Peabody Energy has completed a deal to ship Powder River Basin coal to Asia via a planned export terminal in northwest Washington.
The deal with Seattle-based SSA Marine will allow St. Louis-based Peabody to ship up to 24 million metric tons of coal per year via the Gateway Pacific Terminal near Ferndale, Wash.
The port would be Peabody’s West Coast hub for exporting Powder River Basin coal to Asian markets, Peabody said in a media release Monday.
It’s the largest West Coast export deal so far for coal mining companies with interests in Wyoming.
Another coal export terminal proposed in Longview in southwest Washington has drawn environmental opposition. That Millennium Bulk Logistics terminal would be a joint venture between Australia-based Ambre Energy and St. Louis mining giant Arch Coal Inc.
In January, Arch Coal announced a five-year deal to ship coal from a terminal near Prince Rupert, British Columbia. The deal would allow Arch to ship up to 2 million tons of coal in 2011 and up to 2.5 million tons each year from 2012 through 2015.
Cloud Peak Energy, a wholly-owned subsidiary of Anglo-Australian mining giant Rio Tinto, said it shipped more than 3 million tons of Powder River Basin coal from Montana to Asia last year via the Westshore terminal in British Columbia.
The planned terminal near Ferndale would have a maximum capacity of about 54 million tons, SSA Marine vice president Bob Watters said Tuesday.
Peabody is the first customer, but the company is also targeting other customers to export grain, potash, calcined petroleum coke and other products, he said.
“We want to design it to be very agile,” Watters said. “We want a broad-based portfolio not tied to one particular commodity.”
On Monday, SSA Marine applied for state and federal permits for the $500 million terminal at Cherry Point near Ferndale, triggering formal environmental review, said Faith Lumsden, the state’s director of regulatory assistance.
Critics of the Longview project say increased coal exports could harm the environment and worsen global warming by increasing the burning of fossil fuels. Environmental groups have appealed to Washington’s Shoreline Hearings Board over a permit awarded for the port by Cowlitz County commissioners.
Watters said the SSA Marine project would bring in $54 million in tax revenues to local and state governments during the two-year construction period, and about $11 million annually in ongoing operations.
The project will go through an extensive environmental review, but he added that the company is doing what it can to lessen the harm, including proposing to cover the storage facilities for the different commodities, as well as conveyor systems.
“We’re working very hard to make this work with the environment and to protect the environment,” Watters said, noting that the cargo facility has a large buffer area and uses only one-third of 1,100 acres.
Bob Ferris, executive director of RE Sources for Sustainable Communities, and others raised questions about local health and environmental impacts, train traffic and contamination from coal dust.
“Building a coal export terminal in Washington represents a step in the wrong direction,” said Ferris. “What century are we in if our economic future is pinned on the hopes of shoveling coal? There is a better path for Bellingham — and Washington.”
St. Louis-based Peabody said that coal export volumes would depend on global market demand, terminal capacity and other factors.
The application begins a joint environmental review process with the U.S. Army Corps of Engineers and Whatcom County as lead agencies, Lumsden said.
The company hopes to start construction in 2013 and open the terminal in 2015. It would employ about 430 workers at full capacity. SSA runs 125 marine terminal operations around the world.