In a case that may feature arguments about improper “forum shopping” before any arguments about the merits of the case itself, several environmental groups have sued the U.S. Export-Import Bank in a federal court in California over coal exports out of East Coast ports in Maryland and Virginia.
The suit was filed July 31 in the U.S. District Court for the Northern District of California, considered one of the most liberal courts in the country, by plaintiffs including the Chesapeake Climate Action Network (as in the Chesapeake Bay in the eastern U.S.), Friends of the Earth, Sierra Club, West Virginia Highlands Conservancy, Center for International Environmental Law, and Pacific Environment.
They are challenging the Export-Import Bank of the United States’ (Ex-ImBank) approval in May 2012 of a $90m loan guarantee in support of coal marketer Ernie Thrasher’s Xcoal Energy & Resources LLC without complying with the National Environmental Policy Act (NEPA). The parties said the Northern California court is a proper venue since several of the plaintiffs are based in and around San Francisco.
No arguments had been filed in the case as of Aug. 19, so it remains to be seen whether forum shopping becomes a key initial issue. More logical courts for this case to be pursued in would be in Washington D.C., due to the Ex-ImBank’s status as a federal agency, or in Maryland or Virginia.
The $90m loan guarantee facilitates a commercial loan between Xcoal and PNC Bank N.A., and supports Xcoal’s mining, transport, and export of coal, the lawsuit noted Ex-ImBank’s financing enables X coal to broker an estimated $1bn in sales of coal for export from mines in Appalachia, with transport of that coal by rail to port facilities in Baltimore, Md., and Hampton Roads, Va. The coal would then be unloaded, stored and otherwise handled at the points, then loaded to ship for transport to clients in China, Japan, South Korea and elsewhere.
“These activities have significant adverse effects on human health and the environment,” said the lawsuit. “For example, coal mining, transport by rail in open cars, unloading from rail cars to storage piles at port, and reloading onto ships, all emit large quantities of coal dust. This coal dust is concentrated in mining communities, along rail lines, and around export terminals.”
The plaintiffs request that the court:
- declare that Ex-ImBank’s approval of a $90m loan guarantee to Xcoal for coal exports without conducting any environmental review violates NEPA and declare that such approval is therefore void;
- order Ex-Im Bank to rescind the $90m loan guarantee; and
- order Ex-ImBank to comply with NEPA by preparing an environmental impact statement (EIS), an environmental assessment (EA), or otherwise analyzing and disclosing to the public all the environmental impacts of Xcoal’s coal exports before providing financial assistance for such activities.
Xcoal, headquartered in Latrobe, Pa., supplies low-, mid-, and high-vol coking coal from mines in Appalachia to customers throughout the world. Xcoal manages the entire supply chain from the mine to its customers’ overseas port facilities, shipping coal primarily from the CSX Transportation and CNX port terminals in Baltimore and Lambert’s Point port terminal in Hampton Roads.
These are the kinds of legal arguments that various environmental groups are trying to use against coal export terminal projects in the works in the Pacific Northwest and around the Gulf Coast region.