SSA agreement could bring 24 million tons of coal

Published on Wed, Mar 9, 2011 by Jeremy Schwartz

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Seattle-based SSA Marine, which operates 125 shipping terminals across the globe, has entered into an agreement with Peabody Energy to export up to 24 million tons of coal annually through the proposed Gateway Pacific terminal just south of BP’s Cherry Point Refinery.

Peabody Energy is the world’s largest private-sector coal company and the 12th largest coal exporter in the world, according to the company’s website. The coal would come from Peabody’s North Antelope Rochelle Mine, which is part of the Powder River basin, the largest coal-producing area in the U.S.

When finished, the Gateway Pacific terminal could take the place of the Westshore Terminals export terminal at Roberts Bank, B.C., as the largest coal export facility in North America.

The Roberts Bank terminal ships about 21 million tons per year while initial coal export capacity for SSA’s terminal would be around 25 million tons annually.

Last Monday, the privately owned SSA announced it has started the extensive permitting process with Whatcom County and the U.S. Army Corps of Engineers for the $500 million terminal project. State agencies involved include the departments of ecology, natural resources, and fish and wildlife.

SSA vice president Bob Watters expects the permitting process, which includes examining the potential environmental and economic impacts of the project, to take about two years.

 If permitting goes as planned, construction should start in 2012 and last until 2014 or 2015, Watters said.

The proposed terminal, built to receive 250,000-ton bulk transport ships, would sit on the shoreline between the Alcoa Intalco aluminum smelter and the BP refinery.

The facility would be a loading and unloading terminal for train cars carrying coal, grain and potash, a mined and manufactured salt containing potassium. The proposed terminal and the neighboring industrial facilties sit inside the Cherry Point Aquatic Reserve.

SSA, which started in Bellingham and is run by a Bellingham native, will host public meetings over the course of the permitting process at which members of the local community will be able to voice their concerns about the project, Watters explained. Public hearings on the scope ofe draft environmental impact statement (EIS), which will detail any potential environmental impacts the terminal and its operations could have, should be finished in 2012. Public hearings on what potential impacts the EIS will investigate, called the scope, will be held in spring or summer, he explained.

Watters said SSA started making their case for the terminal to local city councils and citizens’ groups in December. SSA brought in Craig Cole, former Whatcom County council member and president of Brown and Cole, to help with the informational campaign.

According to Washington Public Disclosure Commission documents, SSA paid Cole $46,500 from September to February to lobby the state departments of ecology, natural resources and fish and wildlife in support of the Gateway Pacific terminal. Watters said Cole is the only such consultant SSA has hired to lobby in support of the terminal.

SSA has touted the potential of the project to bring more family-wage jobs and additional tax revenue to Whatcom County as its main positives. Cole said the construction phase will employ between 2,000 and 3,000 people directly and create between 3,000 and 4,000 indirect jobs, such as those in construction supply.

Watters estimates the construction phase will bring in about $70 million in local tax revenue and an additional $11 million per year once the terminal is up and running at full capacity.

David Warren, president of the Northwest Washington Labor Council, said the average yearly income of an employee at the fully operational terminal would be about $75,000. He said he is confident local workers will be hired to build and operate the terminal and that it will be a 100 percent union project.

Governor Chris Gregoire and U.S. Representative Rick Larsen, D-Everett, in addition to the mayors of Ferndale, Lynden and Bellingham have come out in support of the facility.

However, local environmental groups, such as Bellingham-based Re Sources for Sustainable Communities, have raised concerns over the potential environmental impacts and the strain the terminal could put on local infrastructure.

Matt Krogh, north sound baykeeper for Re Sources, said SSA has yet to complete nine environmental impact studies agreed upon in a settlement with five environmental groups and two state agencies. These studies were part of the permitting process when SSA initially applied to build the terminal in 1996.

“There really is a whole lot [SSA] should want to know through these studies,” Krogh said.

A Washington department of ecology (DOE)  letter written by Barry Wenger, a DOE senior environmental planner, lists the necessary studies, which include work on how increased ship traffic will interact with the marine environment off of Cherry Point. In addition to what would be learned through the studies from an environmental standpoint, Krogh said SSA needs to determine how best to navigate massive ships through the area’s waters.

Krogh’s main concern about the proposed facility’s environmental impacts stems from the area’s importance to the local Pacific herring populations.

The herring hold a vital place in the area’s ecosystem since they are a food source for orcas, seals and salmon, he explained.
Watters said the environmental studies SSA needs to complete include finding ways to lessen the proposed facility’s impacts on wildlife populations in the area. The proposed site was picked in part because of the sea depth, which allows very large vessels to dock, he explained.

When the Cherry Point Aquatic Reserve was first announced in 1999, the Department of Natural Resources set down rules to follow, but was less clear on what companies could and could not do, Cole said.  The recently adopted reserve management plan includes the terminal and sets down clear regulations for the area, he explained.

“[The management plan] sets a very high environmental bar,” Cole said.

Other concerns that have been raised include increased rail traffic through Bellingham and coal dust.

Watters said the terminal will utilize dust-control measures, such as water sprayers and windscreens, to keep dust from open storage commodities like coal from leaving the property.

Coal storage at Roberts Bank, B.C., takes almost 100 percent of the facility’s footprint, Watters added.

About two-thirds of the 1,100 square-foot SSA terminal site would be left in its natural state, he explained. The new terminal will also use completely covered or enclosed transport systems for all the commodities it handles, he said. Watters added the closest transport activity will come to the shoreline is 2,000 feet.

Watters said the size of the terminal and the ships it will be able to accommodate will allow the facility to handle different commodities at the same time.

The amount of product that can be transported through the terminal at any given time will most likely reduce costs for producers since it will mean fewer shipments with larger vessels, he explained.

While increases in train traffic remain uncertain, Watters said rail traffic will probably not increase beyond historical norms.

He explained the trains that do go through the terminal will be completedly contained within the facility and not cause delays on the main rail line.