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Fraser Surrey Docks wants to serve as a new transfer site for U.S. thermal coal exports headed toward China.
Fraser Surrey Docks wants to serve as a new transfer site for U.S. thermal coal exports headed toward China.

energy

B.C. coal export plan faces resistance Add to ...

As Canada’s efforts to send oil abroad encounter thorny opposition, critics are increasingly targeting another resource export: Coal.

Plans to export thermal coal from the West Coast to Asia are being put under the microscope as North American miners jockey to ship abundant domestic supplies overseas.

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Demand for thermal coal, a commodity used by power plants to generate electricity, has weakened in recent years in North America due to the boom in U.S. shale gas production. With many U.S. power plants switching to natural gas, a coal glut has forced miners to look to Asia for new markets.

Fraser Surrey Docks LP, a marine terminal located on the Fraser River in the Vancouver suburb of Surrey, wants to serve as a new staging ground for exports of thermal coal originating from Wyoming’s Powder River basin. Fraser Surrey Docks is owned by Macquarie Infrastructure Partners, an investment fund managed by Australia’s Macquarie Group.

The U.S. mining and shipping sectors see an enormous opportunity to sell to energy-thirsty customers in Asia if new export sites are built in Washington state and Oregon. Only one per cent of coal output in Wyoming, the largest coal-producing state, went to exports in 2011.

The hot topic of Alberta’s oil sands and pipeline plans such as Northern Gateway and Keystone XL have overshadowed battles over proposed exports of coal. Coal export proposals in the United States have either been suspended by proponents or run into fierce opposition from environmentalists in the U.S. Pacific Northwest.

Delays south of the border have created an opening for Fraser Surrey Docks to handle up to eight million tonnes a year of American thermal coal through its B.C. terminal. Coal arriving on railcars would be loaded onto barges and then towed to Asia-bound vessels at a Texada Island port facility, roughly 100 kilometres northwest of Vancouver.

The issue of thermal coal exports has mobilized a diverse group of opponents whose concerns range from global warming due to increased use of the commodity in Asia to local health worries about air and water quality from coal dust and potential spills.

Those opposing include environmental groups, the B.C. Nurses Union, First Nations leaders, Vancouver City Savings Credit Union, community organizations and most of the directors at Metro Vancouver, the region’s political body. Vancouver Mayor Gregor Robertson, who led a civic trade mission to Asia last November, opposes the Fraser Surrey Docks’ expansion into thermal coal.

The chief medical officers of Vancouver Coastal Health and Fraser Health have urged that more study needs to be conducted on the potential impacts of coal dust on the environment.

Supporters include B.C. Energy and Mines Minister Bill Bennett, who backs thermal coal in principle as long as aspects of a barging proposal under provincial jurisdiction follow the rules, and Coal Alliance, which represents a range of groups from the coal industry to marine terminals to railways.

“It’s up to Port Metro Vancouver as the regulatory body to review all of the information that we have submitted and make a decision. PMV had us do an environmental impact assessment, and we’ve done that,” Fraser Surrey Docks spokeswoman Jill Buchanan said.

Port Metro Vancouver, effectively the federal landlord for marine terminal operators such as Fraser Surrey Docks, Westshore Terminals Investment Corp. and Neptune Bulk Terminals (Canada) Ltd., is reviewing Fraser Surrey Docks’ application, emphasizing that any decision will take an array of comments and criticisms into account.

The other B.C. site that handles coal is the Ridley Terminals Inc. export facility in Prince Rupert in northwestern British Columbia.

Westshore and Ridley handle mostly metallurgical (or coking) coal, a key ingredient exported to Asia for the production of steel, but thermal coal exports are on the rise at those two operations. Neptune processes only metallurgical coal, while Fraser Surrey Docks doesn’t yet accept any coal. Over all, metallurgical coal accounted for almost 70 per cent of total coal exports at Port Metro Vancouver sites in 2012, while thermal coal was at 30 per cent.

Kevin Washbrook, director of Voters Taking Action on Climate Change, said his group fears that Port Metro Vancouver will approve Fraser Surrey Docks’ application to offer thermal coal services. “Thermal coal is bad for the climate,” Mr. Washbrook said. He said he is concerned about miners such as Cloud Peak Energy Inc. potentially boosting exports of U.S. thermal coal at Westshore.

Follow on Twitter: @brentcjang

 

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