NO CLEAR WINNER IN BC

Neptune Terminals The expansion of Neptune Terminals is underway to meet future coal demand
Industry Database

There’s a huge brawl underway in British Columbia, Canada. At stake is the future of coal ports, especially of coal export terminal facilities, as Gordon Feller reports.

Coal remains an important industry to Canada. It employs approximately 42,000 people directly and indirectly and salaries are signifi cantly higher than the average national wage. It is also indelibly linked to the mining industry in the country and, according to the coal industry itself, fosters a “knowledge-based economy” because it requires highly skilled and technical specialists, including engineers, geologists, and technologists.

According to the Government of Canada, the main use for coal is electricity generation and in 2018 the country produced 62 million tonnes, of which 85 per cent is from Alberta and British Columbia (BC). Of this total, 34 million tonnes was exported, primarily through ports on the West Coast.

In 2018, the Government also announced final regulations to phase-out traditional coal-fired electricity by 2030. So, does this mean the end to coal handling for ports?

Unsurprisingly, there are two sides to this argument, those opposed to the existing and any new terminals and those factions who are in favour of existing and, potentially, new facilities. The key arguments from both sides is considered further.

A WIN FOR THE CLIMATE

Those opposed to the coal industry state that the climate emergency is one key reason why BC is suffering from many more floods and forest fires than usually would be the case, while coal trains leave a trail of toxic dust and climate destruction, in return for scant economic benefits.

The impact on local communities is also negative and there has been some success. A campaign stopped Fraser Surrey Docks, which wanted to ship substantial annual volumes of US thermal coal to power plants in China through this Canadian facility, when in Q1 2019, the Vancouver Fraser Port Authority cancelled a project permit for the export terminal.

The project was initially approved in 2014, for a facility that would handle more than four million tonnes of coal annually, most of it transported by rail from the U.S. The project was opposed by Metro Vancouver, Surrey, Vancouver and environmental groups, who raised climate and health concerns and after five years were successful.

Environmental group Ecojustice called the decision “a win for the climate,” and a death knell for the coal export project. By comparison, those in favor of the existing and new terminals build their arguments around the infrastructure and economics. Transporting coal requires an efficient and interconnected network of rail and port infrastructure critical to get Canadian coal to market.

Moreover, coal is one of Canada’s top bulk commodities transported by rail and handled by ports, with annual activity of between 30 million tonnes and 40 million tonnes transported by Canadian National (CN) and Canadian Pacific (CP) rail operators and handled by west-coast ports in BC. Both CN and CP have made major efforts to support the coal industry through increased cooperation and track sharing.

This commodity and infrastructure activity can offer numerous benefits, including employment, investment in physical infrastructure, taxes and royalties. Plus, as the Government of Canada confirms, the country’s domestic coal consumption still reaches up to 40 million tonnes annually, with the majority of this consumption used for coal-fired electricity – although around 4 million tonnes is transformed each year into coke and used in the iron and steel industry.

THE PORT PERSPECTIVE?

To keep pace with recent and projected demand, there is ongoing infrastructure investment, such as at Neptune Terminals in Vancouver (BC). Anticipated capacity of the facility is expected to be increased as a result of the improvements, from 12.5 million tonnes per annum to 18.5 million tonnes per annum - in terms of capacity, this equates to approximately an additional coal unit train per day being processed at the facility, and approximately 0.3 additional ships per week being loaded at the berth.

The port authority further highlights that the proposed handling facilities fit entirely within the existing terminal footprint, and the increase in annual capacity is achieved through faster “turn” of the coal stockpile. With the proposed improvements, the process of transferring coal from trains to stockpiles to ships would become more efficient, allowing greater throughput hence overall coal export capacity. With 2019 seeing a total of 36.9 million tonnes of coal handled at the port, it remains a high-volume activity and revenue generator.

On the face of it, the position represents a crucial choice between the impact on the environment and the economic benefits to the country, local regions and direct/indirect workforce connected with the movement of coal from mining source to port of export. At the moment, there is no clear winner.

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