Study: Proposed Cherry Point coal terminal could mean fewer jobs, not more

THE BELLINGHAM HERALDMarch 6, 2012 

BELLINGHAM - A new economic analysis of Gateway Pacific Terminal indicates that the proposed coal export pier could mean a net loss of jobs for Whatcom County, if it harms tourism, waterfront redevelopment and the county's overall image.

But David Eichenthal, one of the study's authors, stressed that he has no crystal ball.

"I can't give you certainty this morning," Eichenthal said as he presented his company's research at a community meeting Tuesday, March 6, in The Leopold's ballroom downtown. "Unfortunately, when it comes to economic development projects like this, there usually isn't very much certainty."

The Communitywise Bellingham organization paid Public Financial Management Inc. of Philadelphia $50,000 to conduct the study, using both local contributions and grants.

Communitywise Bellingham was formed in 2011 to gather information on the Gateway Pacific project and its potential impacts on the city. Public Financial Management is a nationwide consulting firm that specializes in providing economic research to state and local governments and nonprofit agencies. It has offices in 30 states.

Eichenthal noted that SSA Marine, the company proposing to build Gateway Pacific at Cherry Point south of the BP refinery, has estimated the project would create 867 new direct and indirect permanent jobs. It estimates another 3,587 direct and indirect temporary jobs would be created during the two-year construction phase.

But the coal terminal's operations - especially the coal train traffic it would generate through the heart of Bellingham - could mean some loss of jobs, Eichenthal said.

He calculated that if the terminal's operations result in a 17 percent reduction in job growth that would otherwise occur, it would have no net economic benefit to Whatcom County. If the negative impact on job growth were greater than 17 percent, its total effect on the county's economy would be harmful.

How could Gateway Pacific harm Whatcom County job growth? Eichenthal cited three possible ways, mostly related to the impact of added coal train traffic through the city:

- Passing coal trains could make the city's developed waterfront areas less attractive and accessible, harming tourism.

- The trains also could hamper efforts to redevelop the former Georgia-Pacific Corp. mill site, envisioned as an eventual source of thousands of new jobs.

- Coal trains could harm the city's image as an attractive place to live, discouraging higher-income people from moving here to work or retire.

SSA Marine says the first phase of the project would have capacity to handle five loaded trains per day. If the project were eventually built to full capacity, it could attract nine trains, and those trains would likely go back through Bellingham on their return trip.

Some coal trains are already traveling through the city en route to export terminals in British Columbia. SSA spokesmen have argued that if their Whatcom County project is not built, coal train traffic will increase anyway, as Chinese coal consumption increases and more coal is exported from Canada.

But Eichenthal's study says that is far from certain, like most economic factors relating to the Gateway Pacific project.

Ken Oplinger, president of the Bellingham/Whatcom Chamber of Commerce and Industry, said he was skeptical of the new study's value.

"I think it parrots back questions that this community has been asking for months now," Oplinger said. "I don't see how this has really added to the dialogue."

Oplinger said a better estimate of the project's potential impacts might be gained from study of other locations where coal shipping occurs, including a coal port in Australia that has been built in an area with a major tourism industry.

Oplinger has been receptive toward the Gateway Pacific proposal, but he said he and the chamber's members are awaiting the results of the environmental and economic review process to determine whether the project is in the community's best interests.

Craig Cole, a spokesman for Gateway Pacific, said the company has not yet had a chance to review the new study, but people should not be quick to dismiss the economic boost the project could deliver.

"Nothing drives community well-being and boosts home ownership and property values like broadly-shared prosperity of the kind that Gateway would bring," Cole said in a prepared statement.

Eichenthal acknowledged that the economic impact calculation changes along with the assumptions. He noted that SSA's jobs projections are an average of two other economic projections, one high and one low. If the actual number of jobs created by the project is below projections, that would increase the likelihood that the overall impact will be negative.

He also noted that projected new job creation in tourism and on the waterfront could be too high. That would make Gateway Pacific less risky in economic terms.

"There are lots of economic development projects that look good on paper but don't necessarily get realized, for market reasons," Eichenthal said.

Once the economic and environmental analysis begins in earnest, government decision-makers may have more precise information on how the operation of Gateway Pacific would affect other prospects for job creation.

In a later interview, Eichenthal suggested that as part of that process, consultants could conduct focus groups to get an estimate of how coal train traffic might affect visitors' perceptions of Bellingham as a desirable destination.

Eichenthal's report noted that the environmental review process is likely to take far longer than SSA Marine spokesmen have estimated. The company has used a timeline that shows the project complete and shipping coal by 2015, assuming a two-year environmental impact study process.

The new report says some state officials are estimating the review process could take as long as four years, pushing the terminal's opening date back to 2018, or later.

READ THE REPORT ONLINE

See the report on Communitywise Bellingham's website.

Reach John Stark at 360-715-2274 or john.stark@bellinghamherald.com. Read his Politics Blog at TheBellinghamHerald.com/blogs.

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