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R.I.P.*

*Really, Is it Post-mortal?

Wednesday, February 15, 2017

The Cherry Point coal port looks dead, but maybe it’s too early to call the undertaker.

The giant port builder and operator SSA Marine has told Whatcom County officials that the company is withdrawing its permit applications for what was supposed to be the largest coal export terminal in North America.

Conflict with an 1855 Indian treaty, a disastrous coal market and growing public opposition appeared to have stopped SSA’s train last May. That’s when the US Army Corps of Engineers rejected an essential permit, citing interference with the Lummi Nation’s fishery off Cherry Point. SSA then put a stop to required—and expensive—environmental impact studies.

The Feb. 7 letter to the County looked like the final step in canceling the proposal.

Don’t believe it—not yet, says Jack Delay, co-founder of CommunityWise Bellingham. That’s the locally-based research group that commissioned professional studies of train traffic impacts at key points in the city and the economic affect of 18 additional coal trains per day, each from a mile to a mile and a half long, separating Bellingham from its waterfront.

“The opposition is celebrating way too early,” Delay said this week.

“SSA Marine can keep out of sight for a year or two and come back with a different plan that might not even involve coal but could be just as damaging, or worse.

“By that time we’ll see the Trump Administration bringing the Army Corps of Engineers into line,” Delay predicted.

Todd Donavan of the Whatcom County Council—a body whose members would have approved or rejected the key permit had the coal project survived—says last week’s withdrawal of a statement from SSA Vice President Skip Sahlin left the proposed coal port with a tenuous possibility of resuscitation.

“I guess you could say it’s ‘more dead’ than it was, but the county’s Comprehensive Plan still allows for the possibility of a fourth pier at Cherry Point. That would be for an SSA terminal of some kind. As long as that’s in there, they can still apply for a new permit,” Donovan said.

Last month the County Council voted to limit the number of piers provided for in the plan to the three that are currently in use. But the County Planning Commission restored references to a fourth pier—a so-called “paper pier,” that establishes the right to build the pier—on the advice of the county’s legal staff.

The Council has authority to remove the language from the Comprehensive Plan, but it raises the likelihood of legal action by the owner and developers of the property.

SSA feels it has a vested right to build a shipping pier, based on a different permit, approved in 1999 after a long legal fight, and never used. No one from the company was available to comment for this story, but Sahlin’s letter to the county makes it clear that SSA has not abandoned any rights it may have at Cherry Point.

Whatever SSA finds to do with its thousand coastal acres, with deep-water anchorage close to shore in an area zoned for heavy industry, it seems unlikely to be used for shipping coal.

Bad air in Beijing changed all of that.

With air pollution deaths mounting in their capital and other cities, China’s decision makers have turned away from coal, the world price has plummeted and coal producers have failed. Currently, about 44 percent of the coal mined in the US is produced by companies that have been in bankruptcy during the past four years.

As County Council member Rud Browne puts it, “There’s not much point in building a huge project for customers who no longer want your product.”

There are other barriers.

Last month, the state Department of Natural Resources, which regulates the use of Washington’s tidelands, added the footprint of the coal terminal’s proposed pier to the 272-acre Cherry Point Aquatic Reserve, which DNR maintains to protect herring and eelgrass habitat, vital to the natural food chain of the Salish Sea. The T-shaped 45-acre footprint was originally held out of the Reserve to allow for the Gateway Pacific Terminal’s pier. A more recent scientific review indicates it should be part of the reserve.

Placing the footprint inside the reserve boundary does not stop the terminal developers from applying for a new permit. However, the company would need to prove to DNR that its operations would meet the tough environmental requirements of the Aquatic Reserve.

Among others, they would need to persuade the new head of DNR, Hilary Franz. Prior to her election as Lands Commissioner last fall, Franz was executive director of Futurewise, a statewide land use organization that actively opposed the coal terminal. Her campaign promise was to help move the state from dependency on fossil fuels.

Carl Weimer, who has studied the coal export proposal as a County Council member for ten years, believes the port developers might appeal the Army Corps’ Cherry Point decision through an administrative process, with President Trump directing the Corps to issue a different ruling.

“I have no idea how easy or legal that might be,” Weimer said. “But it could be somewhat similar to what just occurred regarding the Dakota Access pipeline.”

The coal export business will have a new and powerful champion in President Trump’s Interior Secretary, Ryan Zinke. From his post as a freshman Congressman from Montana, Zinke has demanded approval of the Cherry Point terminal, and speaks boldly of making the Western coal great again.

As Interior Secretary,  Zinke will have authority over the coal-producing federal lands in Wyoming and Montana, as well as the Bureau of Indian Affairs, which acts as Native Americans’ manager of tribally natural resources. But not even a Secretary of the Interior can create a coal market where there isn’t one, and for the moment, at least, there isn’t one.

Some coal leases on federally owned lands in Wyoming have drawn bids as low as 18 cents per ton, about one-fifth the price of a package of chewing gum. In 2013 one lease for 148 million tons drew not a single bidder, for the first time in Wyoming history.  The mining companies decided it was not worth digging. 

But just in time, it would seem, the would-be port builders were offered a way out of the coal pit, when Congress removed a forty-year old ban on the export of US crude oil, last year.

“I wouldn’t be at all surprised,” County Council member Ken Mann says, “if they file a new application, based on the permit they already hold, to build an oil export terminal.”

It won’t be easy. The company would face more stringent regulations an even greater public outcry, in bringing Bakken crude oil—a detonator with a flash point lower than that of gasoline—by rail from the Dakotas to Cherry Point for shipment to Asia.

Envision a massive crowd of oil tankers, oil barges and hundreds of smaller support vessels, mixing it up in the Sound and the Straits, multiplying the likelihood of disastrous oil spills in Washington and British Columbia waters. 

Whatever commodity may finally be hauled to Asia, no one expects the gasping Gateway Pacific coal export proposal to be the last claim on the spectacular potential of Cherry Point. As Weimer observed, all manner of industrial schemes have been proposed in the past 40 years and all have failed because their backers couldn’t prove that they would not damage the marine ecosystem.

Other schemes and threats will come along, Weimer predicts, until someone actually buys and retires the SSA property at Cherry Point.

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