CHEYENNE, Wyo. – Just back from a trade mission that took him to Japan and India, Wyoming Gov. Matt Mead said he expects ports in the Northwest will eventually allow coal exports from the Powder River Basin to Asia — but he doesn’t know when.
Wyoming, the nation’s leading coal-producing state, is scrambling to find new markets to make up for slipping domestic demand.
Yet Wyoming and Montana, which also produces coal from its portion of the Powder River Basin, have been sandbagged by stiff local opposition in the push for access to ports.
Proposed coal terminal projects in Washington and Oregon are under review.
Mead said he believes the Millennium Bulk Terminals-Longview project in Longview, Washington, is likely to be the first coal port project to receive regulatory approval. State regulators in Washington announced last month that a joint state-county environmental review document on the project is set for release in April.
“I think that whatever I’ve said in the past about how critical it is, the situation is becoming more and more critical for the future of coal to be able to have those ports open up,” Mead said Friday in an interview with The Associated Press.
Low natural gas prices coupled with increasingly tough federal environmental regulations on power plant emissions have hit coal companies hard in recent years. Alpha Resources, a Virginia-based company with mines in Wyoming, recently sought federal bankruptcy protections. Several other coal companies are in similar circumstances.
Wyoming has no personal or corporate income taxes and relies heavily on taxes on coal and other energy production to fund state government.
Mead, a Republican now in his second four-year term, recently announced a state employee hiring freeze in response to sharply lower state revenue projections. State lawmakers say it’s likely the state will be forced to dip into its savings to fund government operations for the coming two-year budget cycle and beyond.
“The short term is hard because there are two things hurting coal, two main things hurting coal now: it’s rules and regulations, and the low price of natural gas,” Mead said.
Mead met with industry and government officials in Japan and India last month on the trade mission that also took him to England. He stopped in Germany to visit military personnel from Wyoming.
Mead said Japanese officials made it clear that they want Wyoming coal, which is cleaner than coal from many other locations. While the demand is clear, he said, the Japanese are concerned about the cost of transporting coal and the availability of ports.
“I think it’s inevitable that this will happen,” Mead said of the prospect of exporting Wyoming coal to Asia. “I’m not sure how soon this will happen, and that’s troubling to me, because, as you know, currently with the coal industry, more and more time is of the essence.”
State lawmakers from Wyoming and Montana appeared at an event in Seattle last month organized by a group called Keep Washington Competitive that wants Washington state to approve coal exports. According to a statement from the group, it includes representatives from labour, business, agriculture and other trade organizations.
Many environmentalists in the Northwest, however, oppose the prospect of trains hauling coal and say they’re concerned that burning coal causes global warming.
Brett VandenHeuvel is executive director of Columbia Riverkeeper, an Oregon-based group that opposes coal terminal projects in Oregon and Washington. He said he doesn’t share Mead’s belief in the inevitability of coal exports through the Northwest.
“I think the market collapse for coal, including export, combined with very strong opposition in the Northwest makes for tough sledding for Gov. Mead,” VandenHeuvel said in a telephone interview.
VandenHeuvel said he doubts the Millennium Bulk Terminals-Longview project ultimately will handle coal exports. “Most analysts are not optimistic about the export market and the project’s extremely unpopular,” he said.
Meanwhile, many residents in the Northwest oppose the prospect of endless cycles of coal trains emitting dust and dropping their cargo in terminals near neighbourhoods, VandenHeuvel said.
“On top of that, people care about our climate and don’t want to be the fossil fuel highway for coal to Asia,” he said.