International Investors Plan Coal Terminal In Coos Bay

Apr 18, 2012

Coos Bay is one of six ports in the northwest pursuing a deal to build a coal export terminal. The coal would come from mines in Montana and Wyoming. If the companies reach a deal with the port, it won’t be the first time coal is big business on Oregon’s south coast.

Rolling green hills rise up around the port of Coos Bay. Today, quiet neighborhoods and grocery stores spread across the hills. But 100 years ago, men were digging up coal here.

Clausen: “There’s mines all over this country”

That’s Max Clausen. He’s 80 years old. He owns an oyster farm, and grew up in Coos bay.

Clausen remembers visiting his grandfather’s coal mine when he was six or seven years old, in the 1930s.

Clausen: “He had a railroad going down into the mine, and a Shetland pony to pull it”

White settlers opened the first mine in Coos Bay in the 1850s. By the end of the century, there were more than 70 mines. They supplied coal to San Francisco, to fuel railroads and ships.

Joy Robins lives in a Coos Bay neighborhood called Libby.

Robins:“Well come back here, I’ll show you something about the history”

She says Coal miners helped buy a bell for the local school. In her house, Robins points to a portrait of man with a mustache hanging on a bedroom wall.

Robins: “My great grandfather, from Turin Italy, Thomas Bassanti, worked in the coal mines.”

Miners looking for work came from Scotland too, and Pennsylvania. But in the 1900s, fuel oil began to replace coal on the west coast. By the 1940s, the last mines shut down. Coos Bay’s remaining coal reserves are small and low grade, and haven’t attracted much attention.

But for the past six months, the Port been negotiating with investors. They are interested in moving coal from vast mines in the powder river basin in Montana and Wyoming across the Pacific.

David Koch is the Port’s CEO. He says three companies are drawing up plans for a terminal that could load ships with coal on a sandy spit near the entrance to the Port.

Koch: “We have a terminal operator, an end user, and a commodity trader in this project.”

Koch says the negotiations are to export up to 10 million tons of coal from the port every year. The coal would be purchased by a power utility company in Asia.

Koch: “The destination for the coal from Coos Bay is not China. It is some other Asian country.”

The Port has signed a confidentiality agreement and isn’t naming the companies involved.

But through a public records request and interviews EarthFix has learned that Mitsui, an international trading firm headquartered in Japan, is involved in the negotiations.

A California based company that specializes in running terminals and loading ships, named Metro Ports, is also involved.

Mark McMullen is Oregon’s state economist. He says Coos County desperately needs jobs. But he’s skeptical than a coal export terminal will effectively stimulate the local economy.

McMullen: “Unlike Coos Bay’s early history when they were actually doing the mining and all the other associated economic activity, this would just be a waypoint where we’re just talking about a handful of long shore jobs on a permanent basis”

David Koch, the Port’s CEO, says that jobs are just part of the picture. The port is also expecting the companies interested in building a coal terminal to invest in local infrastructure. Especially, the local short line railroad that connects coos bay to the Willamette valley.

Koch: “Your industrial manufacturing base in coos bay is highly depending on having a reliable freight rail transportation system.”

Coos Bay is isolated, and not served by any interstate freeway. So Koch says having a rail line to move products cheaply is crucial to the community’s economic viability. And the rail line between Coos Bay and Eugene needs improvements, before it can handle coal trains 135 cars long. In fact, Koch says without upkeep, the rail line could fall out of use entirely.

Koch: “We’ve got about $40 million of repairs on just the bridges alone.”

Koch says the port has asked the coal terminal developers to pay for upgrades to the rail line.

McMullen, the state economist, says making the rail line stronger could help the port attract more business.

But he cautions that some infrastructure investments necessary for coal transport don’t benefit other industries much. And, as Coos Bay experienced in the past:

McMullen: “These energy commodities are certainly a boom and bust proposition. And foreign demand can evaporate as fast as it materialized.”

The Port says the companies it is working with haven’t signed any binding deals to yet to buy land or build a coal terminal in Coos Bay. They could still decide to go elsewhere.

Copyright 2012 Northwest News Network