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Created on: 2016-05-31 00:00:00
Last update: 2018-04-05 13:26:35
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About Oakland Bulk and Oversized Terminal
The project consists of establishing a commodities export facility at the port of Oakland in California. The facility is called the Oakland Bulk and Oversized Terminal and is located on the site of a decommissioned Army base. The terminal requires an investment of approximately USD250 million and is expected to ship between 9.5 and 10.5 million tons of coal each year to Asia. The terminal will be operated by Oakland based TLS (Terminal Logistics Solutions), which is said to be partly owned by Bowie Resources, a Kentucky based coal-mining company.
The history behind the proposed coal terminal is somewhat convoluted. In 2013, the Port of Oakland received two bids to construct coal export facilities at the port's Howard Terminal. One of these bids, from Bowie Resource Partners, proposed a facility with the capacity to export four million tons of coal annually, as well as one million tons of petroleum coke. The second bid, submitted by by Kinder Morgan, Metro Ports, and California Capital Investment Group (CCIG), included a facility with a likely coal export element. The Port of Oakland rejected both proposals in 2014 based on environmental impacts and public health concerns, among other factors.
In April 2015 TLS said it planned to start building a USD250 million terminal at the Oakland Army Base in Oakland Port before the end of the year, and hoped to finish the 35-acre project in 2017. Four Utah counties have secured USD53 million from a Utah state agency called the Community Impact Fund Board (CIB) to invest in the new terminal. Three of these four counties produce all the coal in Utah. In return for the investment, Utah would be able to send 49% of goods annually through the bulk shipping terminal, including coal. The Utah Community Impact Fund Board reportedly approved the investment with no written reports or studies, just the oral testimony of officials in the four counties requesting the money.
What must happen
The Utah Community Impact Fund should steer clear of investing public money into the proposed Oakland terminal which will likely export millions of tonnes of coal to Asia and would thus be responsible for adding vast amounts of CO2 into the earth's environment. At the same time financial institutions should put a hold on any funding of this project.
Concerns are raised over how this project will affect the community's safety, the environment and public health. "Low-income communities of color disproportionately overburdened by pollution are on the front lines of potential train derailment in West and East Oakland," said Ernesto Arevalo, East Oakland environmental justice and housing advocate. "The transportation of coal is another burden to these communities that are already facing other environmental risks and displacement." It will also undermine California's strong commitment to cutting carbon pollution, as the state continues to suffer from extreme drought, forest fires and other signs of climate disruption.
The official voice of the labor movement in the East Bay has come out against plans to export coal from Oakland. The Alameda Labor Council's executive committee passed a resolution opposing the export of coal from the bulk commodity terminal planned for construction at the city's former Army Base.
In terms of carbon dioxide emissions, the proposed coal export facility would export approximately ten million tonnes of coal each year, half of which would likely be from Utah. Ten million tonnes of coal amounts to at least 26 million tonnes of carbon dioxide emitted each year. That amount of coal and carbon is the rough equivalent of seven average (500 megawatt) coal fired power plants. To put it simply, to burn more coal of any kind makes air quality, respiratory illness rates, climate change and other problems much worse.
Having a coal terminal on the shoreline will also damage local water quality and aquatic life according to the San Francisco Baykeeper group.
If four coal-producing Utah counties invest USD53 million in the Oakland export terminal, Carbon County would hold the largest stake, according to documents acquired by Sierra Club through open-record requests. Carbon County would hold 33 percent of Utah's interest, followed by Sevier at 30 percent, Emery at 25 percent and Sanpete at 12 percent. For their investment, they would be guaranteed "throughput allocations" for their commodities equivalent to 49 percent of the terminal's capacity, the documents said. Together, they would earn a 10 percent annual return, paid on a preferred basis from the terminal's net income. Utah officials defend the investment, saying it can connect rural Utah's products, including alfalfa, soda ash, potash and salt, to international markets. But a term sheet indicates coal could monopolize Utah's share, consuming up to the full 49 percent of the terminal's shipping capacity.
Deception and allegations of money laundering and influence-peddling were all behind a scheme to export coal mined in Utah to Asia through a shipping terminal in Oakland, California. To avert public opposition to shipping coal from Oakland, that aim for a new terminal was kept secret for years, while USD 53 million in public funds in Utah that was supposed to be for local civic projects was diverted to help pay for the shipping terminal project. An investment firm that stood to gain USD one million and a rail line in the deal wrote the script. Utah elected officials supporting the plan took money from the coal company pushing the outlet for Utah coal, Bowie Resource Partners. And the secret scheme, once revealed, forced concerned communities in Oakland to scramble quickly to try to stop it. In Utah, a bill in the legislature to get around prohibitions on USD 53 million in community impact funds being used for an out-of-state coal terminal was criticized as a money laundering scheme. Ultimately the Oakland City Council voted unanimously to ban coal handling and storage, but developers are considering legal challenges still (source corruptionincoal.org).
Applicable norms and standards
U.S. Judge blocks Oakland's ban on coal
A federal judge has come to the decision that Oakland's coal-ban is in violation of a development agreement. Oakland enacted the ban in 2014 after it became clear that the proposed Oakland Bulk and Oversized Terminal (OBOT) would mostly be exporting coal. In response to the ban the developer started a lawsuit against the city for breaking their agreement and stating the city did not have enough evidence that the shipment of coal would endanger the workers and those living around the terminal. Although the judge's decision is a setback, the Sierra Club, working with the city, is not giving up yet, stating that "this decision is just one step in what we expect to be a long legal process".
Lawsuit against Oakland's coal ban moving to trial
The trial on Oakland’s coal ban will start on the 16th of January. The trial will focus on the reasons Oakland’s city officials had to ban coal and if they were substantial enough to conclude that coal poses a health risk.
Community groups ask for dismissal of lawsuit challenging Oakland's ban on coal
Earthjustice has filed a motion to intervene in the lawsuit form OBOT on behalf of the community groups San Francisco Baykeeper and the Sierra Club. The groups also filed a motion to dismiss the lawsuit. The groups argue that it was within the right of city officials to institute a ban on coal after Phil Tagami misled the people about the purpose of the Oakland Bulk and Oversized Terminal.
Developer Phil Tagami files lawsuit against the City of Oakland
Phil Tagami, Oakland real estate developer, filed a lawsuit in federal court arguing that the approved coal ban is breaking the contract between the city and his company the Oakland Bulk Oversized Terminal (OBOT). The attorneys representing OBOT argue that the ban is in violation of federal laws concerning interstate trade as well as maritime shipping and rail transportation.
Oakland City Council bans coal
The Oakland City Council voted unanimously to ban the handling and storage of coal in the city. Environmental groups say the exposure to coal dust would worsen current issues with air quality and will pose a significant health risk for Oakland citizens. OBOT developers argue that safety measures will be taken to mitigate the risks.
Utah Gov. Signs Bill to Fund Oakland Coal Terminal
Utah Govenor Gary Herbert signed a bill appropriating USD 53 million in state money to fund construction of a coal export facility in Oakland. The bill makes it possible to transfer the USD 53 million from a state agency called the Community Impact Board to the state transportation budget, allowing the money to be invested in the Oakland Bulk and Oversized Terminal.
Terminal Logistics Solutions
Terminal Logistics Solutions (TLS), the newly created terminal operator hoping to ship millions of tons of coal annually through a new export facility in Oakland, may, in fact, be a subsidiary of Bowie Resource Partners LLC, the coal company whose Utah mines the terminal would serve, according to documents provided by Emery County, Utah, in response to a Sierra Club public records act request.
California coal terminal not a legitimate use of Utah millions, groups say
Utah's proposed USD53 million investment in an Oakland, Calif., export terminal is a flagrant abuse of community-impact funds that not only violates federal and state law, but will also subsidize private coal mining corporations and out-of-state developers at the expense of Utah taxpayers and local governments (source: The Salt Lake Tribune).
The project has an estimated cost of USD 275 million. Four Utah counties have secured USD 53 million in financing for the project from state agency the Community Impact Board. The state first had to pass a bill that makes it possible to transfer the money to the state transportation budget. In exchange for the funding the counties will get the right to ship goods through the terminal. Jeffrey Holt, an investment banker for Bank of Montreal, is financial adviser and helped the counties to obtain the USD 53 million loan. Bowie Resource Partners is said to contribute guarantees to secure USD 200 million project debt.
The company responsible for the project is named Oakland Bulk and Oversized Terminal (OBOT). OBOT is in negotiations with Terminal Logistics Solutions (TLS) which would operate the terminal. TLS would receive millions of tons of coal out of Utah, brought in by Bowie Resource Partners.