B.C.’s biggest coal export facility, Westshore Terminals Ltd., is operating at full capacity and regularly turns away business from U.S. coal producers that want to get their product to export markets. A $275-million upgrade now under way may provide some breathing room.
But it likely won’t be enough to suit American producers keen to find new customers if proposed U.S. regulations reduce domestic demand.
“Westshore is running at capacity right now,” Greg Andrew, director of environmental and engineering services at Westshore Terminals, said Tuesday.
“It’s a function of our ability to receive trains, store coal and move it out to ships. And we are pretty much operating at capacity in both the receiving of coal and loading of ships right now.”
The push for export options through Westshore and other existing and proposed export terminals on the West Coast of Canada and the U.S. could become more pronounced as a result of regulatory changes in the U.S., where President Barack Obama on Monday announced plans to curb emissions from coal plants by 30 per cent from 2005 levels by 2030.
The proposed regulations could result in older, coal-fired electricity plants being closed and leave some U.S. coal producers looking for alternative customers.
Westshore Terminals, operating from a man-made island at Roberts Bank and opened in 1970, has a permitted capacity of 33 million tonnes a year. The terminal expects to move between 31 million and 32 million tonnes of coal this year.
Upgrades will replace aging equipment and increase efficiency, but those changes are expected to add only about 2 or 3 million additional tonnes – less than 10 per cent – of capacity.
Westshore Terminals ships mostly B.C.-mined metallurgical coal but in recent years has shipped increasing volumes of thermal coal – used to produce electricity – to Asian markets. Thermal coal, mined both in the United States and in Alberta, now accounts for about 40 per cent of shipments through Westshore, Mr. Andrew said.
Thermal coal shipments have also been increasing through Prince Rupert’s Ridley Terminal, which shipped 2.8-million tonnes of thermal coal last year, compared with 7.8-million tonnes of metallurgical coal. Over the past decade, Ridley shipped no thermal coal in 2004, 2005 and 2006. Since then, it has shipped more than a million tonnes of thermal coal each year. Most of that thermal coal comes from the Powder River Basin, a coal-producing region in Wyoming and Montana, a Ridley Terminal spokesman said on Tuesday.
The proposed new environmental regulations in the United States have cast a spotlight on coal, which accounts for about 37 per cent of electricity generation in the U.S. Coal is not going away – it is expected to account for more than 30 per cent of U.S. electricity generation by 2030, according to the Environmental Protection Agency – but older, more-polluting plants are targeted by the new regulations.
Metallurgical coal is the backbone of B.C.’s mining sector, accounting for 43 per cent of revenue of $8.5-billion in 2013 compared with 4 per cent of revenue from thermal coal, according to the 2013 PricewaterhouseCoopers Mining Survey.
Port Metro Vancouver is currently weighing a proposal from Fraser Surrey Docks to build a coal export facility to handle up to four million tonnes of coal a year. (Additional capacity of up to eight million tonnes would require an additional review by Port Metro Vancouver.)
Environmental groups are fighting the Fraser Surrey Docks coal terminal proposal, citing health and climate change concerns in relation to the project, which would bring U.S.-mined thermal coal through B.C. on its way to export markets. In Washington State, the $650-million U.S. Gateway Pacific Terminal – which would give U.S. coal producers access to Asian export markets – is undergoing an environmental review that is expected to take more than a year and involves federal, state and local governments.Report Typo/Error