Report: Coal exports could add $2B to $6B annually to U.S. economy
By Erik Siemers
A new report from the Energy Policy Research Foundation says coal exports could add between $2 billion and $6 billion each year to the U.S. economy.
Business groups backing Pacific Northwest coal export proposals on Thursday lauded a new report that claims increased U.S. coal exports could bring between $2 billion and $6 billion per year to the U.S. economy.
The report comes from the Energy Policy Research Foundation, a Washington, D.C.-based think tank that focuses on oil-related economic issues.
Around a half-dozen proposals have arisen in Washington and Oregon this year to build export terminals that would shuttle coal from the Powder River Basin of Montana and Wyoming to energy-hungry Asian markets through the Pacific Northwest. Three projects proposed along the Columbia River near Portland represent around $1 billion in private investment.
Proponents laud the economic potential of the projects — Portland barge-makers Gunderson LLC and Vigor Industrial already plan to split $75 million worth of work related to one proposal. But critics are fighting coal exports primarily on two fronts — that they will lead to widespread rail congestion and that any economic gains aren’t worth the damage caused from enabling the increased use of greenhouse gas-emitting power sources.
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The Energy Policy Research Foundation report dismissed the criticism.
It called the rail traffic issues “state and local concerns which can be addressed through a number of remedies.”
On the larger environmental issue, the report claims that lower-cost coal from the Powder River Basin isn’t likely to have an effect on coal prices worldwide and neither the volume of world coal combustion or greenhouse gas emissions would change as a result.
Ross Macfarlane, senior adviser for business partnerships at Seattle-based environmental policy group Climate Solutions, said that economic assertion not only isn’t accurate, “it’s in direct opposition to what’s happening in world markets.”
“U.S. coal is moving prices significantly downwards because it is supplanting, in the short term, higher-priced coal from Australia and Indonesia and causing major dislocations,” Macfarlane said.
The report's claim “goes against the basic laws of supply and demand,” he said.
The report was heralded by the Alliance for Northwest Jobs & Exports, a business-backed, pro-coal nonprofit based in Seattle that made its debut last week.
“This report confirms what we already know in the Northwest – we can continue to build on our strong trade heritage, creating thousands of new jobs and millions in new tax revenue for our region, and do it in an environmentally responsible way,” Alliance spokeswoman Lauri Hennessy said in a news release.
Macfarlane said he doesn’t dispute that coal exports will lead to billions of dollars coming into the U.S. economy.
“The question is who will get that value,” he said. “I think it’s clear that most of that value is going to be going into a very small number of pockets and the costs will be borne throughout the region and the world.”
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