Posted by: JaredFurtado on Dec 8, 2011

With aging coal-fired U.S. power plants shutting down, major American coal companies are exporting ever-larger amounts of coal to China. Now, plans to build two new coal-shipping terminals on the West Coast have set up a battle with environmentalists who want to steer the world away from fossil fuels.

By Jonathan Thompson

Twenty-five years ago, the U.S. tobacco industry’s future looked bleak. The health consequences of smoking had seeped into the collective American consciousness, and the industry was fending off a barrage of liability lawsuits. Nevertheless, a few cigarette executives found room for optimism, comforted by the fact that a seemingly infinite overseas market could more than make up for losses at home. “No discussion of the tobacco industry ... would be complete without addressing what may be the most important feature on the landscape, the China market,” said Rene Scull, vice president of Philip Morris Asia, in 1986. “In every respect, China confounds the imagination.”

Coal is the cigarette of our new age, and not just because burning it causes respiratory problems. Demand for one of the dirtiest fossil fuels is expected to stagnate or diminish here in the U.S. So coal companies — particularly those that mine the vast reserves in the Powder River Basin in Wyoming and Montana — are looking for a new place to peddle their wares. They’ve found it in China. “China right now is having blackouts because they don’t have enough coal to fuel their electricity facilities,” Gregory Boyce, CEO of the world’s largest coal company, Peabody Energy, told CNBC this spring. “They continue to import more and more coal and they continue to look for coal resources across the globe. So we don’t see any signs of that slowing down.”

The Powder River Basin has sufficient coal to help light China for years — the problem is getting it there.Peabody has partnered with SSA Marine in hopes of building a new terminal near Bellingham, Wash. Arch Coal is working with an Australian company, Millennium Bulk Terminals, on a proposal to turn an old Reynolds Metal site into a coal terminal on the Columbia River at Longview, Wash., just downstream from Portland, Ore. The Longview proposal was put on hold this spring after leaked internal documents showed that the proponents planned on building a bigger terminal than they had applied for, but they say they will re-apply.

Fearful that mining and burning huge quantities of Powder River coal will worsen global warming, environmental groups have targeted the port projects as a vital chokepoint. This summer, green activist and author Bill McKibben visited Bellingham to rally strong local opposition to the Gateway terminal. And the Sierra Club and Earthjustice have buttressed the legal fight against it, helping to convince the state to deem an old permit for development at the terminal site invalid.

The battle over the ports is reminiscent of a far more acrimonious fight over efforts to ship Alberta tar sands oil to Texas refineries via the proposed Keystone XL Pipeline — a project that also is in limbo following President Obama’s decision to delay a ruling on the pipeline until after the 2012 presidential election. Environmentalists believe both struggles are crucial to the effort to steer the world away from fossil fuels and onto renewable sources of energy, particularly given the lack of international action on global warming.

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