Battle looms over expanding shipments of coal in Houston

The expansion of a terminal along the heavily industrialized Houston Ship Channel normally receives little attention. But Kinder Morgan Energy Partners’ plans to refurbish two docks have opened a new front in the fight over coal.

Environmentalists are mounting a campaign to stop the projects and a dozen other proposed shipping terminals along the Gulf Coast because the docks, if built to capacity, could export as much as 200 million tons of coal per year from Appalachia and the Rockies to Asia and Europe.

They say exporting the sandy black gold will threaten local air quality, particularly near docks and rail lines, while encouraging China and others to burn more coal and increase emissions of carbon dioxide and other climate-altering gases.

“It’s hard to see how Houston wins,” said Al Armendariz, a former Environmental Protection Agency official who leads the Sierra Club’s anti-coal campaign in Texas.

New business: Kinder Morgan launches business to invest in coal

Kinder Morgan says it’s expanding terminal business to include coal because of growing demand. The project would create jobs during construction and to operate the dock, a company spokeswoman said.

The environmental battle comes as the U.S. is using less and less coal because of the rise of cheap natural gas and tougher regulations for air pollution. But overseas demand, particularly in China and India, remains high, and coal companies are moving quickly to open shipping terminals to capitalize on those expanding markets.

Despite environmental concerns, coal remains desirable because it is widely available and easy to ship and burn. China alone consumed roughly 3.8 billion tons in 2011, nearly as much as the rest of the world combined, the Energy Information Administration found.

“The U.S. coal industry is not going away,” said Kenneth Medlock, senior director of the Center for Energy Studies at Rice University. “It’s just going overseas.”

$400 million project

Only limited capacity at U.S. shipping docks has restricted coal exports, prompting the industry push to build more, he said.

So far, the fiercest fights have come in the Pacific Northwest, which offers the most direct path between the coal mines of Montana and Wyoming and Asia But the delivery routes would cross the eco-conscious states of Oregon and Washington, where political leaders have called for deeper-than-usual environmental reviews of proposed coal-export terminals before issuing permits.

Coal companies, meanwhile, are looking increasingly to ship their product though Gulf Coast ports. There are plans to build or expand at least 12 terminals from Alabama to Corpus Christi.

Moving fuel: Energy pushes Houston to nation’s top exporter

Houston-based Kinder Morgan is one of the biggest players on the Gulf Coast, proposing a $400 million expansion of three terminals along the Ship Channel and in Louisiana. The company does not mine coal, but would provide the export infrastructure for coal producers, such as Arch Coal and Peabody Energy.

To meet their partners’ needs, Kinder Morgan plans to expand two terminals where the Sam Houston Tollway crosses the Ship Channel in east Harris County The company now runs smaller docks at both sites for petroleum coke, a coal-like leftover from nearby refineries.

The project would require an expanded railway system, construction of access roads and additional capacity for coal storage, according to a pending permit undergoing federal review.

The company hopes eventually to export 27 million tons of coal each year from its Gulf Coast terminals, including one near New Orleans

Coal dust concerns

Environmentalists say the international trade of cheap coal will discourage countries from moving to cleaner energy sources, like solar and wind. They also worry about coal dust escaping from open rail cars in and around Houston, which is in danger of violating federal limits for tiny airborne particles, or soot.

Q&A: Execs discuss Kinder Morgan’s newest ‘toll road’

Particulate matter from industrial flares, diesel exhaust and road grit, among other sources, are so small that thousands could fit on the head of a pin. They can get deep inside the lungs, causing disease.

“This dust will build up in neighborhoods,” the Sierra Club’s Armendariz said. “It doesn’t blow away.”

Emily Mir, a Kinder Morgan spokeswoman, said the company would use the latest technology for controlling dust and comply with all environmental regulations.

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