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Sacramento, Calif. • California Gov. Jerry Brown signed legislation Friday banning state transportation funding for new coal export terminals.
The bill represents a victory for environmentalists as they campaign aggressively to block shipments of coal mined in Utah and other Western states to energy-hungry markets in Asia. It also drives another nail into the coffin of Utah's hopes of shipping its coal oversees.
The legislation was introduced in response to a developer's failed proposal to build a coal terminal in Oakland. Four Utah counties hoped to invest public dollars in the hope of preserving coal-mining jobs in the state's economically-stressed rural heartland.
Oakland leaders had no clue the export terminal under development at the former Oakland Army Base would handle coal until word got out last year of the Utah counties' financial participation.
Environmentalists say exporting coal would discourage China and other Asian countries from investing in cleaner technology, exacerbating global warming.
"Coal is an antiquated industry and we need to accept that as a reality and not think otherwise," said Dan Kalb, an Oakland City Council member who opposed the coal terminal. The council unanimously passed an ordinance recently banning the handling of coal within the city, citing public health impacts of coal dust that could be dispersed during shipment, off-loading and storage.
The four Utah counties recently withdrew their application from the Utah Permanent Community Impact Fund for a $53 million loan, which they intended to sink into the export terminal in exchange for half its 10 million-ton transloading capacity. However, they still plan to seek a pathway through the West Coast for moving Utah products oversees.
Brown has been vocal in calling for aggressive action to combat climate change but had avoided weighing in on the proposed Oakland coal facility. Brown, a Democrat and a former mayor of Oakland, is friends with the developer, Phil Tagami.
Larry Kamer, a spokesman for Tagami, declined to comment on the governor's action.
In a letter to lawmakers, Brown said the state and local governments should seek to reduce and ultimately eliminate coal shipments through all California ports.
"I believe action on multiple fronts will be necessary to transition away from coal," he wrote.
Coal from Utah is currently shipped through ports in Richmond, Stockton and Long Beach.
SB1279, which applies to projects proposed after Jan. 1, 2017, will prohibit state transportation funds — a key source of money for port construction — from being used to expand those facilities or build new ones involving coal shipments.
Critics of the legislation say it may violate federal law and treaties, and they object to coal being treated differently from other commodities.
The debate over coal has grown increasingly contentious across the West Coast, setting up tense battles between environmentalists and communities seeking jobs in coal-producing western states.
With declining demand for coal in the United States, companies in Montana, Wyoming, Utah and elsewhere want to ship instead to Asia.
"Today, people can breathe easier knowing that beginning in January no coal-related projects will receive state funding," said state Sen. Loni Hancock, D-Oakland, who introduced the anti-coal legislation.
—Tribune reporter Brian Maffly contributed to this article