Wyoming coal company strikes export deal to use Cherry Point terminal

THE BELLINGHAM HERALDFebruary 14, 2013 

A Wyoming mining company has signed an option agreement allowing it to ship up to 16 million tons of coal a year through Gateway Pacific Terminal at Cherry Point — if that project can get the regulatory approvals it needs.

Cloud Peak Energy said Wednesday's deal involving Gateway Pacific Terminal, proposed by SSA Marine of Seattle, will allow it to expand overseas sales amid weak domestic demand.

The company has mines in Wyoming and Montana. It shipped 4.4 million tons of coal to Asian customers in 2012.

In 2011, coal industry giant Peabody Energy made a similar deal with SSA, declaring an intent to export as much as 24 million tons of coal per year via the Cherry Point facility.

Together, Cloud Peak and Peabody could ship 40 million tons of coal via Gateway Pacific, the lion’s share of the terminal’s announced capacity of 48 million tons of coal. SSA has also announced its intention to build facilities that could handle another six million tons of other commodities, for a total capacity of 54 million tons of cargo per year.

At that level, the terminal would add 18 trains per day through Bellingham, including loaded trains headed to the terminal and empty trains returning to mines and other commodity sources.

Craig Cole, a Gateway Pacific spokesman, said the Cloud Peak deal should not be interpreted to mean that the terminal will handle only coal.

"The company continues to solicit customers for any of the commodities it can potentially ship," Cole said. "An investment of this magnitude can't be reliant on just one customer or just one commodity over time."

Cole acknowledged that coal is the most promising commodity under today’s market conditions, but he added that the company may have announcements about other export cargoes in the future.

Gateway Pacific faces years of environmental study, and regulatory agencies got more than 120,000 public comments during the first phase of the study process to determine what environmental issues need to be resolved. The project could begin commercial operations by 2018 if it can get approvals from Whatcom County, the Washington Department of Ecology and the U.S. Army Corps of Engineers, among other agencies.

Cloud Peak has a separate option agreement to ship 5 million tons of coal annually through a second Washington port, the Millennium Bulk Terminals in Longview. That terminal is also undergoing regulatory review, and both port proposals are strongly opposed by environmental groups.

The Cherry Point project has also stirred up opposition in the city of Bellingham, partly because of the increase in train traffic.

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