California nixes funding for coal export terminals

Governor’s bill blocks transport to markets in Asia.

 

Last week, California Gov. Jerry Brown signed a bill that prohibits the California Transportation Commission from funding new coal exports.  

The bill cuts coal out of a massive import and export hub, the Oakland Bulk and Oversized Terminal, that is currently being constructed on top of a former Army base. The sprawling concrete connects the West Coast’s sea routes to rail lines in the rest of the West. Beginning in 2018 it will ship hard-to-transport products like cars and agricultural machinery as well as commodities like steel, lumber — and, until recently, coal — to booming Asian markets abroad.

oakland_california_aerial_view-jpg
The port of Oakland, California, where the Oakland Bulk and Oversized Terminal will begin shipping in 2018.
Wikicommons

Brown’s bill follows a June decision by the City of Oakland to ban the transport and storage of large shipments of coal from the city. The terminal drew public opposition from many residents who viewed coal exports as moving away from the state’s ambitious climate goals and for the possible health effects of transporting coal through a city with already-high asthma rates.

Proponents of the ban have also criticized tax dollars to fund new coal exports that Brown says block the opportunity for renewable to take the place of coal. “In California, we’re divesting from thermal coal in our state pensions, shifting to renewable energy, and last year coal exports from California ports declined by more than one-third, from 4.65 million to 2.96 million tons,” Brown said in a statement. “That’s a positive trend we need to build on.”

California’s ban on funding coal export is the latest West Coast roadblock for the contracting coal industry. In March, Oregon became the first state in the country to pass legislation that would completely end the use of coal for electricity by 2030. In June a proposed coal export terminal north of Bellingham, Washington, was rejected by the Army Corps of Engineers because it would have infringed on the Lummi Nation’s fishing treaty rights.

The coal industry meanwhile has been in sharp decline, from a combination of federal regulations like the Clean Power Plan and market forces: the cost of natural gas is historically low and is out-competing coal. According to the U.S. Energy Information Administration, natural gas is expected to surpass coal for use in electrical power generation some time this year. Those two sources now account for about 32 percent of America's electricity each. The dwindling domestic market has motivated some Western states to seek out Asian markets for coal, contributing to a push for export terminals like the one originally planned for Oakland.

Proponents of Brown’s bill say it will curtail coal exports and in the process encourage global market to move towards renewable energy. But that may be happening already: While China's economic growth has depended on coal, its appetite for it seems to have waned. Demand for coal there decreased this year, according to the EIA’s 2016 International Energy Outlook report.

Paige Blankenbuehler is an editorial fellow at High Country News. She tweets

Note: This story has been updated to reflect the corrected name of the Oakland Bulk and Oversized Terminal.

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