A California judge this week issued a ruling that keeps alive the possibility that Utah coal could be shipped through a yet-to-be-built port facility in Oakland, but port opponents still vow that no coal will ever pass through the city.
Alameda Superior Court Judge Noël Wise issued a final judgment Tuesday, extending a lease on the port land until 2026. The judge had earlier ruled that the city had violated the rights of the leaseholder, Phil Tagami, when it canceled his lease over concerns that coal shipments through the port would endanger Oakland residents.
Tagami has been pursuing a port on the site for more than a decade, and at one point the state of Utah was looking to be an investor in the project through its “Throughput Infrastructure Fund,” an entity created by the Utah Legislature to fund projects with mineral royalty money.
In an unusual arrangement back in 2016, the Utah Legislature agreed to put $53 million in state money into the infrastructure fund with the understanding the state would be paid back by the Permanent Community Impact Fund board, the Utah entity that allocates mineral royalty money.
That money was intended for investing in the Oakland port, but the plan has been embroiled in lawsuits ever since. After the city terminated his lease, Tagami filed suit seeking more than $160 million in what it said was lost profits.
But the judge rejected that claim, and instead offered a choice to Tagami’s company, Oakland Bulk and Oversized Terminal LLC. It could collect $318,000 in damages from the city and give up the lease, or it could have until 2026 to secure a deal to get the port built. The company chose the latter.
“We applaud the court’s refusal to reward the would-be coal terminal developers with the massive payoff they sought by suing the city,” said Ted Franklin from No Coal in Oakland, which has been fighting the coal port.
Christina Davis, spokesperson for the Utah Department of Workforce Services, said the state’s $53 million is still set aside in the Throughput Infrastructure Fund, which is legally allowed to fund an electrical transmission line, short line railroad, deepwater port or pipeline for liquid or gaseous hydrocarbons.
“The board would consider any application that meets those criteria, but there are not currently any applications for funding from the Throughput Infrastructure Fund,” Davis said.
“Building new coal transport infrastructure in Oakland,” said Franklin, “would endanger the health of the Oakland community, particularly residents and workers in historically Black West Oakland.”
With coal demand in the United States plummeting, Utah coal production last year fell to its lowest level since 1976. For years, Utah coal producers have sought to export more coal to Asia, where coal-fired power plants are still being built despite their contribution to climate change.
Hollie Brown, spokesperson for the Utah Division of Oil, Gas and Mining and the Utah Geological Survey, said in an email that state coal exports have varied in the past 20 years, but “a recently expanding foreign export market has provided new opportunities for Utah coal operators.”
Utah coal has been shipped through a separate Bay Area facility in Richmond, north of Oakland, but that city has voted to end coal shipments by 2026.
“With diminished port capacity on the West Coast of the United States, Utah operators have sought out alternate port facilities (e.g., Gulf of Mexico) to send their coal overseas,” Brown wrote.
Utah producers have exported between 1.6 million and 4 million tons of coal annually over the past five years, she said.
It is unclear how long Asian demand for coal will continue as cleaner sources are coming on line faster than predicted. The International Energy Agency predicts that global consumption of coal will peak this year and then decline slowly.
Franklin said his group is willing to work with the developer on a port project that doesn’t take coal, but they are “ready for the fight” if coal exports are still planned.
“Investors, beware,” he said. “There will never be a coal export terminal in Oakland.”
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