A controversial coal terminal at Fraser Surrey Docks has been given the green light.
Port Metro Vancouver announced August 21 that it has granted a permit to allow the Direct Coal Transfer Project at Fraser Surrey Docks to go ahead.
It will handle thermal coal from the U.S., which will arrive by rail and be transferred onto barges, where it will be taken to a transfer station on Texada Island and loaded onto ships destined for Asian markets for uses like coal-fired electricity plants. One train a day, made up of 125 cars of coal, is expected to move through the Metro Vancouver region on its way to Fraser Surrey Docks.
“Over the past two years, a significant amount of work and a number of comprehensive studies have gone into ensuring this project is safe and that concerns raised were addressed,” said Fraser Surrey Docks CEO Jeff Scott.
“We’re pleased that Port Metro Vancouver has granted the permit, and we will now begin moving towards construction.”
Currently, coal makes up a large portion of the bulk cargo shipped from existing terminals like Neptune in North Vancouver. Most of that material is metallurgical (or steel-making) coal that has been mined in British Columbia.
Ironically, just as a Port Metro press conference making the announcement was getting underway, Greenpeace, the Sierra Club and Climate Solutions were just wrapping up a press conference, in which they argued the long-term demand for coal in Asia was falling, meaning there is no good economic case for a coal terminal on the west coast.
Up until August 18, the Fraser Surrey Docks coal terminal proposal was one of four for the Pacific coast – two in Washington, one in Oregon and Surrey Fraser Docks.
That dropped to three on August 18, when the Oregon Department of State Lands (DSL) rejected Ambre Energy’s proposed Morrow Pacific coal export proposal.
According to an economic study by three environmental groups, that likely means there is no longer an economic case for the other two terminals proposed in Washington.
Thermal coal producers in the U.S. need access to China, India and South Korea, because there simply is no market for their coal in the U.S. anymore, thanks largely to the move from coal to natural gas by American utilities. The shortest, cheapest route there is through the West Coast.
In 2009, the demand for coal in China soared, along with the country’s rapid growth, prompting coal producers in Indonesia and Australia to ramp up production. So while demand increased, the price for coal remained relatively low.
Since April 2011, coal prices have dropped from $134 per tonne to $69.70 last week.
“Prices have collapsed,” said Clark Williams-Derry, deputy director at the Sightline Institute.
Scott told Business in Vancouver the $20 million coal terminal is expected to be completed by the fall of 2015.
He said the American companies that will use the terminal has not been announced yet.
“We hope to be able to announce that shortly, but we’re not in a position to announce the customers yet,” he said.
Port Metro’s two year permitting process for the project was dogged by complaints from residents and local governments, who were concerned about the environmental and health risks posed by trains loaded with coal passing through neighbourhoods.
Environmental groups are also concerned about the effect on marine life in the Fraser River and in the waters around Texada Island.
The chief health officers for the Vancouver and Fraser Valley health authorities raised concerns that an environmental impact assessment of the project completed by SNC Lavalin for the port did not include enough information about how it would impact human health.
Port Metro Vancouver required a Fraser Surrey Docks to do a second health assessment study. Based on that study, the port authority says it is confident the project poses “acceptable” risks to human health.
Fraser Surrey Docks will be required to continue to monitor air quality and report those results to the port. FSD is currently in a legal battle with Metro Vancouver, arguing the regional district has no jurisdiction over the air pollution it emits because it is on federally-regulated port land.
Regulations to control coal dust have also been tightened, said Jim Crandles, director of development and planning at the port. Burlington Northern Santa Fe Railway, the company that will be shipping the coal cars by rail, has committed to spraying a double layer of binding agent on the coal to prevent dust.
The port will not continue to monitor the impact of the coal shipping facility on the Fraser River, however Fraser Surrey Docks will not be permitted to transfer coal by barge during high winds. The port will monitor the sediment at the base of the coal loading facility.
According to the U.S. Energy Information Administration, global coal consumption will continue to increase at 1.3% per year to 2040. Longer term, the demand is expected to start dropping as major consumers move off of coal to cleaner energy sources.
But until then, if American coal producers are willing to invest in B.C. to provide new port infrastructure and jobs, why not take the money?
Williams-Derry said there are other impacts that need to be considered, including impact on the movement of other goods by rail.
“The problems with the notion of just counting up jobs at say a terminal is that it doesn’t look more broadly at potential jobs being lost to rail congestion or potential costs to the community resulting from rail traffic and coal dust and other environmental impacts, “ he said.
“The problem with a lot of these analyses of jobs is they know how to add but they don’t know how to subtract.”
