Port developer attacks Oakland coal ban and city’s claims that Utah shipments would endanger public health

Financed by Utah’s largest coal producer, Bowie Resource Partners, federal lawsuit aims to overturn ban and restart plans to build a new San Francisco Bay export terminal.

(Photo courtesy of No Coal in Oakland) This 2013 photo shows the site of a proposed export terminal in Oakland, known as West Gateway, located next to the Bay Bridge toll plaza. Utah’s largest coal producer Bowie Resource Partners has subleased the 34-acre city-owned parcel to build and operate a rail-to-ship bulk-freight loading marine terminal for shipping Utah coal to Asian markets. Bowie is also funding a lawsuit against Oakland’s ban on coal handling, now being tried in California’s federal court. Citing impacts to public health, the city enacted the ban in 2016, prompting the lawsuit from developer Phil Tagami, who alleges the city breached its contract with him.

The city of Oakland’s health study that led it to ban coal shipments through a proposed port terminal on the San Francisco Bay has come under severe attack in a California courtroom.

Expert testimony this week in a lawsuit brought by port developers who are seeking to ship million of tons of Utah coal through a proposed deep-water terminal in Oakland painted the city’s health analysis as lacking scientific rigor and mired in errors.

To help justify excluding coal, for example, the Bay Area city relied heavily on dust-emission studies that examined rail transport of sub-bituminous coal from the Powder River Basin in Wyoming and Montana — not the chunky, bituminous kind of coal that is extracted from Utah’s mines.

The Wyoming coal “is drier and more powdery and therefore has higher emission rates,” testified Lyle Chinkin, an air-quality expert hired by developer Phil Tagami to tear apart the coal analysis commissioned by Oakland officials.

Nor did the city’s study consider all the steps and technologies that rail carriers and the proposed terminal site would use to lessen “fugitive” dust emissions, according to testimony from developers pushing to build the proposed Oakland Bulk and Oversized Terminal (OBOT).

Testimony in the federal case is expected to conclude on Friday.

The suit filed by Phil Tagami, one of Northern California’s most prominent and politically connected developers, alleges the city of Oakland illegally blocked his $250 million terminal project, to which four Utah counties had pledged money in hopes of providing a new route for Asian exports and revitalizing their flagging coal industry.

U.S. District Judge Vince Chhabria has narrowed the issues at trial to whether the coal ban violated a development agreement that authorized Tagami to build a state-of-the-art bulk loading terminal on a 34-acre site called West Gateway, sandwiched between the Bay Bridge toll plaza and the Port of Oakland.

Tagami had outsourced construction of the loading terminal to a wholly-owned subsidiary of coal producer Bowie Resource Partners, which holds a 66-year lease to operate the terminal capable of moving 10 million tons of raw materials a year. Bowie also runs Utah’s three most productive coal mines, including Skyline and Dugout, which are in the process of expanding into new federal coal leases.

Oakland officials had already spent $1.4 million before the case went to trial, while Tagami had doled out even more on lawyers, some from one of the world’s most high-priced legal firms. As of last month, Bowie had reimbursed $1.7 million of Tagami’s legal bills, according to court filings.

Chhabria has said he will conclude testimony in his San Francisco courtroom on Friday, but won’t render a decision until lawyers submit additional briefs.

When it presents its defense Friday, the city of Oakland is expected to attack the developers’ efforts to conceal, then downplay coal’s central role in the project and provide evidence of coal dust’s potential to explode and harm those who inhale it.

Among the legal questions Chhabria must decide is whether the city relied on “substantial evidence” that the handling and storage of coal would endanger workers and Oakland residents. The proposed terminal has generated fierce opposition among local residents who say West Oakland is already overburdened with industrial pollution and don’t want Oakland to enable global trade in coal.

The heated dispute over coal likely seems odd for residents of central Utah’s Emery, Sevier and Carbon counties, where open-air coal processing equipment and mountains of pulverized coal and coal ash dot the landscape, a barely noticed part of life in the state’s coal country. Google Earth shows the piles at various rail load-outs, mines and power plants, but, according to OBOT’s environmental health expert, they may not be much to worry about.

“Coal is not very toxic and the materials [i.e. heavy metals] in coal are not really bio-available,” testified Andrew Maier, a professor at the University of Cincinnati. He was among four experts OBOT’s lawyers put on the stand Wednesday discrediting the city’s findings, which were based mostly on a review of scientific literature by a city consultant, Environmental Science Associates.

Oakland’s review concluded that a coal-export terminal would lead to “significant and unavoidable” impacts on public health and safety.

While the terminal project is envisioned to handle four or five commodities, the city’s coal ban has put the entire proposal in jeopardy because Utah coal was to anchor the operation, according to Tagami’s associate Mark McClure, a vice president with the California Capital and Investment Group.

The trains would travel no faster than 10 mph through Oakland and the coal would be stored on site for just three to six days before being loaded onto ships via enclosed conveyances, McClure said.

The coal comes in chunks one-half to two inches in diameter, as opposed to the grainy sub-bituminous variety from Powder River Basin. The ta ype of coal has a minimal potential to explode or heat up until it catches fire, according to dust-combustion expert Ali Rangwala of Worchester Polytechnic Institute.

The coal would be hauled in covered cars behind the cleanest locomotives available, McClure said. The 104-car unit trains, hauling more than 10,000 tons of Utah coal, would be “cut” into four sections for unloading. And to avoid the stopping and starting that can release dust, each 26-car section would travel at a constant slow speed over concrete dump pits. It would take three minutes for each car to discharge its 100-ton load through the bottom doors.

Unloading an entire unit trail would take 5.2 hours, far less than the time estimated by the city’s consultant, testified expert witness David Buccolo, a hazardous materials consultant.

Testimony resumes Friday morning.