taxpayers Holding the Bag on Its Proposed RAM Terminal,” Public Citizen looked at Armstrong Energy’s financial condition and the effect of market conditions on the coal export company.

“Armstrong Energy is in hot water,” said Hillary Corgey, researcher for Public Citizen and the report’s author. “Between rising debt, market conditions unfavorable to coal, and climate change, the RAM Terminal may have a good chance of sinking, both in terms of its hurricane-prone location and the viability of the company.”

The RAM Terminal is to be built near the 150-year old community of Ironton in Plaquemines Parish, La., 30 miles south of New Orleans. The terminal is to be fully operational within two years of construction and ship 10 million tons of coal. Two hearings on August 14 and 15 attracted more than 100 residents who oppose the terminal’s latest push for permits.

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Residents and environmental activists in Plaquemines Parish, LA, filled the community center auditorium during Wednesday night’s permit hearing for the RAM coal export terminal proposed for the Lower Mississippi River just outside New Orleans.

Local residents turn up to a hearing on a proposed coal export terminal in Belle Chase, Louisiana.  120 strong compared to 12 the previous year.

Local residents turn up to a hearing on a proposed coal export terminal in Belle Chase, Louisiana. 120 strong compared to 12 the previous year.

Plaquemines Parish, a long strip of wetlands and small communities banked by the Mississippi, is already home to much industrial activity, including two coal export terminals, where coal sits in immense uncovered piles. Speakers at the hearing urged Louisiana’s Department of Natural Resources (DNR) to deny a coastal use permit for a third coal export terminal for various reasons.

Speakers said the RAM terminal that Missouri-based Armstrong Energy has proposed would add to the coal-dust pollution that already burdens nearby communities, as well as bring train traffic to the area. They said the terminal would undermine state efforts to restore disappearing wetlands by employing the Myrtle Grove Sediment Diversion, a project, still in planning stages, to deposit river sediment in the wetlands.

They said coal exported through the terminal would contribute to climate change, pointing out that low-lying Plaquemines Parish and the entire New Orleans area are particularly vulnerable to the extreme weather and rising sea levels that global warming and climate disruption brings. They also pointed out that the community would be buying into a shaky financial proposition by allowing the coal terminal to be built, since Armstrong Energy is amid deep economic problems.

In response to pressure from Plaquemines residents, officials scheduled a second permit hearing for Thursday at 6 pm in Belle Chasse, Louisiana.

“I am definitely in opposition to this terminal,” said Plaquemines Parish Councilman Burghart Turner, who represents Ironton and Myrtle Grove, communities adjacent to the location proposed for the RAM terminal. “With the IMT (International Marine Terminals coal facility) already just south of the community of Ironton, and with this additional coal facility north of Ironton, we would be choking out that community,” he said, referring to the pollution from coal dust and other industrial sources that burden the area.

“The folks in the Pacific Northwest have already said ‘no’ to these types of coal terminals, because they know the problems they present,” said Devin Martin, an organizer for the Sierra Club who lives nearby in New Orleans. “The coal companies are looking to the Gulf of Mexico because they believe we’ll be an easy target. They believe our political leaders won’t stand up – that they’ll be happy to have a dirty industry in their neighborhood, that communities don’t have the kind of voice to stand up to these kinds of projects. But communities in the area are already overburdened with pollution from coal dust and other industrial activity, and they have spoken up repeatedly that they don’t want any development if they can’t be assured it won’t degrade the air, water and quality of life.”

During the hearing, Martin also presented 600 petitions gathered from Louisiana residents, pointing out that opposition to the RAM terminal is present throughout state.

“The financials for Armstrong Coal, the parent company for the RAM terminal, are extremely shaky,” said Hillary Corgey, a researcher for Public Citizen Texas. According to the company’s prospectus, she said, “Their debt increased from 2010 to 2011 from $139.8 million to $244.8 million, and their revenue plummeted from 2009 to 2011 from $10.4 million to $3.4 million. Armstrong’s bond rating is considered a junk bond. That is from both Moody’s and Standard & Poor’s.”

In a joint letter submitted to the DNR during the hearing, state and national environmental groups urged the agency to deny the coastal use permit sought by Armstrong because the RAM terminal is in conflict with a state and federal program to build vital wetlands by depositing sediment from the Mississippi River.

The letter noted that the RAM Terminal could undermine the success of the Myrtle Grove Sediment Diversion by “polluting the water going into the wetlands” with coal and petcoke; both contain heavy metals, sulfides, and other toxic constituents that would harm aquatic species and impede the ability of marsh plants to take root in the newly restored wetlands.

The letter was signed by representatives from Louisiana Environmental Action Network (LEAN), Gulf Restoration Network, Lower Mississippi Riverkeeper, Sierra Club and Public Citizen.

“Our position is that DNR must deny this permit, as it’s inconsistent with the state’s master plan for coastal restoration,” said Scott Eustis, a coastal wetlands specialist for the Gulf Restoration Network.

“The Myrtle Grove Sediment Diversion is a $300 million project, the state’s premier coastal restoration project. There have been years of planning and engineering and there will be at least five to 10 more years of planning. DNR cannot permit a ship terminal in the location where the engineer for the sediment diversion says a barge is inconsistent. DNR has a chance to stand up for coastal restoration. We think that they must.”

Under Louisiana state law, the Coastal Protection and Restoration Authority (CPRA) must find that the RAM terminal is consistent with the state’s coastal management plan before the DNR approves construction of the facility. The CPRA, which expressed concerns about the terminal’s impact on coastal management in 2012, has not yet altered that opinion to find the terminal consistent.

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