Friday, July 29, 2011

Not a Done Deal: Coal Trains Through Bellingham

One of the more potent arguments advanced by supporters of the Gateway Pacific project at Cherry Point is that coal trains will inflict their presence on Bellingham whether or not the coal export terminal is built. We’ll get the burdens, but none of the benefits. (Kind of like Mt. Vernon and communities on south if the terminal IS built at Cherry Point, but never mind.)

The “train traffic is unavoidable” argument rests on the assumption that our neighbor to the north, Canada, will be able and willing to export at least as much additional American coal as would be exported through the Cherry Point terminal. This means that Canadian ports would have to handle an additional 48 million metric tons per year, or one and a half times as much coal as the largest export terminal currently operating in North America, to result in the same train traffic increase through Bellingham.

It has occurred to me that normal people, who have lives, may not know where Canadian coal export terminals are located.
  • The second largest coal export terminal in North America is located just north of Whatcom County and south of Vancouver: the Westshore Terminal at Roberts Bank, with an export capacity of 29 million tons per year (discussed in greater detail in my last blog).
  • Another coal export terminal, the Ridley Coal Terminal, is in Prince Rupert, B.C. That terminal currently has an export capacity of 12 million metric tons per year (website is here).

Prince Rupert is almost in Alaska – click here for a map. According to Google Maps, Prince Rupert is 664 miles north of my house, or a 17-hour drive. I’ve been there (by plane, not by car) – I went there for a conference celebrating the opening of its new container port in September 2007. It’s small, and isolated, and appeared to be very beautiful in the very rare moments when it’s not raining. In fact, I just remembered that I have a picture of my happy group touring the bulk terminal:

But back to Bellingham. What about it? Will coal trains carrying around 48 million metric tons of coal per year pass through Bellingham to Roberts Bank or Prince Rupert, whether the Cherry Point coal terminal is built or not?

Well, neither the coal companies nor the railroads have confided their deepest thoughts and secret plans to me. But what I’m seeing about coal in Canada, and coal export capacities in Canada, makes me . . . skeptical.

This is a long blog. Every word is fascinating, of course, but for those of you might have other things to do today, here’s the Cliff’s Notes version. The bottom line:

It’s not a “done deal” that large quantities of American coal will travel through Bellingham to Canada (see “Framing the Argument – ‘Done Deal’ or ‘Almost Nuts’?”, below).

  • The Westshore terminal at Roberts Bank is shipping around 3 million tons of American coal right now. Those greedy Canadians are using it to export their own coal.So coal producers don’t view it as a realistic venue for substantially increased exports (see “Coal Through Roberts Bank?” below).
  • As much as 2.5 million tons of American coal is slated for export per year from Prince Rupert between now and 2015 (See “What About Prince Rupert?” below).
  • 3 million (Roberts Bank) + 2.5 million (Prince Rupert) = 5.5 million. That’s less than 48 million.
  • If American coal were allocated all of Prince Rupert’s capacity, including a slated expansion, 24 million tons could be shipped from Prince Rupert by 2015. That’s still less than 48 million tons.
  • Canadians have their own coal. A lot of it. And they export it. (See “Does Canada Have Any Coal Mines?”, below.) Those greedy Canadians have not welcomed American coal to Prince Rupert with open arms – or without attaching strings. So it’s not realistic to think that 24 million tons of American coal will be shipped through Prince Rupert anytime soon.
  • American coal from the Powder River Basin travels 2,700 miles through Bellingham en route to Prince Rupert. This is the “longest coal haul in the world.” It uses track resources, fuel resources, and just doesn’t make sense on a long term basis to some commentators.
  • Maybe Prince Rupert will expand even more than has currently been planned. Maybe the coal industry will find a way to make a 2,700 mile haul feasible – “solar coal train engine” has a nice, futuristic ring to it, with that strong aftertaste of irony that flavors so much of the coal export discussion. Maybe Thomas the Tank Engine himself will be conscripted to haul coal, along with his talking friends, thereby converting coal trains into a desirable tourist attraction. None of these conjectures or possibilities establishes that equivalent train traffic is inevitable, however, if there is no coal terminal at Cherry Point.

You should make up your own minds, of course, but the “inevitability” of coal trains through Bellingham doesn’t pencil for me.

Framing the Argument: “Done Deal” or “Almost Nuts”?

A typical discussion of the coal train issue took place on KBAI Radio’s “The Joe Show” about a month ago (click here for a link to the podcast) . Ken Oplinger, President and CEO of the Bellingham-Whatcom Chamber of Commerce, strongly supports the project. This is an edited paraphrase of radio host Joe Teehan’s interview with Ken Oplinger– my stenography skills aren’t what they could be – but it catches the drift:

Joe: Trains will come through Bellingham, and that’s a big non-starter for a lot of folks. Eighteen, nineteen trains a day, almost a train an hour through Bellingham is quite a lot.

Ken: . . . .You’ve got a number of trains, as you know, going to Roberts Bank and will start going through clear up to Prince Rupert in the near future. Trains for the terminal are a marginal increase. The trains will be there anyway.

Joe: Is that a done deal, that they will expand those facilities up there?

Ken: The brief answer to your question is yes. There isn’t enough room to increase that much at Robert’s Bank, but there will be an increase allowing a couple of other trains to go up. But where the real increase is going to be is at Prince Rupert.

Joe: Trains will really go through Bellingham to Prince Rupert?

Ken: What BNSF tells us is that they get more money per mile is for coal than any other commodity. They want it on their rails as long as possible. They want the trains here, not in Canada. If we don’t build this project, we’re going to have those trains.

Joe: . . .It sounds almost nuts.

Could Joe be right?

Coal Through Roberts Bank?

The coal that would be exported from Cherry Point, according to current contracts, would come from Peabody Coal’s Powder River Basin mines in Wyoming. Let’s start out by looking at current west coast exports of Powder River Basin coal.

This section and the next section of the blog, I might add, are based on this article in Coal Age, “the Magazine for Coal Mining and Processing Professionals.” Coal Age is a trade journal. It’s not written for the “Green Troops” of “enraged enviro-zealots.” And yes, it is the very same article that coined the timeless call to “gird [our] hemp-laced loins,” as discussed quite fully in my previous blog and the comments thereon.

Anyway –

Cloud Peak Energy is exporting coal to Asia from its Spring Creek Mine in Montana. (Cloud Peak, Spring Creek -- what beautiful names!)

In 2009, Cloud Peak exported 1.6 million metric tons through Roberts Bank. In 2010 it exported just over 3 million tons, “hampered only really by terminal capacity.” Here’s the situation:

Though constrained because of overall port capacity, Cloud Peak is the only PRB producer with an actual export footprint: it has leased space at Westshore. But with highly valuable Canadian coking coals crowding out all other room both at Westshore and across the way at Neptune Terminals, that little footprint allowed the company to really stay in the game and move forward. However, like all other producers, until a new high capacity terminal “is built, we are capacity constrained. Those who can, are feverishly working on building a port now,” Marshall said.

So, around 3 million tons, and probably not a whole lot more, of Powder River coal can be exported from the Westshore terminal at Roberts Bank.

What about Prince Rupert?

With Vancouver’s ports “already completely congested,” Arch Coal announced in January 2011 that it plans to export Powder River Basin coal through Prince Rupert. It has a five-year agreement allowing the export of up to 2 million tons of coal in 2011 and up to 2.5 million tons of coal for 2012 through 2015.

[Remember: Cherry Point would have a 48 million ton capacity.]

The Prince Rupert terminal can load up to 12 million tons of coal per year, with expansion plans that could increase the facility’s capacity to 24 million tons by 2015. Will Powder River Basin coal take up this capacity?

I don’t think so. Thanks to Coal Age. Which says:

Canadian coking coal producers, furious a ‘Crown’ or quasi-state owned company, would sell precious capacity space to a foreign producer were eventually assuaged because the deal mandates that part of Arch’s fees will be used to expand the overall facility.

So, what we KNOW is that as much as 2.5 million tons per year of coal can be shipped from Powder River Basin to Prince Rupert through 2015.

And after 2015, nothing is inevitable.

Why do I say that?

The train trip from Wyoming through Bellingham to Prince Rupert is 2,700 miles – the longest coal train haul in the world.

And so, as Coal Age says with nice understatement, “one of [Prince Rupert’s] major downsides” is its “extreme haulage distance.” The article observes, “While some have called Arch’s decision to send coal that far a ‘hail Mary move’ to ensure an Asian market presence, others see it as a prudent way to be seen as a player.”

Is a “hail Mary move” the same as a done deal? I didn’t play football in high school, but my father was a fan. I think they’re not the same.

Let’s look at another perspective: that of a rail consultant (click here for the article). First, we need to understand that the current route to Prince Rupert is not the most direct route from the Powder River Basin. The most direct route would go through the Canadian border at Sweetgrass, Montana, not at Blaine, Washington. As the article states,

The key fact here is that the alternate routing [through Montana] is approximately 800 miles shorter in distance, a significant difference of 30% for loaded coal trains. And not only is the route shorter, but there is less route congestion.

“Route congestion”? The “larger issue,” the article observes, “is the impact from navigating congested terminal areas including Vancouver WA, Tacoma, Seattle, and Vancouver BC.”

Yoo hoo! Don’t forget. . . Bellingham?

The article further observes:

Contribution of coal trains is critical to rail networks due to the tremendous amount of resources they consume. They consume many locomotives and significant amounts of fuel. They also devour a significant amount of line capacity while they are moving across the network (often at a pace slower than manifest rains), and they consume additional line and terminal capacity while stopped – when inevitably queuing to be loaded and unloaded.

Are these good things? It doesn’t sound like it. So why would anybody think that it’s a good idea to haul a heavy commodity like coal 2,700 miles before it even goes onto a tanker? These are the author’s words, not mine:

  • “Could this coal be a test of a new supply chain by the Chinese customer? These sorts of test runs have precedent around the world . . ..”
  • “Sometimes they are merely “loss leaders” – selling goods/services at a near loss on the promise of future gains. Perhaps the prospect of future China coal contracts is enough for both BNSF and CN to promote business on this (now) longest coal route in the world?”
  • “Another theory: Was this a contract partially borne from coal production issues in Australia due to the floods – in other words, is this move triggered by a short-term supply disruption?”
  • · “Has the coal market been impacted on the supply side, which compounds demand for coal due to ‘newer’ consumers such as China?
  • · “Or, could this be the beginning of a structural shift toward North American coal being shipped to China?”

Only the last bullet might lead to a “done deal” for trains running through Bellingham.

Or would it?

A couple of days ago, on July 27, Canadian Pacific railway held a conference call where it answered questions from investors (transcript is here). One investor asked whether Canadian Pacific might have an “opportunity” to handle Powder River Basin coal through Westshore and other Canadian export facilities. A Canadian Pacific spokesperson replied:

I think the question really for us over the medium term is whether this is long-term sustainable market, given the sourcing alternatives for thermal coal in Asia and whether on a long-term basis, if there's an investment that would be required, you would want to have the right type of commitment to do it. So I think my message to you would be is that we're looking at it.

To the extent that railroads are expressing uncertainty about long-term market sustainability and returns on investment, that sounds like an undone deal.

Does Canada Have Any Coal Mines?

Finally, it might be worth noting that the Powder River Basin is not the only coal-producing area that might want to use Canadian ports for coal export.

Teck owns all the coal mines in southeastern B.C. Here’s a blurb from Teck’s web site:

We are the world’s second largest exporter of seaborne steelmaking coal, with five mines in British Columbia and one in Alberta. We wholly own the Coal Mountain, Cardinal River, Fording River and Line Creek mines, and have a 95% partnership interest in the Elkview mine and an 80% joint venture interest in the Greenhills mine.

The bulk of our coal production is high quality steelmaking coal, also known as metallurgical coal. The majority of our coal is exported for steel production, with approximately 90% transported west by rail to the coast of British Columbia and shipped from there to Asia, Europe and South America. Our largest markets in Asia have traditionally been Japan, Korea and Taiwan, and now China is emerging as a significant importer of steelmaking coal.

We foresee strong growth in demand for steelmaking coal in China, which is currently undergoing the biggest process of urbanization and industrialization in human history.

Just a guess, but maybe Teck might be planning expanded coal exports through Canadian ports.

And it’s not like Canada isn’t interested in increased resource extraction. Cruising around the internet, I ran into this report in the Canadian Mining Journal:

Fortune Minerals, based in London, ON, has formed an 80:20 joint venture with Posco Canada to develop the Mount Klappan metallurgical coal project 330 km northeast of the port of Prince Rupert. Posco is a subsidiary of one of the world's largest steel producers with headquarters in South Korea.

With 2.8 billion tonnes of coal, Mount Klappan is called one of the largest undeveloped deposits of metallurgical coal in the world.

Just a wild guess, but if and when this mine is on-line, it might be aiming for the export market, and the closest export terminal for this Canadian coal might be the Canadian port of Prince Rupert.

All in all--

Maybe “the world’s longest coal haul,” running Powder River Basin coal 2,700 miles through Bellingham, will make sense in the long run --

Despite the fact that it takes place in an increasingly crowded urban rail corridor.

Despite the fact that it requires the burning of additional fuel, and that fuel may someday cost more than it does today.

Despite the fact that there does not seem to be evidence –convincing, publicly-available evidence, anyway – that the export terminal at Prince Rupert has the capacity to accommodate that much more American coal.
“Done deal”? Sounds almost nuts.

Coal train photograph by Paul K. Anderson.

Crooked photograph of people standing in the rain, trying to look happy, by the author.


Lee Buchsbaum, "West Coast Exports Materialize," Coal Age, March 24, 2011,

David Lehlbach, "The Longest Coal Train Haul in the World? Feb. 23, 2011,

"Coal Development: Fortune takes Posco as partner for Mount Klappan project," Canadian Mining Journal, Jul 13, 2011,


  1. Oh my, Jean. Reading material!

  2. Sorry about that.

    The thing is -- the world is more complicated and interesting than sound bites would lead us to believe.

  3. You are confirming what the owner has asserted not just this time around but similarly asserted 15 years ago, that a bulk cargo terminal with docking and rail facilities will be adapted over time to changing markets. In the 90's shipping grain to Asia and USSR's eastern ports was where the money was, and at that time there was an accompanying willingness of investors to commit to terminal construction costs. But back then the owner was still doing battle with DNR and other agencies over herring. By the time the dust settled on those squabbles the grain export market wouldn't support the construction costs, and there were no investors. Today it's coal and again now the construction money's there. But SSA knows very well that world markets will continue to be fleeting; changing with political social and technological events as time goes on. SSA sees that in all their cargo operations, and they know Cherry Point will be no different. The somewhat over-hyped paranoia of coal as the product currently in market demand is misplaced because as you point out, there is a strong likelihood that those market forces and demands will change over time. The real issue is and should continue to be whether a bulk cargo terminal is an appropriate environmental and economic choice for our area. If we want to locally have a role in an expanding 'world economy' then a cargo terminal can make sense. If we want to turn inward with our mantra of 'vibrant local economies' then we'll instead say "to heck with being a regional player". Those are the real choices this proposal should cause us to debate.

  4. Andrew B.,

    No, that's not at all what I'm doing. I'm responding to claims by project proponents about a project backed by a contract with Peabody Coal to ship 24 million tons of coal, and with a submitted application that proposes to build capacity for 48 million tons of coal.

    "Over-hyped paranoia about coal" is a silly phrase, in light of the applicant's own proposal. Furthermore, please do some reading about the scramble going on to build coal ports on the west coast. Not "multimodal terminals," but coal export terminals. It's a fascinating story.

    Specifically, I'm responding to claims that the number of coal trains through Bellingham will be the same whether or not the project is built. The premise of these statements is that the number of coal trains WILL increase if the project is built, contrary to your claims that the terminal as proposed would be a "cargo terminal."

    That's just not factually accurate. If SSA submitted a permit for a "cargo terminal," I think that it would have a lot of support. But it hasn't. It submitted a proposal for a 48 million ton coal terminal that may, in Phase Two, handle as much as 6 million tons of other bulk commodiites. That's SSA's proposal, not anybody's "paranoia."

  5. Thanks for an extremely informative post, and a special thanks for the embedded "Cliff Notes Version" for those of us "normal people that have lives!"

  6. Squabbles? Over-hyped paranoia? You don't fool me, Andrew B.

    Thanks once again, Jean.

    Shannon P.

  7. Sorry for using trite language Shannon. Jean, I've worked through the conversion of a port's shipping terminal (to specialty equipment for the unloading, storage and reloading of large chinese-made wind turbine parts). It's a matter of being driven by markets, some of them barely conceived 20 or 30 years ago. I certainly understand the applicant for Cherry Point is building for coal. No argument there. But my experience is you can't build anticipating the future long-term demand for anything, whether it's foodstuffs, minerals, or any other processed or manufactured materials. You build for today's markets and you speculate on tomorrow's.

  8. Thanks, David and Shannon, for reading.

    And thank you, Andrew B., for clarifying your comments. I'm also aware of the difficulties of port planning in light of changing commodity prices and demands -- I've read decades of port planning documents relating to Washington and other west coast ports, and it's clear that ports are not exempt from the "bubble" mentality.

    Most recently, everybody thought that there could never be enough container port capacity. Now Tacoma, for example, is actively seeking new container clients, where a few years ago all anybody could talk about was container port expansion.

    Is coal different? There seems to be some hesitancy about this fever to build west coast coal ports in order to export Powder River Basin coal. My next blog may well be about the "Ghost of LAXT," the last coal terminal built on the West Coast, in Los Angeles. As a preview, here's an excerpt from an article describing that terminal's rapid rise and fall:

    "Two modern coal terminals were built on the West Coast in the last two decades of the twentieth century. One at the Port of Portland was built and failed within the 1980s, leaving barely-used equipment that had to be sold. Participants in the LAXT consortium were aware of that failure, but went ahead and built one of the finest coal terminals in North America, the only U.S. terminal capable of loading a 275,000 dwt vessel. Coal giant Peabody Energy dropped out of the consortium before the terminal was built, but other participants forged ahead and built it. It was commissioned December 4, 1997, and it stopped shipping coal in 2003. . . .

    Before getting too excited about looking for a new export terminal site, should we not make a rational decision about demand for our particular coal? Do we have metallurgical or high-Btu steam coal to sell, or do we hope the new Asian market is now so huge and undiscriminating we can sell low rank sub-bituminous coals into it? Will there be sufficient demand to justify a new coal supplier, or is this just another pipe dream to expand markets unrealistically? Let us not forget the same China that threatened to export coal 10 years ago is now viewed as a buyer with deep pockets and endless demand. How long will this last?"

    David Gambrel, "Building a Coal Terminal on the West Coast," Coal Age, 11/18/10,

    I don't know the answers to all of these questions. Nor do I know of a coal terminal that was successfully adapted for other commodities -- maybe you do, Andrew, and I'd be interested to hear about it. It certainly would be good to have more information about what would happen to the Cherry Point property if history were to repeat itself and the Gateway Pacific project went the way of LATX.

  9. No I don't have direct knowledge of a coal loading conversion to another use. My experience is with conversion from an outdated and inactive gypsum (conveyor) operation to modernized crane operations involving demolition, limited environmental remediation. and construction, all fairly common to any industrial redevelopment. From a port terminal perspective it was not a particularly remarkable project.

  10. Thanks for posting this extensive information. You are correct that sound bytes can't possibly suffice in this type of issue.

    Regardless of whether this quantity of coal -or any other bulk commodity- gets shipped from Washington State or British Columbia, the huge ships needed to transport it to Asian or other markets must share the same waterways.
    That may be even more worrisome to me than than the land-based facilities that must supply these Capesize Bulk Carriers.

    I did post a blog on this subject today at:
    Think about it.

  11. Jean,
    Is there a reason why my comment submitted yesterday did not survive the review process? I replied to your 'Dog That Didn't Bark' post on the candidate's positions on the coal terminal. I was attempting to add Tom Anderson's view, which was not mentioned in your post. I imagine it was the link to Tom's page on the topic that sent my reply into the black hole, requiring review, but I was expecting to see it showing up by now.

  12. The possibility of 487 Capesize and Panamax marine vessesls at Cherry Point (according to project documentation; see certainly raises issues that we need to understand. Thanks, John, for discussing this issue in your blog.

    The marine vessel issue that I'm most familiar with is air quality impacts, and they're formidable. Marine vessels are substantial sources of NOx, SOx, particulates, and air toxics. Air toxics aren't regulated directly by the U.S.. but we know that they're a problem associated with diesel emissions. And in case anybody believes that discussing health effects from diesel emissions is just a "scare tactic," please read pages 2-11 - 2-14 of this document:

    Closer to home, the Puget Sound Clean Air Agency has done quite a bit of work on air toxics – here’s a quick fact sheet ( and the overall web page (

    It’s hard to interest people in air quality because you can’t “see” what you breathe. We don’t have killing fogs in the U.S. any more, so most people aren’t aware of the acute, long term health effects of air pollution. That makes air quality a critical leadership issue. I think that physicians and others in our community who address public health are aware of these issues and will be an important voice in this discussion.