Until recently, sending American coal to overseas energy markets wasn't something anyone seriously considered. American utilities have a large appetite for coal, so it's been more profitable to send it to American power plants than to export it. But that is likely to change.
China's energy consumption is growing rapidly. The world's most populous country is embracing wind and solar power, but it is using a lot of coal as well. In the last decade, China built as much coal plant capacity as the entire existing capacity in the United States.
Meanwhile, the U.S. is gradually moving away from coal. States' renewable portfolio standards mean that utilities in much of the country are required to find alternative energy sources. Low natural gas prices also are hurting the domestic coal industry. No new coal plant has broken ground in the U.S. since 2008. While domestic coal consumption isn't disappearing by any means, the long-term prospects of the American coal industry may depend on finding markets overseas.
The stakes are especially large for Wyoming, which is the nation's largest coal producer, and Montana, which has the nation's largest coal reserves. "If you have lemons, you make lemonade," says Bud Clinch, executive director of the Montana Coal Council. "We have coal."
Today on the West Coast, only the Canadian province of British Columbia regularly exports coal. Two proposals in Washington State would change that. One would place a port terminal near Bellingham on the Canadian border. That proposal's backers are still conducting environmental reviews. The other is for the one at Longview, in Cowlitz County, which won approval from the Cowlitz Board of Commissioners a few months ago.
When that happened, a coalition of environmental groups objected. Their concerns included the local environmental consequences of transporting millions of tons of coal through their state, such as health problems from coal dust. More than anything, though, the environmentalists didn't want coal to be burned anywhere — in Washington State or halfway around the globe.
KC Golden, policy director with Olympia-based Climate Solutions, points out that once they're built, coal plants can operate cheaply for 50 years. That means that if China keeps building coal plants now, the world's most populous nation may well be committing itself to decades of greenhouse gas emissions.
"Do the math on the carbon," Golden says. "If China builds out three, four, five times as much coal capacity as it currently has, we are toast from a carbon prospective." While there are other countries China can get its coal from, such as Australia and Indonesia, environmentalists hope that if it doesn't have American coal China will decide that renewable energy sources make more economic sense.
In applying for its permit from Cowlitz County, Millennium Bulk Logistics, a subsidiary of an Australian coal company, hadn't conducted a full review of the project's environmental impacts. It said they would be minimal. Environmentalists appealed that conclusion to a state board. For Washington's Department of Ecology, the appeal raised a tough question: Just how broadly should the state look when considering a project's greenhouse gas emissions?
As it turned out, Washington never had to answer that question definitively. Documents emerged that showed Millennium officials discussing an expansion of the Cowlitz County port to handle as much as 80 millions tons of coal a year, vastly more than the 5 million tons the company had publicly acknowledged. Millennium withdrew the permit request, pledging to produce a complete environmental review before it moved forward.
No global policy
That move, though, only delays the choices facing the West Coast. The United States has the world's largest coal reserves. China has the world's largest demand for coal. It's only a matter of time until ports in Longview or Bellingham or elsewhere are ready to press their case.
Schweitzer, himself a Democrat, isn't shy about stating his desire to help them. He describes residents of Washington State as "these people that are living in these big houses with all this electricity they've been getting with Montana's coal." Now, he says, when Montana wants to send some of its coal overseas, some Washingtonians, who have consumed Montana coal for decades, think they can unilaterally stop it. "Do we have a global CO2 policy?" Schweitzer says. "Well, no. Do we have a CO2 policy? Has the American Congress even created a C02 policy? No."
If it were only up to Washington's state government, Schweitzer would get his way. While Washington's laws give the state broad leeway to consider environmental effects beyond its borders, the state has concluded that it would be a step too far to take into account greenhouse gas emissions from the burning of coal shipped abroad through the state's ports.
"Washington is an export state, so where do you draw the line?" asks Janice Adair, special assistant to the director of the Department of Ecology. She says that if the state were to start considering the greenhouse gas emissions from the end uses of its exports, the implications would go far beyond coal. She uses the example of corn. "What if it's being used for cows that create methane? That's the kind of slippery slope that you get on."
There is no sign that the Washington State government will block construction of new port terminals to carry coal. The issue in the Cowlitz permit case was about disclosure, not whether the projects will ultimately be accepted.
Still, Adair thinks there's an important lesson in the delay of the Cowlitz project. A variety of local and state approvals will be needed before coal is ever exported from Washington, which will give environmentalists plenty of opportunities to stymie the effort.
"Any company that's going to be proposing exporting coal should be prepared for a tremendous amount of public scrutiny," Adair says. "Coal is not illegal. It's the process that's going to trip anyone up, just like it did Millennium. The environmental community is this state is very organized and very large."