If investors decide to locate an export terminal in Coos Bay to transport coal to markets in Asia, it won’t be the first time ships have docked at the Southern Oregon port to fill up with loads of coal.
The Port of Coos Bay sits on top of its own coal field about 30 miles long and 15 miles wide; so mining was an important early industry for the area.
Max Clausen, who is 80 years old, owns a large oyster farming business on a quiet inlet along Coos Bay. Clausen says his grandfather owned one of the last operating coal mines in a nearby town called Riverton. Clausen remembers visiting it as a child.
“He had a railroad going down into the mine, and a Shetland pony to pull it,” Clausen says.
Settlers opened the first coal mine in the Coos Bay area in the 1850s, and by the end of the century, more than 70 mines had sprung up around the bay to supply coal to San Francisco, to fuel railroads and ships.
Communities like Libby, Beaver Hill, and Riverton grew around the mines.
Hannah Cooney, a researcher with the Coos Historical and Maritime Museum, says that in the late 1800s, the mines attracted an incredible diversity of settlers to Coos Bay, including African-Americans and German and Chinese immigrants.
The Japanese conglomerate Mitsui and California-based Metro Ports are two of the key players in a bid to develop a coal export terminal with the Port of Coos Bay, EarthFix has learned.
The companies entered into a confidential negotiating agreement with the port in late 2011.
“I can’t even imagine how they all learned about this and came here, but they knew the practice of coal mining,” she says.
Joy Robins lives in Libby, a quiet neighborhood filled with greenery on the south end of Coos Bay. Robins says coal miners once helped buy a bell for the local school in Libby. A portrait of a man with a mustache hangs on her wall in a heavy, round frame.
“My great grandfather, from Turin Italy, Thomas Bassanti, worked in the coal mines” she says, referring to the man in the portrait.
But in the 1900s, fuel oil began to replace coal on the west coast. By the 1940s, Cooney says the last mines shut down.
Cooney says Coos Bay’s remaining coal reserves are small and low grade, and haven’t attracted much recent attention.
For the past six months, the Port of Coos Bay has been negotiating with investors interested in moving coal, by rail and ship, from mines in the Powder River Basin in Montana and Wyoming to markets in Asia.
David Koch is the Port’s acting CEO. He says three companies are drawing up plans for a terminal that could load ships with coal on a sandy spit near the entrance to the Port.
“We have a terminal operator, an end user, and a commodity trader in this project” he says.
Koch says the negotiations are to export up to 10 million tons of coal from the port every year to a power utility company in Asia. According to the Port’s engineering study, an average of two coal trains per day, 135 cars long, would arrive at the port.
“The destination for the coal from Coos Bay is not China. It is some other Asian country,” Koch says.
The Port has signed a confidentiality agreement and isn’t naming the companies involved. However, EarthFix has learned the Japanese conglomerate Mitsui and California-based Metro Ports are two of the key players in a bid to develop a coal export terminal with the Port of Coos Bay.
Mark McMullen, Oregon’s acting state economist, says Coos County badly needs jobs, but he’s skeptical than a coal export terminal will effectively stimulate the local economy.
“Unlike Coos Bay’s early history when they were actually doing the mining and all the other associated economic activity, this would just be a waypoint where we’re just talking about a handful of long shore jobs on a permanent basis” he says.
David Koch says that jobs are important, but just part of the economic picture. The Port also expects the companies interested in building a coal terminal to invest in local infrastructure, in particular the Coos Bay Rail Link line, and a proposed deepening of the Port’s navigation channel.
The Port of Coos Bay acquired the short-line railroad that connects the South Coast to Eugene in 2009, after a private company abruptly shut it down.
Koch says the line has suffered from years of deferred maintenance, and the port needs partners to help finance repairs and upgrades.
A recent rail capacity study, funded by the coal terminal developers, found that the line needs between $100 million and $200 million in repairs and upgrades before it could handle daily coal trains.
“We’ve got about $40 million of repairs on just the bridges alone,” Koch says, adding that the port has made it clear it expects terminal developers to pay for upgrades to the rail.
McMullen, the state economist, says making the rail line stronger could help the Port of Coos Bay attract more business, but he cautions that some infrastructure investments necessary for coal transport don’t benefit other industries much.
McMullen adds that as Coos Bay has experienced in the past with both coal and timber, natural resource markets are volatile.
“These energy commodities are certainly a boom-and-bust proposition. And foreign demand can evaporate as fast as it materialized,” he says.
Koch says the companies the port is is working with haven’t signed any binding deals to yet to buy land or build a coal terminal in Coos Bay, and could still decide to go elsewhere.
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