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Seattle, Portland try to bar coal exports

October 2, 2012

A month ago, Andrew Erickson and Gabe Collins issued a report on China’s search for new coal resources, as current client Indonesia seeks to restrict exports while Chinese demand continues to grow.  Collins and Erickson identified the rich coal fields of the Powder River Basin as ideal sources to meet Chinese demand.  It seems like an ideal match – demand for coal in the US is slacking, producing a glut in domestic capacity at the same time that demand in China keeps growing.  The problem is that this Montana and Wyoming sourced coal has always been shipped east by rail.  In order to access the Asian market, the coal producers require access to West coast ports from which to ship their goods.

Unfortunately for the PRB coal producers and workers, a coalition of environmental and anti-coal groups have convinced a number of municipalities to fight coal exports through  their region.   The Seattle City Council passed a resolution opposing coal exports though the city last spring; more recently, the Portland City Council passed a similar resolution last month.  The councils, however, can only express the sense of the city.  They have no power to ban the passage of coal on the railroads nor through their ports – that is a federal power.  This is yet another question which will have to await the outcome of next month’s election to be resolved.  President Obama has been hostile to the domestic coal industry since before he was elected;   would he be equally hostile to the large scale export of American coal , even at the cost of more jobs?

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