Blog: Is Utah Coal Going Global? Maybe.

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Blog: Is Utah Coal Going Global? Maybe.

By: Thomas Holst

A District Court judge recently overturned an Oakland City Council coal ban aimed at preventing deliveries of Utah coal, primarily from Carbon and Emery counties, from entering Oakland and loading onto tankers destined for Asian markets.

However, Oakland city officials plan to appeal the District Court judge’s decision.

The Oakland case arose when a local developer acquired the rights to develop waterfront acreage previously occupied by a military camp. After the developer announced plans to tranship coal through the terminal, the Oakland City Council enacted a ban on coal because public safety may be endangered by coal dust from uncovered rail cars.

This case is uniquely compelling because of the impact it could have on Utah counties as well as issues of constitutionality, the environment, sovereignty, and public safety.

Utah Counties

Demand for coal in the United States is dwindling, meaning a slowdown in revenue for areas with a large coal industry presence, such as Carbon and Emery counties. Gaining access to customers on a global scale could be a potential boon for these economies.

Constitutionality

Coal advocates sought to overturn the Oakland coal ban on grounds that only the federal government can regulate interstate commerce.

Environment

States along the West Coast have embraced renewable energies; California has already enacted legislation blocking transmission of coal-fired electricity in the next decade. Observers have queried if the Oakland coal ban is a “keep it in the ground” tactic that would prevent Japan, a member of the Paris climate agreement, from receiving coal at its two coal-gasification plants in Fukushima, site of the 2011 nuclear accident. After the Fukushima accident, Japan has shifted its energy mix away from nuclear based on its perceived risks.

Sovereignty

Japan is a sovereign entity acting in its own self-interest. Should California be allowed to enforce its policy preference on Japan? What would be the consequences if the proposed Oakland coal ban were upheld? While nobody knows for sure, the United States had a strong reaction after the 1970s oil embargoes. The Carter Doctrine of 1980 held that the United States would use military force, if necessary, to defend its energy interests in the Persian Gulf. While Japan is not likely to invoke its military, the underlying cause, access to natural resources, is the same.

Public Safety

The focus of the Oakland City council is public safety. The council argues that when coal’s hidden costs, including the impacts of greenhouse gases and health costs, are included, coal is more expensive than renewables and other fossil fuels. The success of the appeal by the Oakland City Council may rest on: 1) the issue of public safety, and 2) the historical tendency of courts to side with local authorities in such cases.

A similar case in Longview, Washington, involving imports of Wyoming coal has already arisen, guaranteeing that these issues will get a thorough hearing in both the legal system as well as the court of public opinion. On the assumption that the legal process may be lengthy, the Utah Governor’s office signed an agreement in August with the Port of Ensenada, located in Mexico’s state of Baja California, enabling exports of Utah’s natural resources.

Thomas Holst is a senior energy analyst at the Gardner Policy Institute.

2018-09-27T10:33:15+00:00September 21st, 2018|Blog, Economics and Public Policy, Practice Areas, Energy|