THE BLOG
08/31/2013 06:36 pm ET | Updated Oct 31, 2013

Louisiana gives the green light to a publicly opposed coal terminal

(This is an updated version of an Aug. 26, 2013 article in "The Louisiana Weekly.")

On Friday, Louisiana's Department of Natural Resources gave RAM Terminals, LLC a Coastal Use Permit to run a coal-export facility in Plaquemines Parish near the community of Ironton. Kentucky-based RAMACO--a coal reserve and infrastructure development group--hopes to complete the Myrtle Grove facility by next year, building it next to a planned, Mississippi River sediment diversion. RAM's operation will add to two coal terminals nearby, run by Kinder Morgan and Oiltanking, respectively.

DNR said public comments on the terminal from two hearings in August and a recent notice period raised concerns about air and river pollution, the sediment diversion, concentration of heavy industry on the river, rail traffic, neighboring Ironton, coal's role in global warming and current coal economics.

In approving RAM's permit, DNR said the state's Dept. of Environmental Quality, through its permitting and monitoring process, will be responsible for minimizing pollution. DNR said the Mid Barataria Sediment Diversion, planned by the state's Coastal Protection and Restoration Authority, can coexist with the coal terminal as long as RAM abides by a memorandum of agreement with CPRA. The agreement will restrict RAM's activities during designated "peak operating periods," when the river is running fast.

On the supply-demand side, DNR said that domestic coal use has declined as more shale has been tapped for natural gas but Asian coal needs remain strong.

DNR said the terminal's impacts on Louisiana's coastal water and resources should be minor, environmental threats will be minimized to every extent possible, and potential benefits to the state's residents outweigh negatives.

The terminal will create hundreds of temporary construction jobs and up to 150 permanent positions, according to RAM. But some questioned how much neighbors will benefit. "Based on what other companies near us have done, RAM will bring in outside people for construction and probably even for the permanent jobs," Ironton resident Rose Jackson said last week. "They've ignored our health and environmental concerns, and we wouldn't let our children work there anyway," she said. Ironton is a close-knit, African American community, with many churchgoers, she said. "We have well over a hundred years of history on the land where RAM wants to operate." With 150 residents, Ironton is about 30 miles south of New Orleans.

The terminal will add to the area's coal-dust pollution and related health problems, said Marylee Orr, executive director of the Louisiana Environmental Action Network. LEAN, along with seven other groups opposed to expanding Gulf Coast coal exports, are members of the Clean Gulf Commerce Coalition. Orr said rail traffic could swell if the terminal is built. Worries are the railway ending at the CHS grain elevator slightly north of Ironton might be extended south to accommodate the parish's coal facilities.

In 2011, RAM purchased 602 acres of land between the grain elevator and Ironton to develop its coal terminal. The state plans to locate its river sediment diversion on RAM's property midway between Ironton and RAM's worksite. The soonest the diversion could be built and operating is five years from now, according to Jerome Zeringue, CPRA's executive director.

"We'll continue to back the communities that oppose the RAM terminal," Orr said. "We'll explore all avenues and opportunities available to us."

Unlike Louisiana, residents of other states have managed to block coal-export facilities. Plans for half a dozen coal terminals in Texas and the Pacific Northwest have been scrapped. "Three different projects in Texas are no longer moving," with one in Corpus Christi canceled this month, Al Armendariz, Texas-based senior representative at the Sierra Club's Beyond Coal Campaign, said last week. In the Pacific Northwest, three projects have been shelved in the last year or so.

"Very good work has been done in the Pacific Northwest educating the public about the dangers of dust and water pollution from coal and the nuisance of coal trains," Armendariz said. Coal is a raw deal for consumers, especially those living near terminals, he said. Dust blows off rail cars and moves from company yards into local waterways. But even though coal terminals are known threats to neighbors, these port projects typically qualify for tax-exempt state bonds, he said.

In May, Oregon environmentalists cheered the cancellation of a Port of St. Helens terminal, which could have shipped as much as 30 million tons of coal yearly. According to the company involved, "Kinder Morgan decided to scrap the project because of zoning issues but we'll continue to look for other opportunities where they make sense," Kinder spokesman Joe Hollier in Texas said last week. KM, one of the nation's biggest coal-terminal operators, owns facilities in Texas, Louisiana, Virginia and Lake Michigan.

"We're pleased that terminals have been canceled in the Pacific Northwest and Texas but our work is not done," Armendariz said. "Existing export facilities in several states, including Texas and Louisiana, are expanding."

Hillary Corgey, healthy ports organizer at Public Citizen Texas, explained the situation there. "Two coal terminals planned in Corpus Christi had the kibosh put on them, with only one--Millennium Bulk Logistics/Ambre Energy--left in Corpus," she said. "But in the Houston metropolitan area, the Jacintoport Bulk Terminal is proposed, Kinder Morgan's existing Houston Deepwater Terminal is expanding, and Kinder's Houston Bulk Terminal is more than doubling capacity." Houston is one of ten U.S. ports that will be dredged and fully prepared for the Panama Canal's widening and deepening by 2015, she noted.

Market conditions are often blamed for terminal cancellations. "Coal prices are volatile, and prices have fallen in recent years so the economics of building new terminals no longer work for some companies," Armendariz said. Central Appalachian, thermal coal prices had a sharp run-up to nearly $140 a short ton in 2008 because of supply disruptions in China and Australia, but have since eased and stood at $53 a ton last week. Nonetheless, exports to Asian buyers are often negotiated at values above the prevailing market. And Asian demand, though not as robust as anticipated at the start of the decade, remains significant, with India importing at record levels. China's purchases from other nations are expected to slow, however.

The coal industry didn't expect much resistance to its planned Gulf Coast terminals, Nancy Nusser with Public Citizen Texas said last week. "However, it's becoming clear that there will be a fight in the Gulf," she said. In two hearings on RAM's Louisiana Coastal Use Permit application in mid-August--held in Davant and Belle Chasse--50 people and 120 people turned out, respectively. Nusser said the Clean Gulf Commerce Coalition was formed to halt a proposed increase in Gulf coal exports. In addition to LEAN, members include Air Alliance Houston, the Gulf Restoration Network, the Louisiana Bucket Brigade, Public Citizen Texas, the Sierra Club, Texas Environmental Justice Advocacy Services and the Texas Organizing Project.

Armendariz said he hopes Louisiana residents will continue urging officials to resist coal terminals. He said that coal, on both the supply and demand sides, isn't compatible with coastal rebuilding. Coal-fired power plants, no matter where they are, emit greenhouse gases that contribute to global warming, rising sea levels and super storms. "There is no environmental benefit to reducing coal's use in the United States and then exporting coal to Asia," he said. "It's important that we keep it in the ground."

To what extent can residents stop coal terminals? "Citizen activism can influence the cancellation of coal terminals but won't stop permits for a proposal that legitimately passed required permit tests," Richard Ellmyer, chair of the North Portland Coal Committee, said last week. "Citizen activism didn't directly stop the three, canceled coal terminals in the Pacific Northwest. The marketplace was the determining factor." Activism influences the market, however, and to a lesser extent the political system, he said. The North Portland Coal Committee opposes exports to Asia from the Pacific Northwest.

Analysts at the World Bank and investment bank Goldman Sachs have turned negative on coal, Ellymer said. The World Bank this summer decided to move away from financing coal-power generation projects. And Goldman Sachs in an August report said coal demand will be hurt by environmental regulations, competition from gas and renewable energy, and gains in energy efficiency. Goldman predicted that seaborne demand for coal could peak in 2020. In Ellymer's view, China, Russia and Australia are better situated than the United States to supply Asian consumers.

Ellymer offered some advice to residents who want to fight coal terminals. "Citizens typically have little luck pressing the Army Corps of Engineers or local permitting authorities to deny permits," he said. "Coal mining and sale and transport to foreign buyers are political issues beyond the scope and pay grade of bureaucrats following the rules and orders from above." In Louisiana, the two entities with the greatest influence on coal terminals are Governor Bobby Jindal's office and the Obama Administration, he said. "That's where I would focus my energy."

But Ellymer said the jury is still out on how the Obama Administration will act on climate change issues, including transport of coal to foreign buyers.

Like Armendariz, Ellymer said exporting coal that we don't want to burn will come back to haunt us. Scientists in the Pacific Northwest have found that increasing, airborne toxins from Asian coal plants are contaminating local fish, he said.

Meanwhile in Myrtle Grove, La., Kinder Morgan's International Marine Terminals are in the third phase of a $190 million expansion, to be completed next year. Total capacity should grow from 10 million short tons to 20 million. Last year, the terminal exported 3.8 million tons of coal, however.

In addition to expanding its deepwater and bulk coal terminals in Houston, Kinder is enlarging its Lake Michigan pet coke terminal in Whiting, Indiana.

"All of our expansions and projects are currently on time to meet the requirements of our long-term customer commitments," Hollier at Kinder Morgan said last week. "We're committed to being an environmentally responsible operator, and we meet or exceed all state and federal regulations in our efforts to suppress dust emissions." Kinder does all it can to keep its dust from impacting communities, he said.

Residents of Myrtle Grove and nearby Ironton, La. however, said they see dust blowing off piles of uncovered coal at Kinder's IMT. They suspect that asthma and allergies in their towns are related to coal. Across the river and slightly south of the IMT is another coal exporter, United Bulk Terminals in Davant, owned by Oiltanking.

Elsewhere in southeast Louisiana, "Convent Marine in St. James Parish is expanding its coal terminal capacity from 4 million tons per year to 8 million tons," said Devin Martin, conservation coordinator with the Sierra Club Delta Chapter. He said it's relatively easy to obtain government permits for an expansion compared with a new operation. "Burnside in Ascension Parish is a 7-million-ton per year facility but it isn't finished yet," he said. "Both of these terminals have rail access while the ones in Plaquemines do not."

Since last fall, "we've gathered nearly 600 signatures on Sierra Club petitions against RAM's Myrtle Grove terminal," Martin said last week. Alerts went out to all Louisiana members. "We have the most members in Greater New Orleans but signers have been from across the state, including Monroe, Lake Charles and other areas not directly impacted by the terminal," he said. Duplicate signatures were removed.

DNR accepted written comments on RAM's Coastal Use Permit application through Monday, Aug. 26, before it decided to grant the CPU. RAM still needs a Water Quality Certification from Louisiana's DEQ; a U.S. Army Corps 404 Permit, authorizing construction in wetlands; and a Compensatory Mitigation Plan for wetlands from federal and state agencies. end