Coal-export terminals proposed at Cherry Point in Whatcom County and in Longview, Cowlitz County, are irrelevant because Asian coal markets are so weak, according to an industry analyst who has offered some of the industry’s most bullish forecasts.
Asian coal markets are so weak that two export terminals proposed for Washington once considered vital are now irrelevant, according to an industry analyst who typically has offered some of the industry’s most bullish forecasts.
The Feb. 10 report was written by Andy Roberts, an analyst at Wood Mackenzie, who less than three years ago was boosting the long-term prospects of the Gateway Project proposed at Cherry Point in Whatcom County and the Millennium bulk terminal in Longview, Cowlitz County.
But rapid changes in coal’s fortunes show what a miscalculation the investment in the ports was, Roberts wrote.
In addition to stiff opposition from tribal nations and community and conservation groups, the economic wind has fallen out of the projects’ sails. Asian demand has weakened to the point that coal from the Powder River Basin won’t be competitive in the market until well after 2020, Roberts wrote.
- 10 stabbed, beaten at white nationalist rally in California VIEW
- Watch: Fan runs onto field in front of fly ball during Mariners-Cardinals game
- Microsoft draws flak for pushing Windows 10 on PC users
- The slave who taught Jack Daniel how to make whiskey
- This is how much more you’d have to pay for a home near light rail
Most Read Stories
Railroad carload traffic in coal is also through the floor, with no pickup in sight, according to statistics from the Association of American Railroads, in more evidence of the big coal fade.
Meanwhile as Roberts reports, non-coal alternatives are gaining traction, supported by policy and regulation. “Building new Pacific Northwest coal ports, once seen as essential, is now viewed as nothing more than a risky long term bet,” Roberts wrote.
For some, it’s a surprise to hear one of coal’s biggest bulls turned bear.
“This is to me a shocking reversal,” said Clark Williams-Derry, senior researcher at the Sightline Institute, a Seattle think tank. “They have consistently been the coal industry’s darlings precisely because they are always so optimistic and so bullish on coal prices.”
Cloud Peak, a western coal producer that has a stake in the Cherry Point project, has been cutting back shipments to Asia through an export terminal in British Columbia.
The export markets have been so poor that Cloud Peak announced in October it would make undisclosed payments to get released for three years from contractual obligations to ship specified volumes of coal through the Canadian terminal.
Rick Curtsinger, a company spokesman, says Cloud Peak offers the benefits of low-sulphur, low-ash coal and “remains committed to serving Asian utility customers long term as the region grows.”
Environmentalists see no rebound for coal.
Markets in the U.S. also are receding amid new regulations in development on coal-fired power plant emissions, and the recent announcement by U.S. Dept. of Interior Secretary Sally Jewell of a moratorium on new federal coal-mining leases on public lands.
“The change in the market place has been breathtaking and there is nobody out there who thinks coal is coming back,” said Jan Hasselman, an attorney with Earthjustice working with tribes and communities fighting fossil fuel transport projects on both sides of the U.S.-Canada border.
“I wake up every day wondering if today is the day that these guys give it up,” he said of the coal ports’ developers. “The message to the region is it is time to move on.”