Ambre CEO confident US Pacific Northwest coal terminals will be built
Miami (Platts)--1Feb2013/339 pm EST/2039 GMT
While US coal exports are flat, market participants are bulking up
terminal capacity in the Gulf Coast and Pacific Northwest to handle seaborne
trade that's estimated to double over the next 15 years, a panel of experts
said Thursday at the Coaltrans conference in Miami.
Additionally, Ambre Energy's president and CEO, Everett King, said at
the conference that he's confident the contentious terminals proposed in the
Pacific Northwest will be built, partly based on "a hidden message" from the
US Army Corps of Engineers.
The terminals, King said, "can be a reality, albeit it will take longer,
be more costly and it will involve more than what anybody anticipated, but it
still can get there."
Ambre is working to develop the Gateway Pacific Terminal, also known as
Cherry Point, near Bellingham, Washington, which would have annual capacity
of 40 million to 45 million short tons.
The company is also working on a separate project, Morrow Pacific, along
the Columbia River in Oregon, which includes a barge facility that would take
coal by rail and transfer it to barges that would transit down the river to a
terminal west of Portland for loading onto seagoing vessels.
The two projects are among five in various stages of planning in the
King said a potential stumbling block to the projects is a "programmatic
environmental impact statement" proposed by parties in opposition to the
terminals that would assess the environmental impact of the whole of the five
projects on the region.
But King said that based on preliminary discussions with the corps for
the Morrow Pacific project, it's his belief the agency will seek only an
environmental review as opposed "to a full-blown EIS."
And while the decision would only affect the proposed barge operations
at Boardman, Oregon, King believes it portends well for the entirety of the
"If it's accepted, it's a hidden message," King said. "If the corps
wanted to make an EIS, it would have been an easy decision, but the decision
they made is appropriate."
King added that the permitting process is long and involved, and that
despite loud and motivated community opposition in the region he's confident
regulators will issue permits.
King said the company is prioritizing the Morrow Pacific project as it
has most of the infrastructure already in place and doesn't face the same
community opposition due to the absence of coal trains in metropolitan areas,
as would be required to ship coal to the proposed Gateway Pacific terminal.
King also said he feels confident most of the proposed terminals will be
built, which would have a significant impact on West Coast capacity.
"It's not far-fetched if all these projects stood up over a period of
three to five years, the capacity of all of these new terminals could add
120-140 million tons of capacity, in addition to the Canadian expansions,"
In the Gulf Coast, US coal exports were 51 million st in 2012, but
announced terminal and midstreaming expansions under way will increase the
region's capacity from 67 million st to 120 million st in the coming years,
said Cees Van de Mortel, chief operating officer of T. Parker Host, the
Norfolk, Virginia-based shipping company.
Van de Mortel said additional terminal expansion projects still in
conceptual stages could add another 40 million st of capacity to the Gulf
Coast, which includes terminals in New Orleans; Houston; Mobile, Alabama; and
Corpus Christi, Texas.
"The export market is slow, but the outlook for steam coal exports are
very good, with seaborne demand likely to double over the next 15 years,"
Van de Mortel said, adding that producers in the Powder River and Illinois
basins would be the primary beneficiaries.
Regarding the Panama Canal expansion, King and Van de Mortel said
it's unknown what effect it will have on the seaborne coal trade. While it
will shorten the sail time to Asia, which is a primary market for PRB and IB
steam coal, canal fees might negate the perceived gain.
The expanded canal, which is expected to double traffic when it opens in
2015, will be able to handle ship sizes up to the so-called "Baby Cape" range.
Capesize vessels, however, will still not be able to transit the canal.
"The jury is still out as to what that means for us and the commodity
market," King said. "Potentially, commodity exports will find logistic and
time management benefits, and it could open more East Coast opportunities for
met coal, but the canal would be nearly as competitive as the Pacific
--Andrew Moore, firstname.lastname@example.org
--Edited by Jason Lindquist, email@example.com