The Clean Gulf Commerce Coalition and the Sierra Club said Dec. 9 that a third and final major new coal shipping proposal at the Port of Corpus Christi, Texas, has been canceled, according to documents from recent Port Authority meetings reviewed by the coalition.
Ambre Energy, an Australian company with U.S. coal mining interests, has terminated its lease and will not pursue development of the project, the environmental groups said. The failure of each of the major new coal export terminals in Texas casts further doubt on the viability of the international coal market and new export facilities in Gulf Coast ports, they added..
In August, New Elk Coal and its parent company, Cline Mining, terminated a lease for a planned coal export terminal, and development of the La Quinta Trade Terminal was put on hold after grassroots activists rallied against it and Sierra Club released a report in early 2012.
The coal export industry faces resistance from community and environmental activists concerned about coal-dust air and water pollution, rail and barge traffic, the groups said. Ambre Energy has also encountered obstacles in trying to develop coal export terminals in the Pacific Northwest as well, the groups added.
The Ambre Energy website doesn’t show any announcements about termination of the Corps Christi project. It says about the project itself: “Existing port air emissions permits allow immediate coal shipment up to 1.5 million metric tons. Ambre Energy is investigating options for increasing this tonnage. The Port of Corpus Christi allows Ambre Energy to access South American and European markets for thermal coal.”
Ambre has interests in the operating Decker coal mine in Montana and Black Butte coal mine in Wyoming. It looks at the port projects as a way to get its own and other coals onto the export market.
Ambre has worked out a lease termination deal with port staff
Said a briefing book prepared for the Port of Corpus Christi’s board meeting of Dec. 10 about a proposed lease termination agreement with Ambre: “In 2011, Ambre Energy North America Inc. signed a five-year lease (with five 5-year options) for 14.5 acres at the Bulk Terminal under the name of Gulf States Bulk Terminal, LLC. … The coal export market has dramatically declined in the last three years, and Ambre no longer considers a coal export terminal viable in this area. Ambre approached staff about an early termination of their lease obligation. Negotiations between Port staff, the Port’s legal counsel, Ambre representatives and Ambre’s legal counsel have resulted in Ambre’s agreement to pay all of the base rent through the end of 2013 and a termination fee of $217,500 for base rent in 2014. … Staff recommends approval of the attached Lease Termination Agreement with Gulf States Bulk Terminal, LLC. We believe this property can be utilized for other purposes as identified in our new Strategic Plan.”
The briefing book said about prospects for coal exports in general: “Over the past four years interest in exporting coal at the Bulk Terminal has gone from no interest to a high of 40 million tons per year and then back to seriously diminished interest. Currently the export coal market has shrunk substantially. The domestic market has seen older coal fired power plants closed with some being refitted to burn natural gas. Wind and solar power driven by regulatory incentives have created additional pressure on coal. The enthusiasm for export terminals among coal producers has diminished. At the peak there were 185 million tons per year of new export capacity planned, mostly on the West Coast but also on the Gulf Coast. There are only three projects in the Pacific Northwest still being pursued. Together they would total about 45 million tons per year of export capacity. In the Gulf there are a handful of projects moving forward with backing from coal producing companies. Discussions with a variety of coal producers, railroad representatives and brokers leads to the conclusion that for the next two years it appears that the coal export market will not shift significantly up or down.”
Said the briefing book about exports of petroleum coke, which is often burned in coal-fired power plants: “The core business of Bulk Dock 2 is the export of petroleum coke. Additional coke shipments go from the Bulk Terminal by rail to cement kilns in Mexico. With the ongoing shift of Corpus Christi area refineries to lighter Texas crude oil, the export volume of coke at Bulk Dock 2 has declined from a high of 1.25 million tons in 2011 to a current forecast of 850,000 tons in 2013. Assuming no further change in refinery crude runs and pet coke production, volume at Bulk Dock 2 over the next five years is likely to remain at about 850,000 tons per year. Approximately 250,000 tons a year are being exported to Mexico by rail through the terminal’s outbound cargo handling equipment.”