A Dustup in Oakland Over Plan to Ship Coal Through New Terminal

California no longer mines coal, and relatively little of its electricity comes from coal-fired power plants. But it's still legal to export the fossil fuel from here — and lucrative.

The privately owned Levin-Richmond terminal, for instance, ships more than 1 million tons of coal a year.

As the U.S. market for coal dries up, producers are looking for more places to ship it to countries still hungry for fuel.

That’s what drove Utah recently to approve a $53 million investment in a cargo terminal set to open in West Oakland in 2017 -- a move that has set off a political firestorm here.

Some Oaklanders fear that trains carrying coal to ships in the harbor will further threaten the health of residents.

“Coal is just part of what is happening to this one community,” says Margaret Gordon, co-director of the West Oakland Environmental Indicators Project.

Gordon, 69, has been fighting pollution in her neighborhood for decades. There's plenty of it. This part of town experiences a high incidence of asthma among children and significantly lower life expectancies than more affluent parts of the city.

On a drive through West Oakland, Gordon points to a freight train rolling by.

“See how this train is coming through?” she says, “That's how close the train is going to be to where the people are.”

It’s just a few blocks from a large apartment complex that’s already subject to around-the-clock diesel exhaust from trucks going to and from Oakland's busy port.

“One neighborhood, one area — one little area of the city has all this going on at one time,” says Gordon.  “Three freeways, a post office distribution center with trucks, a port facility, soil that needs to be remediated, a smelting company, recycling company, a Superfund site -- now just add the coal terminal to it!”

If the trains start bringing coal to the new bulk terminal, Gordon worries they'll spew dust all over her neighborhood. But one of the cargo terminal's developers promises that won't be a problem.

“We have eliminated that problem because we will cover the rail cars,” says Jerry Bridges, president of Terminal Logistics Solutions, the company awarded a contract to build and run the Oakland Bulk and Oversized Terminal (OBOT). Bridges says the facility will be able to handle 9 million tons of bulk cargo a year and expects 4.2 million tons of it to be coal.

“As they are loaded at the origin, at the coal mine, and as they transit from the mine to the port, there will be no dust coming off of the trains,”  Bridges says.

The terminal, he says, will also be clean. To demonstrate, he holds up a picture that depicts the typical way terminals handle coal.

“Just open piles of product laying on the ground, with water being sprayed on it to keep the dust down,” Bridges says. "That's the way it's handled everywhere else in the rest of the United States.”

Bridges holds up another picture depicting white domes on a pristine dock, saying, “This is what our terminal would look like.”

According to Bridges, the bulk terminal will use new technology to keep dusty material like coal enclosed all the way from the mines to the ships that will carry the cargo overseas. Coal cars will dump their load into an underground conveyor system, he says, which will whisk it into vessels' cargo holds.

But Bridges' assurances of a clean, safe coal facility have fallen flat with Mayor Libby Schaaf and the City Council, which voted last year to oppose shipping coal through the city.

“We're not going to let ourselves be fooled or falsely placated into thinking something is not what it is.” says Councilman Dan Kalb, whose district lies north of the terminal site.

Oakland officials awarded California Capital and Investment Group (CCIG) to develop its share of the old Oakland Army Base. CCIG President Phil Tagami has been a major force in Oakland development, and a well-connected one. Tagami's firm has led two landmark redevelopment efforts financed largely, as the new port facility is, with public funds -- the Rotunda Building and the Fox Oakland theater. The developer was a close ally of Jerry Brown during his tenure as mayor, with Brown appointing him to serve on the Port of Oakland board.

Kalb notes that Tagami promised no coal would move through the new port when the question arose early in the development process.

“He would never let coal go through his property -- this is what he said to my face here in City Hall and to others, too,” says Kalb. "We’re just trying to hold him to his word. That’s all. It’s not any shocker what the city is doing. What’s shocking is what the private developer’s doing, and their partners.”

Tagami declined to be interviewed for this story. So did Oakland's Mayor Schaaf. The two are reportedly negotiating.

But emails obtained through a public records request show the two butting heads.

In one, Schaaf orders Tagami to honor the city's ban on coal. Tagami replies that he has the right to export any legal commodity, including coal, and has all the permits to do so.

Jess Dervin-Ackerman of the Sierra Club's San Francisco Bay chapter, which opposes coal exports because of local impacts and because they may promote climate change, says that’s just not true.

“Coal was never considered as a commodity that was going through during any of the environmental review, which is supposed to consider all the impacts not only on an environment but the people that live near the project,” she says.

Dervin-Ackerman says the city has leverage it can use to delay the terminal project if necessary. Officials could reopen the environmental review or reopen the development agreement.

Either action would create uncertainty, which can spook investors.

Jerry Bridges, head of Terminal Logistics Solutions, says he hasn't signed any contracts with coal shippers yet and is still raising the $260 million to build the facility.

“I’ve thought about what if the project gets killed in Oakland?” says Bridges. “Then it gets killed, and we go away.   But coal is a product that's going to ship, and it can ship from Oakland or it can ship from somewhere else.”

Bridges says Oakland could lose out on as many as 100 on-site jobs -- half of which go to locals -- and another 2,600 jobs in related services for the terminal, and all the other economic benefits of running a world-class export terminal.

Oakland's City Council has set a hearing for Sept. 21 to look at the public health and safety concerns associated with coal dust.

"The accurate information is going to come out," says Kalb. "Then, based on the record, the city will have an opportunity to enact regulations that all parties will have to follow."