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Wednesday, June 29, 2016

Shipping Coal Abroad Is Banned by Oakland, California

The city of Oakland California has unanimously turned down permitting of a large coal transshipping terminal on its waterfront.  Earlier, an even larger terminal project in Washington State was rejected because it would have infringed Native American rights.

In view of the undisputed and urgent need to limit the level of atmospheric carbon dioxide, governments at all levels, local, state or provincial, and national, must act to limit greenhouse gas emissions.  The action by Oakland is fully consistent with, indeed was driven by, this necessity for action.

Oakland, California.  Development of an export terminal in the city of Oakland, California for the shipment of American coal to China and other overseas users was unanimously rejected by the Oakland City Council on June 27, 2016 (The New York Times, June 29, 2016 ).  The coal is being mined in Utah and other western states.

A principal reason for voting the terminal down was that it, and thereby the city, would be facilitating the worsening of global warming and rising sea levels.  This would have been the consequence as the coal was burned in the destination countries if the terminal were allowed to operate.  Coal is the worst of the fossil fuels from this regard, emitting almost twice as much carbon dioxide (CO2), a major greenhouse gas, as natural gas.  The Oakland City Council understood that, once emitted, CO2 is distributed worldwide in the atmosphere, worsening the effects of global warming for all nations, not just the country burning the coal.

During the Council’s deliberations one of the developer’s lawyers called the city’s concerns that coal exported from Oakland would increase emissions of CO2 “nonsensical and absurd” because foreign power plants could obtain their fuel elsewhere if it were not shipped from Oakland.  The lawyer also argued that by Oakland’s reasoning, “the city would have to hold gas station owners responsible for greenhouse gas emissions from cars that refuel at their facility”.

The State of Washington.  In May 2016 the U. S. Army Corps of Engineers denied the permit for what would have been the world’s largest coal shipping terminal to be constructed 90 miles north of Seattle, Washington.  The Corps found that treaties between the U. S. and Native Americans governing use of their lands and waterways preserve their rights for fishing.  The terminal’s facilities would have endangered these rights.  The coal for this terminal would have originated in the states of Montana and Wyoming.  Cities along the rail route to the intended terminal also raised concerns over possible disasters from derailments, especially in urban areas crossed by the railroad.

Domestic American demand for coal has been declining for many years.  A major use for coal has been in generation of electricity, but utilities have spontaneously switched to natural gas because it is cheaper than coal and is more efficient in generating electricity.  In April 2015 31% of electricity generation was fueled by natural gas, exceeding use of coal, at 30%, for the first time.  As seen in the following graphic, the proportional use of coal in generating electricity has been falling steadily since 1988, during the administration of President Reagan.  It has fallen more sharply since about 2008, as natural gas became more abundant and cheaper as a result of hydraulic fracturing.

For decades, coal has been the dominant energy source for generating electricity in the United States. EIA's Short-Term Energy Outlook (STEO) is now forecasting that 2016 will be the first year that natural gas-fired generation exceeds coal generation in the United States on an annual basis.
Source: U. S. Energy Information Agency.

As a result of the decreased demand for coal in the U. S. American producers have sought to sell their product abroad.  Even so, Peabody Energy, the coal mining company that was a major sponsor of the Washington State terminal project, filed for bankruptcy in April 2016.  Arch Coal, a mining company that had been backing yet another terminal project on the Columbia River, the border between the states of Washington and Oregon, declared bankruptcy in January 2016.

Foreign demand for coal.  In addition to falling domestic demand, foreign demand for coal is also falling.  China imported 33.7% less coal in June 2015 than a year earlier, due to decreased Chinese demand.  Other factors contributing to falling demand for U. S. coal exports include a stronger U. S. dollar, which makes foreign coal purchases from the U. S. more expensive, and the fact that other sources of coal, such as Australia and Indonesia, are closer to China.


The decision by the Oakland City Council is a principled action that recognizes the need for all jurisdictions, local, state or provincial, and national, to take positive steps to reduce annual rates of emission to near zero as soon as possible.  This need is based on the fact that most CO2, once emitted into the atmosphere, resides there for centuries or longer; there is no natural mechanism that removes it from the air.  Therefore the total accumulated amount of CO2 keeps increasing as long as the rate of emission is higher than zero. 

The need to achieve near-zero rates of emission was recognized early, for example, by the California Science and Technology Council.  It has been reasserted in the strongest of terms in the most recent findings from the Intergovernmental Panel on Climate Change in its Fifth Assessment Report.  This necessity was embraced by almost all countries of the world in the United Nations-sponsored Paris Agreement of December 2015.  In fact this necessity is precisely why, ultimately, the argument of the Oakland terminal’s proponent, that gasoline service stations promote further global warming, is correct!  In the not too distant future service stations will be charging electric cars and providing hydrogen for fuel cell-driven cars.

The developer of the Oakland terminal project presented a false argument.  It stated that denying the terminal was useless because foreign customers could obtain coal from other sources.  This argument is morally wrong, indeed empty, because it seeks incorrectly to place blame on future emissions from coal obtained other than by shipping through Oakland back on the city.  Every jurisdiction must act in the interests of its citizens and those of others affected by its decisions.  Given the worldwide effects of CO2 emissions regardless of where it is emitted, facilitating further emissions instead of resisting them damages all humanity.  This author has commented in the same way when the exact same argument was used by TransCanada, the proponent of the XL oil pipeline.
Oakland’s action was needed especially because the U. S. Congress has perennially failed to legislate a pathway to reducing emission rates or to accede to international agreements to do so.  That leaves American states and cities to act to fill the void.  And indeed, many states and localities are doing so.  This will continue, addressing imminent needs, at least until Congress acts, and perhaps even after in complementary ways.

© 2016 Henry Auer

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