Coal rush in Galveston
To fuel global energy demand, rail road wants bridge, tracks to planned Pelican Island terminal
An island in Galveston Bay better known for flounder fishing and the Seawolf submarine park is the latest link in a chain of ports mobilizing to ship American coal out of the country.
The Texas, Mexico & Pacific Railroad LLC, a short- distance rail company headquartered in Galveston, has signed an option agreement with the Galveston Board of Wharves to build a pricey railway bridge and tracks to a new coal terminal on Pelican Island, where asmuch as 15 million tons of coal could be exported yearly.
In choosing a Gulf Coast port, developers likely will avoid the opposition that has confronted efforts inWashington and Oregon where environmentalists and other groups vigorously are fighting proposed coal export operations.
Pelican Island is a fierce contrast in uses, like somuch of the land here. Its 3,515 acres are home to Texas A&M University at Galveston and oceanography students cross to the island every day. Company logos and installations familiar to any Gulf Coast resident— Shell, Halliburton, and Baker Hughes — line one shore. Alarge section of the island is used for pumping in dredge material removed tomaintain depth in the ship channels.
There also are acres and acres of green, bird habitat and prime fishing spots. With no plans yet drawn, it’s too early to say howthe coal facility may affect those.
For the coal to arrive from its source in the RockyMountains, the Texas, Mexico& Pacific must first build a railway bridge, with the cost heavily dependent onwhich of two suggested routes it follows: The rail company and its investors estimate they’ll pay $ 600 million if it runs betweenGalveston and Pelican Island, $ 1.2 billion if it spans the longer distance acrossGalveston Bay from Texas City.
Texas, Mexico & Pacific Managing Director John Helsley said the company has not yet signed a contract with a particular coal mining company, but he’s talking to half a dozen.
“We’re getting calls from mining groups that want to export to China, Japan, Korea, Germany and India,” he said.
Until recently exporting coal from theUnited States was not such big business. The fuelwas needed at home. Now, U. S. coal customers are disappearing; power plants are closing at a pace few would have predicted a fewyears ago.
Shale gas alternative
But inAsia electrical grids are still ramping up to bring first light to hundreds of millions of people, and the newlights are often powered by coal.
“Herewe are trying to get away from it, while other people are trying to get into it,” saysHelsley.
Producers can fetch stronger prices inAsia. There are several factors atwork domestically: Shale gas has become economically competitive with coal in some places, and it burns cleaner, sometimesmuch cleaner, depending onwhich coal bed andwhich gas play are compared.
Federal regulators also acted last December on two decades of entreaties by child health experts to limit mercury emissions from electrical generating plants. Mercury is a fetal poison releasedwhen coal is burned in giant furnaces. Burning coal also releases significant amounts of climate- changing carbon dioxide.
No resident resistance
These issues are not always foremost on the minds of port directors whose concern is local economies. Investment in coal terminals brings fees and attracts dollars for other projects.
“Anewrail connection would cause an explosion in development on Pelican Island,” said Galveston Port DirectorMikeMierzwa. “I have oil storage peoplewhowould take advantage of that. I have more and more cruise ships.”
Galveston has become amajor cruise home port. Afive- day trip floats vacationers to Cozumel, Mexico, and back. Carnival Cruise Lines, Royal Caribbean, Princess Cruises and, as of recently, Disney Cruise Lines, all sail from the island.
The Port of Galveston tried to develop Pelican Island with a liquefied natural gas import facility in 2004. Residents said the agency violated the state OpenMeetingsAct and sued. This time port officials have met regularly with residents, sharing initial sketches, which is all that exists so far.
“We haven’t heard from them yet, but I’msure they’ll make themselves known,” Mierzwa, the port director, says.
The railroad company plans to hire an engineering firm byNov. 1, and an environmental reviewwill follow.
Galveston isn’t the only port on the Texas Gulf with coal export plans. Over the summer, coal giant Peabody Energy Corp. announced itwould export through Kinder Morgan Energy Partners’ Deepwater Terminal in Pasadena and theHouston Bulk Terminal in the Port ofHouston.
Another major player, Ambre Energy, is looking at exporting coal through Corpus Christi; Cline Mining has also expressed interest.
“There is just somuch coal that needs to be moved, it’s really not competition,” saidHelsley of Texas, Mexico and Pacific.
The Sierra Club has published a report critical of the coal port expansion in Corpus Christi. Together with several residents, it also objected in public comments.
In Pacific Northwest
But this opposition pales compared with that in the PacificNorthwest where a coalition of 87 environmental organizations called Power Past Coal is fighting proposed coal export facilities in Washington and Oregon. In Bellingham, Wash., 800 people turned out inMarch for a meeting intended to merely lay out future environmental reviewfor a large coal export terminal.
“TheWest Coast is shut down,” saysHelsley.
Somewho object to exporting coal are concerned about local shoreline damage, or damage to fish habitat. But for many, it’s about shifting emissions from theU. S. to Europe andAsia.
“Opening up the Powder River Basin to the export marketwill have a devastating effect on the climate and will lock in another 50 years of dirty investment in fossil fuel infrastructure,” said Earthjustice attorney JanHasselman, who has led the legalwork of the Northwest environmental coalition.
For now, Gulf Coast coal export companies appear free to proceed, bound only by the vagaries of coal markets, and the considerable cost of transport all theway through the Gulf and Panama Canal. But not by public protest.
John Lambert and Chris Teachworth, 34, out for some afternoon flounder fishing on Pelican Island, considered that Galveston could use more business. “The thing is, coal is dirty,” Lambert noted. “As long they’re onlymoving it and it doesn’t mess anything up.”