Utah Coal Skirts California, Oregon Ports via Canada

Canadian Prime Minister Justin Trudeau on Emissions Trading
Canadian Prime Minister Justin Trudeau on Emissions Trading

-By Elisabeth Luntz

Utah’s coal barons have had a hard time trying to get their product to an increasingly shrinking domestic market. This occurs at a time when market forces are assisting a global community to move forward on climate goals established during last December’s Conference of Parties (COP21) in Paris.

Much of North American coal reserves are landlocked and unable to reach an Asian market where the U.S. currently holds only a 2 percent market share. Barring regulatory opposition, American coal companies in Wyoming’s Powder River Basin, and especially those in Utah, see extensive market growth potential among the Pacific Rim nations.

A New Development

Despite lawmakers’ recent efforts in both California and Oregon, Canada has just agreed to ship coal for Lighthouse Resources of Salt Lake City—formerly known as Ambre Energy North America, beginning just this month. Thermal coal from Wyoming’s Powder River Basin is now moving to Asia through Westshore Terminals in Vancouver, B.C.

Everett King, President and CEO of Lighthouse announced his plan to give South Korea the fuel which is considered too dirty by environmental advocates, claiming that “clean coal” is an inaccurate and misleading term. In response, Everett claims, “South Korea has one of the cleanest, most efficient coal-fired electrical generation fleets on the planet.”

With the new capability to ship through Westshore in Canada, Lighthouse will drop their appeals to the Department of State Lands for market access through the Morrow Pacific Project in Portland, Oregon. After five years of planning and development, Lighthouse announced it is backing out of a $242 million project that would have shipped only 8 million tons of coal per year to Asia via a new port. Lighthouse’s Oregon plan became more complex when First Nations people testified that the project would interfere with treaty fishing rights. In addition to the Westshore terminal in Canada, Lighthouse has recently secured full ownership of Millennium Bulk Terminals-Longview, situated on the Columbia River in Longview Washington. That bulk loading terminal has a 44 million metric ton/year capacity, a development providing a long-sought distribution channel for Utah coal producers and others in the American west.

Analysts and an abundance of nations agree that combating climate change requires global cooperation and that arbitrarily enforced regulation is counterproductive. Environmentalists and economists say that one of the best solutions to climate change challenges is found in putting a price on carbon dioxide (CO2) and other greenhouse gas (GHG) emissions. As of 2014, every continent except Antarctica now has existing or planned mandatory pricing systems for monetizing carbon known as carbon credits.

Emissions Trading

Carbon credits and carbon markets are a component of national and international attempts to limit GHG’s through emissions trading (ET). One carbon credit is equal to one ton of carbon dioxide or in some markets, carbon dioxide equivalent gasses. GHG emissions are then limited and carbon markets are used to allocate the emissions among a group of regulated emitters.

British Columbia was a leader in the practice of carbon trade. In 2008 they instituted a stand-alone carbon ET program that covered about three-quarters of all emitters within the province. Just this month, Canada adopted a nationwide revenue-neutral carbon levy, attempting to reduce their greenhouse gas emissions by 30 percent from 2005 levels before 2030. Bloomberg analysts describe this as significant because they believe it proves that carbon taxing can be revenue neutral, even in an energy export region. Despite Canada’s relatively progressive public stance on carbon-based fuel use, Utah coal exports via Westshore Terminals incentivizes an aggressive expansion of coal-fired power plants in Japan and South Korea, as well as potential demand in nearby underdeveloped nations.

Elisabeth Luntz has previously written for the Provo Herald and the Highland Observers in Utah County where she resides.

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