Port of Oakland

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Port of Oakland is a major container ship facility located in Oakland, California. A coal export terminal has been proposed at the port by Bowie Resources.

On June 27, 2016, the Oakland City Council voted unanimously to ban the handling and storage of coal at the Port of Oakland.[1]

Location

The port is located in Oakland, California, on the San Francisco Bay.

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Background

In 2011 the port was ranked the fifth busiest container port in the United States, behind Long Beach, Los Angeles, Newark, and Savannah.[2]

The port has been the site of coal export proposals. Two bids were rejected in February 2014, including one by Bowie Resources. In July 2014, a resolution was passed by the Oakland City Council “opposing the transport of coal, oil, petcoke (a byproduct of the oil refining process) and other hazardous materials by railways and waterways within the city.” However, as of 2015 Bowie Resources is still pursuing a coal terminal at the port, to exports its Utah coal to Asia.[3]

Coal export proposals

Howard terminal

The Port of Oakland received bids in December 2013 from two developers to construct a coal and fossil fuel export facility at the 50-acre Howard Terminal site. One of the potential developers, Bowie Resources, had projected to construct an 8 million tonne per year bulk export facility, including 4 million tonnes of coal and 1 million tonnes of petreolem coke. Kinder Morgan, Metro Ports, and California Capital Investment Group (CCIG) also placed a bid for a facility with a likely fossil fuel export component. In February 2014 the Port of Oakland Board of Commissioners voted to reject the proposals, citing environmental problems, public health hazards, economic pitfalls, and public opposition.[4]

Army Base redevelopment terminal

In April 2015 Terminal Logistics said it planned to start building a US$250 million terminal at the Oakland Army Base in Oakland Port before the end of the year, and hoped to finish the 35-acre project in 2017. Four Utah counties were securing US$53 million from a Utah state agency called the Community Impact Fund Board (CIB) to invest in the new terminal. Three of the four counties produce all the coal in Utah. In return for the investment, Utah can send 49% of goods annually through the bulk shipping terminal, including coal. The Utah Community Impact Fund Board reportedly approved the investment with no written reports or studies, just the oral testimony of officials in the four counties requesting the money. County representatives told the board the money needed to be approved quickly with a June 2015 deadline to sign agreements with Terminal Logistics Solutions.[5]

The terminal would export 4.5 to 5.5 million tonnes a year from Utah through the Oakland Army Base.[6] Utah coal exports currently go through the Port of Stockton, a privately-owned port in Richmond called Levin-Richmond Terminal, and through the Port of Long Beach.[5]

In August 2015 the East Bay Express reported that the proposed investment in the bulk marine terminal by the Utah counties was being driven by Bowie Resources, to export coal from Bowie's Sufco Mine in Utah to Asia. Jeffrey Holt, chairman of Utah's Transportation Commission since 2009, was advising the four counties on their Oakland Port investment, and advising other Utah counties on publicly funding a rail connection from Utah to Oakland via Pacific Railroad. Holt will personally benefit if the projects go through, as he is also an investment banker with the Bank of Montreal backing the rail project. As news of public funding for the port project first emerged, Holt emailed commissioners of the four Utah counties, writing: "We've had an unfortunate article appear on the terminal project. If anything needs to be said, the script was to downplay coal, and discuss bulk products and a bulk terminal." Holt also wrote that Phil Tagami, the master developer of the base, was disappointed that the plan to export coal had been made public. According to the Express, records also show that Bowie Resources' plan to mine coal from Sufco appears to depend on the Oakland deal going through and that the company might not otherwise find a market for the fossil fuel.[7]

In December 2015 Holt resigned as head of the Utah Transportation Commission.[8] However, Holt is still working for BMO Capital as an advisor to the counties and still working on the coal terminal deal.[9]

In March 2016, the Utah legislature approved a bill to provide US$53 million towards the cost of the port expansion.[10] Bowie Resource Partners donated US$29,000 to key Utah legislators championing the passage of the bill.[11]

On June 1, 2016, the state Senate passed a bill to require environmental reviews for the plan to ship coal by rail through Oakland.[12]

On June 27, 2016, the Oakland City Council voted unanimously to ban the handling and storage of coal at the Port of Oakland.[13]

In August 2016 four Utah counties withdrew an application for a public loan they wanted to use to finance the Oakland coal port's construction. One week later Bowie Resources cancelled its planned IPO. According to the East Bay Express: "Bowie executives cited 'market conditions' as the reason for withdrawing their IPO. The public offering would have raised $100 million for Bowie, money that could have been used to expand its coal mining operations in western US states, including Utah, where Bowie already has several operating mines. Some of the funds could have also been used to help finance construction of the Oakland coal export terminal. The terminal had an estimated price tag of $275 million."[14]

Oakland developer Phil Tagami has threatened to sue Oakland over its coal ban. Tagami claims that the city's decision interferes with his existing vested rights to develop an export terminal for coal and other commodities. However, as reported by East Bay Express: "even if Tagami sued and prevailed, it's unclear whether Bowie has the financial resources anymore to back construction of the terminal."[14]

Opposition

City Council meeting

Critics of Bowie's proposed export terminal say the plans conflict with a July 2014 resolution passed by the Oakland City Council opposing the transport of coal, oil, petcoke, and other hazardous materials within the city. Supporters say the Oakland Army Base redevelopment project was approved by the city in 2012, did not automatically preclude fossil fuel shipments through the terminal, and was finalized before the resolution. The development agreement does allow the city to apply new regulations to the project if the city determines, “after a public hearing,” that the failure to do so would place neighbors “in a condition substantially dangerous to their health or safety.” In September 2015 the City Council held a public meeting on the health and safety impacts associated with the coal export facility. More than 600 people signed up to testify about the plan. At least three council members have expressed opposition to the use of the terminal for coal exports. The council is expected to announce its decision regarding the use of the terminal for coal exports on February 16, 2016.[15]

Lawsuit

In October 2015 Earthjustice filed a suit alleging that the city of Oakland and developers California Capital & Investment Group and Prologis Inc didn't properly assess the effects of coal shipments on the local community. Local groups are seeking a new review over the effects of coal exports under the California Environmental Quality Act (CEQA).[16]

Project Details

  • Sponsor: Terminal Logistics, Bowie Resources
  • Location: Oakland, California
  • Proposed Coal Capacity (Million tonnes per annum): 5.5
  • Status: Cancelled
  • Type: Exports
  • Coal Source: Utah
  • Cost: US$275 million
  • Financing: Utah Community Impact Fund Board

Articles and resources

References

  1. "Oakland coal ban deals blow to shipping terminal company," Fox, June 27, 2016
  2. "NORTH AMERICA CONTAINER TRAFFIC 2011 PORT RANKING"
  3. "McElhaney Puts Damper on Tagami’s Coal Plan," The Post News Group, May 14, 2015
  4. "Community leaders, groups applaud decision to protect Bay Area communities," Sierra Club, February 27, 2014
  5. 5.0 5.1 Doug Oakley, "Unlikely partners: Utah investing $53 million to export coal through Oakland port," Contra Costa Times, Apr 24, 2015
  6. "McElhaney Puts Damper on Tagami’s Coal Plan," The Post News Group, May 14, 2015
  7. Darwin Bond-Graham, "Banking on Coal in Oakland," East Bay Express, Aug 19, 2015
  8. "Utah official who helped arrange loan to ship coal through California resigns," La Times, Dec 16, 2015
  9. Personal communication with Darwin Bond-Graham of East Bay Express, Dec 16, 2015
  10. Lee Davidson, "Utah Legislature OKs $53 million cash swap to fund Oakland coal port," The Salt Lake Tribune, Mar 10, 2016
  11. Darwin Bond-Graham, "Utah Lawmakers Voting to Spend Public Funds on Oakland Coal Terminal Took $29,000 from Company that Stands to Profit," East Bay Express, Mar 10, 2016
  12. "State Senate passes bill to slow Oakland coal shipping plan," SF Gate, June 1, 2016
  13. "Oakland coal ban deals blow to shipping terminal company," Fox, June 27, 2016
  14. 14.0 14.1 Darwin BondGraham, "Mining Company Behind Oakland Coal Terminal Withdraws IPO Plans, Bogged Down in Lawsuit," East Bay Express, Aug 23, 2016
  15. Zoe Loftus-Farren, "A Coal Terminal in Oakland?" Earth Island Journal, Dec 16, 2015
  16. "Environmentalists sue developer and Oakland to block potential coal shipments," SF Business Times, Oct 5, 2015

Related SourceWatch articles

External resources

External articles