A federal judge’s decision to lift Oakland’s ban on coal shipment through its terminal will pave the way for coal exports even as the city promises to fight the ruling.
OBOT at a glance
The Oakland Bulk and Oversized Terminal (OBOT) is being developed as a marine bulk terminal on a former army base. Following the base closure, in August 2006, approximately 170 acres owere conveyed to the City of Oakland, and another 200 acres were transferred to the Port.
- After a decade of strategic planning for the redevelopment of the base, the Oakland Global project obtained funding and approvals to commence construction.
- Oakland broke ground on the public infrastructure and site improvement phase in October 2013.
- City infrastructure and site improvement construction is scheduled for completion in early of 2018.
A federal judge on Tuesday struck down a coal export ban imposed by Oakland, Ca., paving way for mining companies to use the city’s proposed export terminal to ship coal overseas — even as the city promised to fight the decision.
The ban, passed by Oakland’s City Council in 2016, violates a development agreement, US District Judge Vince Chhabria said in a 37-page ruling.
The legal dispute centered on whether the ban undermined an agreement between the Oakland and a company develo
ping a bulk loading terminal near the city’s port. The developer, Oakland Bulk & Oversized Terminal LLC, argued the city has no substantial evidence that shipping coal through the terminal would endanger the health of workers or surrounding communities.
“On the primary question presented by this lawsuit, Oakland is wrong,” Chhabria wrote.
However, Oakland Mayor Libby Schaaf promised to fight the ruling.
“This is a fight for the health of our community,” Schaaf said. “This is a fight for environmental justice and equity.”
“Oakland’s most vulnerable communities have unfairly suffered the burden of pollutants and foul air for too long. We will continue to fight this battle on all fronts; not just today, but every day.”
Developer Phil Tagami brought the suit in December 2016 on behalf of one of his companies, Oakland Bulk and Oversized Terminal LLC, five months after the City Council passed the coal ban.
The planned $260 million complex, known formally as the Oakland Bulk and Oversized Terminal, would be equipped to ship a total of 9 million metric tons of loose, non-containerized cargo every year. About half of that cargo total could be coal.
A September 2015 report by Tagami’s firm said the facility would minimize pollution by using covered rail cars, underground transfer compartments and enclosed conveyor systems for moving coal from trains to ships.
The use of Oakland’s export terminal is critical for domestic coal miners, who, faced with declining domestic demand for coal, are looking to send shipment to overseas markets. Yet Wyoming and Montana’s Powder River Basin, home to the nation’s largest coal reserves, is largely cut off from the world market without West Coast ports.
“Access to growing world markets for our coal reserves could be greatly enhanced — as well as the employment it would support throughout the supply chain — if we had the infrastructure befitting a global economic power,” said National Mining Association spokesman Luke Popovich.
Oakland, however, is among several terminals in California and the Pacific Northwest that have pushed to ban coal exports on health and environment grounds. Reversing the ban could increase exports by as much as 19 percent, according to the Sierra Club.
Even without the ban at the Oakland terminal, miners may still face obstacles trying to ship coal through the West Coast, according to Jeremy Sussman, an analyst at Clarksons Platou Securities.
“Most realists have come to the conclusion that West Coast states such as California, Washington and Oregon simply aren’t going to allow a lot of coal exports now or in the future,” Sussman said.
Wires contributes to this report.