Battle over coal for China highlights global economic change

McClatchy NewspapersAugust 2, 2011 

BELLINGHAM, Wash. — When a Seattle-based shipping company announced plans last year for a deepwater cargo port that it promised would create hundreds of jobs, it looked like good news.

This waterfront community of 75,000 just south of the Canadian border had suffered the loss of its primary industry when a large paper mill began closing down in 2001. Then a nationwide housing and construction boom ended in 2007 when the market tanked.

"The jobs are nothing to scoff at," Bellingham Mayor Dan Pike said earlier this year.

But Pike's attitude changed when he learned what cargo the company had in mind: coal, and potentially 48 million tons of it a year. That coal would end up in China, where it would fuel the blistering growth of America's biggest competitor.

David Hawkins, the director of the Natural Resources Defense Council's climate programs, said that would be a role reversal for the world's most technologically advanced country.

"China is exporting iPads to us, and we're sending rocks to them," he said. "It is a scratch-your-head comparison."

Mile-long coal trains have rumbled from mines to power plants and ports across America for decades, unnoticed by a public that uses electricity without thinking much about where it comes from. But the proposed Gateway Pacific terminal near Bellingham has opened up a larger debate about U.S. competitiveness in a changing global economy and to what extent it should set an example of environmental stewardship for other countries to follow.

In the months since SSA Marine announced its plans for the Gateway Pacific terminal, hundreds of people have turned up at public meetings to express their opposition to the port. The project's defenders include an unusual alliance of business and labor leaders. Its opponents include local residents and national environmental powerhouses such as the Sierra Club.

"I do not believe in exporting our nonrenewable natural resources," said Kelli Linville, a former state legislator and one of three candidates who are challenging Pike for mayor. "That's what Third World countries do."

Coal generates half of America's electricity and more than three-quarters of China's. As the U.S. phases out older, less efficient coal-fired plants or switches to cleaner-burning natural gas, China and other developing countries are building new coal-fired plants as their economies expand. U.S. coal producers, rail companies and port operators stand ready to supply China with coal, and the only barrier is the lack of a suitable West Coast port. That's why SSA Marine and its coal-producing partner, Peabody Energy, are pitching the Gateway Pacific project, 15 miles northwest of Bellingham.

It seems like a natural economic opportunity that could help recession-weary Americans get back to work. The national unemployment rate ticked up to 9.2 percent in June.

"I'd rather be exporting American coal and grain than American jobs," said Rep. Rick Larsen, a Democrat who represents northwest Washington state in Congress. "This facility gives us the opportunity to do just that."

But the Northwest is proud of its green reputation. Washington state has only one coal-fired power plant and plans to phase it out within a decade. The region's environmental activists oppose exporting coal, even if that means stopping jobs their neighbors need.

"We cannot turn our backs on people who are struggling in this community, but that doesn't mean we take jobs at any cost," Pike said in June when he announced that he'd oppose the port.

St. Louis-based Peabody, the largest U.S. coal producer, reached a deal with SSA parent Carrix Inc. in February to make Gateway Pacific its hub for shipping to places such as China, South Korea, Japan and India.

"The coal we will ship will be far cleaner than many fuel alternatives in Asia and will be used at some of the cleanest coal plants in the world," said Beth Sutton, a Peabody spokeswoman.

According to an economic analysis by the Sightline Institute, a Seattle-based environmental research group, the carbon emissions from 100 million tons of coal would be the equivalent to the annual emissions from 40 million cars.

SSA spokesman Gary Smith said the port was designed to handle commodities other than coal, too, such as grain and potash. But he said that many opponents would never be satisfied as long as coal was any part of the mix.

"Some people object philosophically to exporting coal," he said.

Hawkins, a former Environmental Protection Agency official, said that by increasing coal exports, the U.S. undermined its own stated goal of reducing carbon emissions.

"It's simply inconsistent to say we're going to cut carbon pollution, but we're indifferent to whether it comes from the United States or somewhere else," he said.

According to the International Energy Agency, China surpassed the U.S. last year as the world's largest energy consumer. Though China has its own vast coal resources, its domestic production can't keep up. China became a net importer of coal in 2008.

Defenders of the Gateway Pacific terminal say it might as well come from the U.S.

"How can we not be in favor of it, for a variety of reasons?" said Dave Warren, a former president of the Northwest Washington Central Labor Council. "I don't know when another opportunity like this is going to come into our community."

Hawkins thinks that's shortsighted. "Everybody's in favor of economic development and jobs," he said. "We want economic development that's compatible with the kind of world we want to leave our kids."

So far in Washington state, the score is 1-0 in favor of coal foes. They derailed a similar plan in Longview, along the Columbia River. Millennium Bulk Terminals tried to get a permit to develop a facility that would give St. Louis-based Arch Coal an outlet to Asia. But the bid fell apart when documents revealed that Millennium was planning a much larger operation than it had disclosed. In March, the company withdrew its application.

Kathleen Ridihalgh, of the Sierra Club's Washington state chapter, said Millennium and SSA "thought they were getting in quickly and quietly," but instead ran into resistance from communities near the proposed ports.

"Maybe this is a West Coast kind of thing, but global warming is still one of their top concerns," Ridihalgh said. "It's something people want to take action on, and take action on it locally."

Bellingham Mayor Pike opposes the Gateway Pacific terminal, but he may not be able to do much to stop it. The Washington State Department of Ecology and Whatcom County will decide the project's fate in an extensive environmental review. Pike has lobbied aggressively to have input during the process to make sure it addresses residents' concerns.

He knows that the fight may cost him.

"I will do everything in my power to protect Bellingham," he said. "Stopping this coal port is more important to me than being re-elected."

(Tate reported from Washington, D.C. Stark, of The Bellingham Herald, reported from Bellingham, Wash.)

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