Posted April 22, 2019
On April 10, 2019, President Mr Donald Trump signed an Executive Order seeking to address permitting and policy obstacles preventing the export of coal and other energy resources through West Coast ports. New port facilities and improvements have been halted or delayed by state, local and tribal governments in California, Washington and Oregon. The Executive Order is the most recent, but certainly not the only, response to efforts to stop interstate shipment and export of coal. The Executive Order requests a report on the economic impacts of blocking exports of domestic coal, oil and gas through the West Coast and focuses specifically on measures to streamline the Section 401 certification process under the Clean Water Act, 33 USC 1341. Senators from several western states are co-sponsoring legislation to address certification under the Clean Water Act.
For its part, Utah, a land-locked state with an active coal mining industry, is supporting public-private partnerships to open new coal ports and transportation infrastructure.
Coal industry concerns regarding Section 401 CWA certification are exemplified by the Millennium Bulk Terminal in Longview, Washington. Governor Jay Inslee has declined to certify the terminal project which is prerequisite to issuance of a 404 permit by the US Army Corp of Engineers. Under the CWA, the state in which the discharge originates must certify that the discharge complies with state water quality standards. The Trump Administration is concerned that the scope of certification has moved beyond water quality to a broader political agenda. In the case of the Millennium Bulk Terminal, denial of certification appears to be due to the Governor’s anti-coal platform. The certification process has allowed Washington to deny (or delay) interstate shipment of coal by rail for transfer to ocean bound ships. State opposition remains despite the Corps’ recent decision to restart work on the federal permitting process.
Actions challenging Governor Inslee’s denial of key permits for the coal terminal have been filed in both state and federal court by project owner, Lighthouse Resources Inc. The National Mining Association and eight land-locked western states, including Utah, have joined the federal action in support of the terminal. These States filed a friend of the court brief to raise Dormant Commerce Clause issues and harm arising from Washington’s improper economic discrimination against interstate shipment of coal for export. Although federal court proceedings were recently stayed by Order dated April 11, 2019, the amicus brief documents harm to the land-locked western states if coal exports are blocked. Wyoming and Montana will suffer significant reductions in state revenues from severance and ad valorem taxes on coal production slated for export and from lease rentals and royalties on state coal lands. Losses resulting from disapproval of the Millennium Bulk Terminal are estimated to “cost Wyoming, Montana, Colorado and Utah ‘over 3,900 jobs annually’ and ‘USD 18 billion in gross domestic product.’”
The Executive Order calls on the Secretary of Energy and the Secretary of Transportation to report on these and other economic impacts resulting from decisions of Washington and other West Coast states to block coal terminal projects. Under Section 7(b) of the Order, a report is due to the President within the next 180 days to assess the extent to which state, local, tribal or territorial actions have contributed to these impacts.