Jim Pattison warns B.C. to stand down on threat of thermal coal levy

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B.C. billionaire Jim Pattison, the largest shareholder in a coal-exporting site in British Columbia, has a message for Victoria – keep your hands off thermal coal shipped from Westshore Terminals Investment Corp.

The BC Liberal government, which wants to impose a hefty carbon levy on thermal coal exports from B.C. ports, might be toppled as early as Thursday by an alliance of the BC NDP and Greens. The Greens support such a carbon tax, though BC NDP Leader John Horgan hasn't made it a top political priority.

Industry observers say Mr. Horgan, should he become B.C. premier, is unlikely to act as swiftly on thermal coal as Premier Christy Clark pledged to do during the campaign for the May 9 provincial election. But Westshore still faces the political threat of a clampdown on thermal coal, which is used by power plants to generate electricity.

Mr. Pattison said that with the weak long-term outlook for consumption of thermal coal in North America, Westshore should be allowed to continue exporting to electricity producers in countries such as South Korea, Chile and Japan.

"Over time, thermal coal, in my opinion, will be replaced either by natural gas or renewable energy. But there's lots of thermal coal in the world, and it is certainly legal to export. If we don't ship it, somebody else will ship it," he said in an interview, referring to coal suppliers such as Indonesia, Australia and Russia. "All you do is take jobs away from B.C. and Alberta, and American jobs, too."

Westshore exports U.S. thermal coal that arrives by train at the shipping terminal south of Vancouver. Federally owned Ridley Terminals Inc., located in the Port of Prince Rupert in northwestern British Columbia, handles Alberta thermal coal. Both facilities also export Canadian metallurgical coal, a major steel-making ingredient.

Mr. Pattison, who owns a 30-per-cent stake in publicly traded Westshore, said the amount of thermal coal shipped from Canada is tiny compared with global supply.

"Thermal coal is certainly an important issue with the environment. We're not producers of the coal, we're in the business of shipping the coal. We have long-term contracts, and we follow the laws," he said.

The 88-year-old billionaire said Westshore directors and executives oversee a valuable service that is a boost to the Canadian economy.

Westshore's board includes former BC NDP premier Glen Clark, who is Jim Pattison Group president, and former Canadian Pacific Railway president William Stinson. Westshore's management team is headed by Glenn Dudar, vice-president and general manager.

"I have a high regard for Glen Clark. He is a good man," Mr. Pattison said. "And the guy who really knows his onions is Glenn Dudar."

During Westshore's annual meeting last week in Vancouver, Mr. Stinson criticized Ms. Clark for lobbying Prime Minister Justin Trudeau to have Ottawa intervene.

"On April 26, during the final days of campaigning for provincial re-election, B.C. Premier Christy Clark wrote a letter to Prime Minister Trudeau asking for a ban on U.S. thermal coal as a counter to recently reintroduced U.S. countervail duties against B.C. lumber companies," Mr. Stinson told shareholders. "She also stated that if the federal government didn't do something, she would. This was a direct attack against Westshore and its U.S. customers. She then broadened the proposed ban to all thermal coal, which puts thermal coal mines in Alberta and the Alberta government into the fray."

Environmentalists say Westshore is trying to minimize its position in coal markets when it remains part of the problem. "Westshore is clearly trying to duck responsibility for its role in promoting a dirty, hazardous business," said Clark Williams-Derry, director of energy finance at the Sightline Institute, a Seattle-based environmental think tank.

On May 2, Ms. Clark said that if Ottawa doesn't take action, her BC Liberals would implement a carbon levy of $70 a tonne on thermal coal exports from British Columbia.

Mr. Stinson doubted that any B.C. government could legally slap a carbon tax on thermal coal at federally regulated ports in the province. "But this has caused some uncertainty in the investment community and for us, our employees, our U.S. customers and their customers," he said.

The BC Liberals won 43 seats in the May 9 provincial election, compared with the BC NDP's 41 seats and the Greens with victories in three ridings.