Coal export plan suffers setback in Oregon

A state agency rejects a plan designed to ship coal to Asia.
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Ambre's Port of Morrow project (right) has been rejected, creating doubt about its project at the Port of St. Helens farther down the Columbia.

A state agency rejects a plan designed to ship coal to Asia.

An Oregon agency created a major setback Monday for plans to build a complex coal project on the Columbia River upstream from Portland.

The Department of State Lands (DSL) denied a removal-fill permit for a small area of state-regulated waters on a site along the Columbia River where Ambre Energy would place parts of a dock and conveyor system used to transfer coal. The system would unload coal from Union Pacific rail cars to dry land storage on the Port of Morrow at Boardman, about 160 miles east of Portland.

From the storage area, the coal would be loaded onto Columbia River barges and shipped downstream past Portland to the Port of St. Helens for transfer to ocean-going ships bound for Asia. The transfer-of-coal project has been in the works since 2011, and has had eight extensions of its DSL permits. Other permits are still pending with the Corps of Engineers and Oregon Department of Environmental Quality.

The DSL permit may make those other permit decisions moot — or not. Ambre spokesperson Liz Fuller responded in an email, “We disagree with this decision. We are evaluating our next steps, and considering the full range of legal and permitting options.” Ambre could appeal to a state administrative law judge.

The ruling was termed a “good decision” by one of Ambre’s most persistent critics, Columbia Riverkeeper’s Brett VandenHeuvel. “Too much impact on salmon, recreation and not strong enough public need,” was his assessment. “Oregon’s leaders chose clean water and the salmon fishery over dirty coal,” VandenHeuvel told Crosscut.

The project would transfer 8.8 million tons a year from rail cars to a storage yard for loading onto river barges. The barges would transit three Columbia River locks en route to St. Helens, downstream from Portland, for loading onto ships bound for Asia.

The process would mean about 50 barge trips a week (full and returning); the barges would be connected in tows of four barges each. An estimated six ships a week (full and empty) would cross the Columbia River bar to the Pacific Ocean. Much of the opposition to the Port of Morrow project, called Coyote Island, has centered on the river traffic; the Columbia is already heavily used to barge grain from Eastern Oregon and Washington to downstream elevators. Critics have also predicted an impact on the Columbia’s appeal to tourists; the river supports a large wind-surfing community as well as traditional commercial and recreational fishing.

Ambre Energy, parent of Coyote Island Terminal, says the overall project would create 2,100 temporary jobs during construction and a permanent payroll of 1,000 at the ports of Morrow and St. Helens. The Longview project, now under environmental review, would take its coal directly from rail cars and would be nearly six times as large as the Oregon project.

DSL Director Mary Abrams said the agency considered public comments as well as documents submitted by Ambre. “From reading more than 20,000 public comments to carefully analyzing technical documents and plans, this application has been scrutinized for months. We believe our decision is the right one, considering our regulatory parameters laid out in Oregon law and the wealth of information we have received from the applicant and the public.”

The decision leaves the downriver terminus of the coal-transfer proposal in limbo, and it could conceivably have some effect on the proposed Millennium coal terminal proposed at Longview, downstream on the Washington shore. Coyote Island had at one time been considered an alternative way to ship coal to Millennium, particularly if coal traffic began to back up on the Washington side of the river. The capacity of rail lines has become an increasing concern in recent months. Ambre is also an owner, with Arch Coal, of the Millennium project.

Ambre's spokesperson Liz Fuller said Tuesday that Longview had never been considered as a destination for the coal from Coyote Island. There were news articles at the time of the May 13, 2011 approval by the Port of Morrow for a lease, quoting company officials stating the coal was bound for Longview; no mention was made of St. Helens in a news story by an East Oregonian reporter covering the meeting. Others have speculated on Longview as a backup site, but the company has not said it was planning on that option, at least since May 2011.

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Ambre’s finances have been widely scrutinized by coal opponents, particularly Sightline Institute, which in a series of articles termed “caveat investor,” outlined “deeply troubled finances” and heavy debt for the Australia-based company. Monday’s ruling will not enhance Ambre’s ability to raise additional capital as it attempts to move forward on Millennium. The setback for Ambre comes as the international coal market is in a time of instability, with China attempting to cut its use of coal just as American demand is slowing due to environmental regulations. The net impact, according to SNL Energy, an industry analyst, is that “volatility is a new normal” in the industry.

Power Past Coal, a major opponent, called the ruling “a landmark decision.”

"The Morrow Pacific coal export proposal was touted as the gateway for the development of coal exports in the Northwest. Today’s decision shows that Big Coal’s window is fading fast,” Cesia Kearns of the Power Past Coal coalition said.

Decisions on submersed and submersible lands were historically lodged in the Oregon Land Board, made up of the governor, secretary of state and state treasurer, but reorganization several years ago removed the Board from all but decisions on sale or lease of the lands, which was not involved in this case. Gov. John Kitzhaber has been a strong critic of coal exports, but Abrams has said that he was not intervening in her decision.

This story has been updated since it first appeared.


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About the Authors & Contributors

Floyd McKay

Floyd McKay

Floyd J. McKay, professor of journalism emeritus at Western Washington University, was a print and broadcast journalist in Oregon for three decades.