U.S. Coal Industry Seeks to Boost Exports Through Gulf of Mexico
U.S. coal companies are boosting exports through the Gulf of Mexico after meeting resistance to West Coast port expansions, according to John Schlosser, chief commercial officer at Kinder Morgan Terminals.
Opposition from environmental groups in the Pacific Northwest has led to “delay after delay after delay after delay” in establishing ports in that region to serve demand in Asia, Schlosser said today at the IHS McCloskey Coal USA Conference in New York.
“The coal industry really needs this capacity,” he said.
The Houston-based company is expanding terminals in the Gulf and the Southeast, including its Shipyard River operation in Charleston, South Carolina. Kinder plans to spend about $200 million to boost capacity there to 8 million tons a year from 2.5 million, and the project would be completed by 2015, Schlosser said.
Kinder also plans to spend $250 million to build a 15 million-ton-a-year operation at Port Westward in Oregon. He said that project was to begin in 2015, and now it may be 2016 or beyond, “given the opposition that continues to be thrown at it.”
About 35 percent of exports were of the thermal variety, used to generate electricity, with the remainder being more profitable metallurgical coal, Energy Department data show. That form is needed by steelmakers.
The Energy Department forecast June 12 that exports may drop to 106 million tons this year and 97 million in 2013. Exports averaged 56 million tons in the decade preceding 2011, according to the agency.
Coal on the New York Mercantile Exchange fell 13 cents to $54.05 a ton yesterday. Prices touched $54 on June 11, the lowest since March 15, 2010, and have dropped 22 percent this year.
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