Utah counties determined to find port for coal

Utah counties determined to find port for coal

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SALT LAKE CITY — Utah's coal country does not believe a unanimous vote by the Oakland City Council prohibiting port access for its coal puts the state's hope for an export terminal in the dust.

Developers of the terminal at the site of the former Oakland Army base may sue to challenge action by city leaders, and the four-county coalition in Utah will continue to pursue West Coast access for coal and other commodities, according to Carbon County Commissioner Jae Potter.

"We will continue to look for export opportunities," he said, including siting a port in international waters.

The Oakland City Council held a more than four-hour meeting Monday night in which more than 100 people weighed in on what action, if any, the city should take regarding plans for shipping Utah coal from an export terminal to be built on city-owned property.

Multiple groups launched a strident campaign to derail the proposal, including Utah-based organizations such as HEAL Utah.

Eight City Council members had the option of not imposing any restrictions, banning the handling and export of coal outright, or requiring a review under California environmental laws. Council members present voted to endorse an ordinance imposing the restrictions on coal during an initial reading of the measure. Subsequent action is expected later this summer.

A staff report advised against the city allowing coal to be handled and exported from the bulk terminal, citing public health concerns and impacts to air quality from fugitive coal dust, particularly in neighborhoods already struggling with pollution.

The staff recommendations were derived from a review of a 200-page report prepared by a consultant who raised concerns over mitigating fugitive coal dust, including doubts on the effectiveness of covered coal cars.

Potter criticized the report, which he said contained numerous faulty conclusions.

"What it is going on in Oakland is hyperbole based on environmental concerns that have not been proven," he said.

The controversial pursuit of securing export access at an Oakland port first publicly surfaced in 2015 after members of the Community Impact Board voted to approve a $53 million loan to Sanpete, Carbon, Emery and Sevier counties.

When questions arose over the use of Community Impact Board money to secure 50 percent access to the deep water port, the Utah Legislature passed a law enabling a funds-swap that replaces the money — derived from mineral lease revenues — with transportation funds.

Environmental groups and coal critics decried the state legislative action and have since asked for a federal investigation of the coal deal by the U.S. Attorney General.

State lawmakers who supported the bill argued that port access is crucial for Utah's coal-dependent communities during a time of transition and increasing pressure, and Potter said the process was transparent.

"We have nothing to hide," he said. "Bring it on."

Pursuing the coal terminal has the support of Laura Nelson, Gov. Gary Herbert's energy adviser and executive director of the Governor's Office of Energy Development. Nelson said developing access to a deep water port is a natural step as the state continues to build on its access to global markets.

"We recognize that the community may have some questions about the proposal, and appreciate that open forums like the one (Monday) in Oakland are an important part of the public process," she said in a prepared statement.

Domestic demand for coal has dropped sharply in a market that has forced the bankruptcy of the nation's largest coal company, Peabody, as well as other major players unable to survive the tepid conditions.

The U.S. Energy Administration reported this month that coal production in the first three months of 2016 reached its lowest level since a major coal strike 35 years ago.

Compliance with increasing environmental regulations, slow growth in electricity demand, and competition with natural gas and renewable energy resources are all combining to paint an abysmal future for coal.

In Utah, one coal-fired power plant has been shuttered and PacifiCorp — the parent company to Rocky Mountain Power — was just ordered by the U.S. Environmental Protection Agency to install tougher pollution controls at its Huntington and Hunter power plants.

The upgrades are expected to cost in excess of $600 million.

Potter said the Oakland vote on the export terminal is another hurdle for coal communities to overcome.

"Will we dry up and blow away? No, but it is becoming increasingly difficult for coal mines to be successful and for communities to survive," he said.

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Amy Joi O'Donoghue

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