For Millennium Terminal coal exporters, the hits just keep on coming
The Millennium Coal Terminal in Longview Washington is struggling to receive permits from a state that is growing increasingly fed up with fossil fuel export. Thanks to grave concerns from locals, the permitting process for this project was extended to its widest and most comprehensive parameters. While the terminal its self has plenty of obstacles to navigate, the companies hoping to supply it are having critical issues of their own.
Missouri based Arch Coal is the second largest coal producer in the country and owns a 38% share of the terminal. Domestic coal markets are facing their bleakest prospects in decades, with no end in site. Arch Coal’s share price has absolutely plummeted as a result. From a peak of $35.99 in early 2011 Arch now fluctuates just above $1.00. Unfortunately for the coal giant, export prospects don’t look much better. Regulators looking at Arch Coal’s Otter Creek mining proposal near Ashland Montana just rejected their permit application siting “hundreds” of deficiencies. This is the second time in two years that Montana’s Department of Environmental Quality has rejected permits from Arch for this mine. What’s more, a rail line needed to connect the mine to Northwest ports has met years of delays.
The project’s other majority stakeholder has hardly faired better. Late last year, the company had to sell all of its North American coal interests to private equity lender, Resource Capital Funds. Ambre only received $18 million from the sale, despite their claims that their American and Canadian coal assets were worth between $200 and 400 million. Ambre is still the driving force behind the beleaguered Port of Morrow coal project. That project has been rejected twice in permitting and looks no closer to coming to fruition despite the best efforts of Wyoming and Montana’s state governments. Most recently, Ambre has changed their official name to Lighthouse Resources, a move that smells quite distinctly of desperation.
At every end of the coal line, from mine to train to terminal, companies are facing fierce opposition, poor market prospects and investors jumping ship. These companies are in dire straights. We need to stop talking about coal export projects as if they’re an economic boon and start calling them what they are, a desperate industry making a far too risky bet that the Northwest can't afford to buy into.
Nick Abraham - editor and Lead contributor of Oil Check Northwest