GATEWAY PACIFIC TERMINAL CONSIDERATIONS
Updated Oct. 27, 2011
Information for Building Industry Association of Whatcom County members

By Linda Twitchell
BIAWC Public Affairs Director

We’re hearing a lot of people say they’re waiting "to hear the facts” before they decide whether to support  Gateway Pacific Terminal,  a multi-use deep-water port planned at Cherry Point by SSA Marine.  BIAWC has not taken a stand for or against this project. But as a service to members, what follows are the facts, as we understand them.

Major public concerns seem to center on two questions:

1. Burlington Northern (BNSF) confirms that approximately three trains go through Bellingham daily carrying open loads of coal from Wyoming’s Powder River Basin. Gateway Pacific is planned as a multi-purpose terminal, but initially will export Powder River Basin coal to Asia. When the terminal is operating at maximum capacity, as many as 9 additional trains per day (18 round trips) would serve the terminal. The question is:  If Gateway Pacific is not built, will those additional trains come through Whatcom County anyway, carrying coal to B.C. ports for export to China? 

The answer is yes, according to Beth Sutton, vice president of global communications for Peabody Energy, which has contracted with Gateway to provide as much as 24 million metric tons of Power River Basin coal  per year (enough to fill 4 to 5 trains daily) for export to Asia. Paths into British Columbia are already open, she noted:  Peabody now exports coal in smaller amounts to Asia through B.C. ports, all of which are planning expansions and all of which want to export coal.  "Economies in Asia are hungry for energy,” she said, and markets will follow that demand.  Railroads, because they are considered interstate commerce, are essentially free to follow market demand. "Will the coal continue to roll through Bellingham, and will it increase regardless of whether Gateway is built? The answer is yes,” Sutton said.  The real question, she said, is who will get the jobs and advantages of the export business. 

The answer is yes, according to Suann Lundsberg, spokesperson for Burlington Northern (BNSF),
in Fort Worth, Texas.  "Absolutely,” she said. "Whether or not this facility is built, there will be more coal going to British Columbia and we’re going to be hauling it.” 

The answer is yes, according to Mark Asmundson, former Bellingham mayor and executive director of the Northwest Clean Air Agency, which ensures compliance with federal, state and local air-quality regulations in Island, Skagit and Whatcom counties. "It appears that will be the case,” Asmundson said. He was involved in a tour of the Roberts Bank coal export facility in Tsawwassen, B.C., with a group that was told by officials there that if Gateway isn’t built, additional coal trains will continue through Whatcom County anyway, going to Roberts Bank.

Coal from the Powder River Basin in Wyoming now reaches Asia via B.C. ports following two routes: 
• What we will call here the "southern” route, through Whatcom County:  Coal is shipped on BNSF lines from Wyoming into Montana, across Idaho, and across Washington, coming north through Bellingham and over the border at Blaine. Most of this coal goes to Westshore Terminals’ facility at Roberts Bank, a manmade peninsula in marine waters near Tsawwassen, B.C. , about 17 miles north of the international border. A small amount of the coal continues more than 600 miles north on Canadian rail lines to Ridley Terminals at Prince Rupert.
• A "northern” route going west across Canada:  Powder River Basin coal can be sent from Wyoming to B.C. using a secondary BNSF  line that crosses from Sweet Grass, Montana, into Coutts, Alberta . There, the train can be handed off to Canadian Pacific, then Canadian National lines, going west.  The general manager at Roberts Bank calls this a "tortuous route” his terminal is unlikely to use; winter weather is a serious concern.  The Ridley Terminals Inc. controller in Prince Rupert, much farther north, says this would be his facility’s most direct route.

To see a picture of the routes, Google "BNSF rail lines map” or see the map of BNSF rail lines on Wikipedia.

Doug Mills is senior account representative, bulk and break bulk sectors, for Port Metro Vancouver, which runs the Roberts Bank facility, Neptune Terminals in North Vancouver, and a bulk products facility at Port Moody that is temporarily being used to export coal.  "We are continually looking for more coal,” he said, although the port’s primary product is the metallurgical coal mined in Canada (used to produce steel), which is harder and more expensive than the "thermal” coal from the Powder River Basin (used to produce electricity).

"What you have to understand,” he said, "is that a huge portion of the Canadian economy is based on trade.”  British Columbia’s premier recently announced billions of dollars for export infrastructure improvements, and all ports in B.C. are planning or in the middle of major expansions. "Significant dollars” also are being invested in the railroads, Mills said.

If Gateway isn’t built, would the coal Gateway hopes to export go through Bellingham, anyway, to be exported from B.C.?  "There’s not an obvious answer,” Mills said. "My feeling is, there would be a tendency to move the metallurgical coal from Canada first, because it’s more valuable. But there is great, pent-up demand to move coal to Asia – it’s alarming, almost. It will find a way to the market, as long as it is financially viable to do that. I’ve seen it move to China from Baltimore.”

Denis Horgan, vice president and general manager of Westshore Terminals, which has the self-described "busiest single export coal terminal in North America” at Roberts Bank, said two trains now deliver coal to the Tsawwassen facility daily on BNSF lines that run through Whatcom County. Roberts Bank is in the midst of a major expansion; it now handles 21 million metric tons of coal per year, and will handle 29 million to 33 million tons by the end of 2012. Most of the coal the facility handles is Canadian, Horgan said, the majority of which goes to Korea, with "some” bound for China and South America.  What about the argument that if more U.S. coal heads to Roberts Bank, it won’t go through Whatcom County but would be shipped instead to Alberta, then west through B.C. – avoiding Washington state entirely?  Theoretically, Powder River Basin coal could be sent to Roberts Bank using that route, Horgan said, but "that route is tortuous.” 

One of the three trains a day that now sends coal through Bellingham is bound for Prince Rupert. That route is not likely to see increased traffic, according to Cordell Dixon, controller of Ridley Terminals Inc.  Dixon said the northern route – the rail line that goes from Wyoming into Alberta, then west – remains the "primary and most efficient” way for U.S. coal to reach Prince Rupert; "the Blaine terminal is secondary.” 

2. Do coal trains pose a health or environmental hazard?

According to Asmundson, of the Northwest Clean Air Agency, the answer is no.  Emissions from the additional trains bound for Cherry Point would be so slight, he said, they "probably will not even be detectable by our monitoring network,” which he considers good quality and a realistic depiction of any emission threats that might occur in this area. Asmundson points to several studies on trains’ fuel efficiency and low emission rates, and notes that new fuel standards going into effect in 2013 will make diesel train emissions even less of a problem in the future.

"Most people would get more diesel pollution from following a pickup truck in their car than from being near these trains,” he said. In addition, Asmundson said, the "meteorology” of Whatcom County disperses emissions to the point that Bellingham residents living near the tracks would not face health risks.

Asmundson and Terry Finn, director of government affairs for BNSF Railway, both report that coal dust does not present a health problem in Whatcom County. Railroads closely track coal dust because it damages tracks and infrastructure; most of it is blown off within 25 miles of the load’s origin, Finn confirmed.  More important, he said, new rules that went into effect on Oct. 1 require shippers to ensure that loads have rounded edges and are sprayed with a plasticized treatment to cut escaping dust by 80 percent.  BNSF, Finn said, will demand compliance.  Asmundson notes that his agency is not aware of any complaints filed in Whatcom County regarding coal dust from trains, although a decade ago residents of Point Roberts did file complaints about coal dust from the Roberts Bank terminal.

Opponents of the Gateway project disagree with assertions that diesel emissions and coal dust won’t be a problem (see below).

THE PROJECT

Gateway Pacific Terminal is being touted as a world-class deep-water port, in terms of both its capabilities and adherence to environmental best practices.  Plans are posted online by the project’s owner, SSA Marine. Consultant Craig Cole warns that the terminal will be built to serve contracts in hand, it’s essentially a work in progress. The terminal’s original completion date was 2015, but the company now expects to be operational in 4-5 years. EIS permitting is expected to take two years, and construction would take at least another two, Cole said.

A full-service dry bulk commodity export-import facility is planned on 1,092 acres at Cherry Point.  Dry bulk commodities such as coal, grain, and potash will be exported from the terminal to Asian markets. The shipping, stevedoring, and warehousing facility is designed to be the largest on the West Coast of the United States, offering covered offloading facilities and other controls that sponsors say will make it a worldwide leader, environmentally.  When operating at full capacity, the terminal expects to export at least 24 million metric tons of Powder River Basin coal per year from Peabody Energy. Cole said other coal contracts may be negotiated.  At most 9 trains per day will service the terminal once it is operating at full capacity, he confirmed.  Gateway’s maximum capacity per year would be 54 metric tons of product. SSA Marine says it is tailoring environmental safeguards for marine habitat, and no dredging will be required. 

ECONOMICS

Why is this terminal of interest to the average citizen?  Jobs.  Whatcom County has lost 600 jobs from Intalco and 800-1,000 jobs from GP in recent years, according to Northwest Washington Central Labor Council spokesman David Warren. The Gateway project has the potential to be a major employer and take up that slack. Warren reported at an Oct. 15 community forum that Gateway, if built at half capacity, would provide 1,700 jobs during the construction phase. If built at full capacity it would provide 2,100 jobs during that time. Craig Cole, a consultant representing Gateway, confirms an update of the figures, released Oct. 27, shows that at full capacity the completed project will employ 430 people in fulltime jobs paying $95,000 or more per year (longshoremen, onsite rail operators, tub operators, pilots and the like), plus "indirect or induced” jobs (from businesses doing business with Gateway, or employees spending their wages in the community). Averaging two separate economic analyses, Gateway reports 4,429 temporary jobs (direct and secondary) are expected during the two-year construction phase, and 1,251 permanent jobs (direct and secondary) are expected when Gateway is operating at full capacity.

Permanent jobs will include longshoremen, but the argument that these will be people moving here from Seattle is not accurate, according to Warren. We have only 29 longshoremen on the books in Whatcom County right now, he said, but another 200 or more longshoremen live in Whatcom County and commute to Everett or Seattle for lack of work here. These are local people who would work at Gateway when it opens.  This, too, touches on environmental concerns:  Avoiding long commutes is a point supported by sustainability proponents , who note the advantages of  working where you live or "buying local” to reduce the use of fossil fuels.

SSA Marine reports that during the two years of construction, Gateway will pay $75 million to $92 million per year in tax revenue for state and local services. Once it’s in full operation, the webpage says, Gateway will provide $8 million to $11 million per year in additional local taxes.  A realistic comparison for this would be the impact of taxes paid by Intalco Aluminum or Whatcom County’s two oil refineries. According to SSA Marine, based on the current unemployment rate, the project would reduce the area’s unemployment by as much as 30% during construction and ongoing unemployment by as much as 12%.

ENVIRONMENTAL IMPACT
COAL SHIPMENT:

"Environmentally,” Asmundson said, "the situation is far superior at Cherry Point than at Roberts Bank .”

When BIAWC interviewed local political candidates several weeks ago, our committee was told by Bellingham Mayor Dan Pike that the additional trains expected to take coal to the Gateway Pacific Terminal would create a higher overall pollution level in Whatcom County that would cause the Intalco Aluminum smelter to close.  Pike said he opposes Gateway because he wants to save existing jobs at Intalco.  He cited Asmundson as the source of this information.

Asked about that, Asmundson said just the opposite is true.  The trains are not expected to create a health or environmental hazard, he said, noting that studies show very low emission rates from diesel trains looking at loads per ton, per mile.  Emission levels from additional coal-bearing trains are not even expected to register on local monitoring equipment, he said, as noted above.  If emission levels did for some reason increase, he said, his agency would address how to resolve that situation – Intalco would not be forced to close or its workforce be put at risk.

Other environmental advantages are tied to the Gateway project, according to Asmundson.

If trains deliver their loads in the U.S., reasonable health rules can be imposed, Asmundson said. But trains that deliver their loads into Canada are not subject to such rules.  "We have no control if they’re going into Canada, that’s the paradox,” he said.

The Gateway site itself is "far superior” to the port at Roberts Bank in environmental terms, Asmundson said. Roberts Bank involves open delivery; coal there is dumped in uncovered piles on a manmade peninsula extending into marine waters about 17 miles from the Whatcom County border.  As noted above, the only complaints his agency has any record of regarding coal dust have involved dust from the Roberts Bank facility, not trains themselves.  Gateway’s site at Cherry Point would involve covered upland delivery and meet stringent environmental controls.  The Cherry Point site, Asmundson also noted, would be subject to the U.S. clean air and water acts; Canada has no such federal rules, applications for projects of this sort in Canada are considered on a case-to-case basis.

For more on the Roberts Bank terminal, "Canada’s premier mover of coal,” click here. Arguments against the planned expansion there (predictions of a three-fold increase in air pollution; negative impact on agriculture, fishing and tourism industries; warnings that a major accident could destroy the Fraser River estuary ecosystem forever) are posted online here.

FISH/WILDLIFE:

Herring spawns at Cherry Point have been in decline since a growing Japanese roe market prompted the first quantitative study in 1973. Spawning has dropped from 15,000 tons that year to a recorded low of 774 tons in 2010, according to Kurt Stick of the state Department of Fish and Wildlife. The cause of that decline remains unknown. In almost 40 years, no tie has been proven between Cherry Point’s piers or marine traffic and herring spawn declines in the eelbeds nearby.

Herring are migratory. They stay in their native waters for a year or so, then leave, returning to repeatedly spawn between, generally, the ages of 2 and 8. Scientists can’t say exactly where herring go when they leave Cherry Point, which raises the issue that they could be affected by something happening elsewhere.  Research does show that the older fish are not returning in as great a number as they once did.

Ironically the Cherry Point shoreline is in good condition. It’s in better condition than it might be if it was residential, one official pointed out.  A Department of Natural Resources study notes, "Most ecosystem processes appear to be intact in the vicinity of Cherry Point. Declines in Pacific herring may signal that ecosystem processes are degraded or damaged, but several authors have attributed declines in this stock of herring to broad oceanographic conditions ...”

The same study notes that ballast water is the "most important” source of biological risk at Cherry Point, that the animals at risk are great blue herons and juvenile Dungeness crabs, and that those risk factors "can be mitigated if not eliminated through best management practices.”  Spokesmen for the state Department of Fish and Wildlife said there is no evidence of a decline of Dungeness crab at Cherry Point, and they have not heard of any decline in great blue heron colonies in Whatcom County, although the department does not have shoreline studies of heron at Cherry Point.

OTHER POSSIBLE CONSEQUENCES

Perry Eskridge, a local land-use attorney and governmental affairs coordinator for Whatcom County Association of Realtors who worked for BNSF at one point, has suggested that if Bellingham approaches Burlington Northern as a willing partner, one advantage the city might coax from the railroad is agreement to shift its tracks that go through the old, downtown GP site closer to the bluff there, creating a waterfront development area near Cornwall Avenue that is not intersected by train tracks.  Without this, he predicts, waterfront development there is at risk because of Fire Department access route concerns. 

ARGUMENTS AGAINST THE GATEWAY PROJECT

Opponents maintain that if the Gateway project is not built, additional trains carrying coal to B.C. ports for export to China will not come through Whatcom County.  Bob Ferris, executive director of ReSources, spoke to this point at an Oct. 14 presentation at WWU. Ferris said it’s his belief that the shipments will reach B.C. ports using train lines that cross Canada – carrying coal north from Wyoming’s Powder River Basin into Montana, transferring there to Canada Rail lines, then going west on Canadian trains, circumventing Washington state entirely.  He said he sees this as the logical route.  Those who disagree with Ferris say Peabody Energy, owner of the mines involved, will continue using the current route running through Bellingham and Whatcom County, suggesting it will be cheaper and easier for the companies involved. BNSF’s Finn notes the northern route is in use, but does not have the capacity to carry the coal Peabody wants to ship to Cherry Point.

Those who oppose use of fossil fuels in general argue, on principle, that we should not support sending coal from the U.S. to China, and that enabling the Gateway project therefore is a mistake – even if that coal reaches China from Canadian ports, instead. 

Many opponents disagree with Asmundson and others’ assessment that additional coal trains bound for Cherry Point will not pose serious health/environmental risks. No one is questioning that diesel trains are much cleaner and more efficient than our other common carrier – diesel trucks. The argument against the trains is that another train is another train, and more of them will produce more emissions, even if it occurs in amounts that don’t register on air pollution control equipment. 

If Asmundson is correct that additional coal trains will travel through Whatcom County whether Gateway Pacific is built or not, his point that we have greater control over potential problems if those trains deliver their coal to a U.S. port, rather than a Canadian destination, becomes an important environmental consideration – favoring the Cherry Point terminal over delivery of the same coal into British Columbia. 

For more information on diesel emissions, here are some websites.

Suggested by Ahmer Nizam, manager of utilities/railroad/agreements for the state Department of Transportation:
• http://www.wsdot.wa.gov/Freight/publications/Environmental.htm
• http://www.fhwa.dot.gov/environment/air_quality/publications/effects_of_freight_movement/chapter02.cfm

Suggested by Perry Eskridge of the Whatcom County Association of Realtors: 
• http://www.fra.dot.gov/Downloads/Comparative_Evaluation_Rail_Truck_Fuel_Efficiency.pdf

A group called "Whatcom Docs” released a letter earlier this year saying the Gateway project will create adverse health effects. View the letter here.
The  Northwest Washington Central Labor Council AFL-CIO responded, arguing that the "Docs” letter is based on faulty science. View that letter here.

SUMMARY

Increased delivery of U.S. coal to Asia is an economic reality.  China, in particular, is trying to bring electricity to its huge population. This demand will drive the market – sending U.S. coal overseas, from Cherry Point or elsewhere. 

Gateway Pacific Terminal proposes exporting coal from Wyoming’s Powder River Basin to China, and shipping other dry bulk commodities to various ports in Asia.  When operating at capacity, Gateway would be served by as many as 9 additional trains per day (18 round trips), which would go through Bellingham. These are expected to have little environmental impact, according to the Northwest Clean Air Agency. Coal dust is a non-issue; not one complaint has ever been filed in Whatcom County about coal dust from trains although three open coal trains go through Bellingham daily, and new rules will provide further protection from coal dust long before Gateway is completed. The diesel emissions from trains serving Gateway Pacific will be so slight, they are not expected to register on air pollution control equipment. Fish and wildlife do not appear to be in danger.

The Gateway facility is planned as a state-of-the-art facility. It must meet stringent U.S. air and water quality rules, and will be the only deep-water port of its kind on the West Coast. The terminal is planned on appropriately zoned land, in the last major location approved for export development in Whatcom County.

The terminal will provide "living-wage” jobs and increase taxes, providing a major boost to the local economy and, as a result, supporting the home building industry.