Presenting testimony before the Oakland City Council on Monday at the invitation of activist group the Sierra Club, the IEEFA said coal was a “risky” investment for Oakland and would not yield the export activity that the developer predicts.
IEFFA finance director Tom Sanzillo told the Oakland City Council that Bowie Resource Partners, the miner behind the Utah-sponsored coal portion of the mega-project, had an eroding domestic market share and would make a “weak partner” for a port deal.
The IEFFA’s testimony sought to put an economic argument behind what is essentially a green-sponsored offensive against the project, as environmentalists have raged against the proposal Oakland officials are using to try and attract more investment into the city.
Terminal Logistics Solutions has been in talks with four counties in Utah, which approved a $53 million investment in April to move materials including coal through the facility at the 33-acre former army base. The federal government decommissioned the base in 1999.
TLS president Jerry Bridges, a former Port of Oakland executive director, recently said “we’re doing everything we can to ensure we have successful, clean and CEQA [California Environmental Quality Act]-compliant terminal operations”
Bridges said the terminal could also receive shipments of potash, limestone and agricultural products from Utah.
Sanzillo pointed out, however, that coal was not part of the commodity mix that built the Port of Oakland, and did not need to be part of the army base terminal project.
“In fact, a commitment to coal will work to undermine the financial viability of the project,” he said.
“The promised benefits of coal exports through the terminal are unlikely to materialise – [and] that includes the 2300 permanent jobs identified by the operator.”
Sanzillo warned that accepting the proposed investment from the State of Utah would create risks for the public financing for the larger army base development, and that Utah financing may not even meet its own program’s rules and obligations.
The Utah investment in itself was a “red flag”, Sanzillo said, as it suggested private financiers were avoiding major coal investments.
“The failure of the coal portion of the project would ultimately require a public bailout,” he said.
“The risks associated with the proposal are not worth it.”