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Federal Judge Overturns Oakland’s Ban on Coal Export Terminal

June 29, 2018

A federal judge in San Francisco struck down the City of Oakland’s ban on the operation of a coal terminal, clearing the way for coal to be exported from the West Coast port.

In a victory for the coal industry, a federal judge struck down the City of Oakland’s ban on the operation of a coal terminal, clearing the way for coal to be exported from the West Coast port.

In his May 15 decision, U.S. District Judge Vince Chhabria ruled Oakland city officials violated a contract with developer Phil Tagami and his Oakland Bulk and Oversized Terminal when they prohibited the handling and storage of coal within the city limits in 2016 and retroactively applied the ban to his previously approved marine terminal project.

Tagami’s plans call for coal and petroleum coke to be transported from mines in Utah, Wyoming, and other areas to the $250 million terminal on the Oakland waterfront. From there the fossil fuels will be exported to Asia and other destinations. Estimates are the terminal will handle five million metric tons of coal per year.

Oakland officials approved the shipping terminal in 2013, concluding a contract with the developer that allowed the city to regulate the activities of the terminal if the government deemed it necessary to protect public health and safety. The contract was signed three years before Oakland imposed its ban on the handling and storage of coal, which city officials claim threatens human health. Tagami’s company, California Capital & Investment Group, sued, arguing the city’s action constituted a breach of contract.

‘Riddled with Inaccuracies’

In arguing coal exports from the terminal posed a threat to human health, lawyers for Oakland said coal dust particles would pollute the air to a degree endangering the health of residents in nearby low-income neighborhoods. In his decision, Chhabria said the city presented insufficient evidence to support the City Council’s contention coal and petroleum coke operations “pose a substantial danger to the people of Oakland.”

“In fact, the record is riddled with inaccuracies, major evidentiary gaps, erroneous assumptions, and faulty analyses, to the point that no reliable conclusions about health and safety dangers can be drawn from it,” Chhabria wrote. “Perhaps a more thorough investigation could result in a lawful determination that coal operations may be restricted at the facility, but in this case, the record was inadequate.”

Chhabria said a consulting firm hired by the city failed to give adequate attention to mitigation technologies the company planned to deploy. The judge said it was “a big mistake” for the city to ignore the use of railcar covers and chemicals to suppress dust emissions in assessing the project’s effect on air quality.

Chhabria characterized the city’s argument claiming coal could trigger spontaneous combustion as “nothing more than generalized speculation.”

Praise for Court’s Ruling

Fred Palmer, a senior fellow at The Heartland Institute, which publishes Environment & Climate News, says the court decision is sound legally and from a policy perspective.

“In overturning Oakland’s blatantly discriminatory and unconstitutional ban on exporting coal from public infrastructure within the city, the court’s action underscores the rule of law and is a breath of fresh air that should be welcomed by all,” Palmer said. “The Industrial Revolution, which the Left rejects, was driven by fossil fuels, with coal for electricity; natural gas for home heating, chemicals, and electricity; and oil for transportation. Thankfully, our country is blessed with all three.

“The environmental Left vilifies coal not for environmental reasons but because it represents electricity and electricity is life,” Palmer said. “The political leadership in Oakland is part and parcel of the national Democratic Party, which unfortunately has been captured by radical environmentalists, with its 2016 presidential platform calling for 100 percent ‘clean energy’ by 2050.”

Tom Altmeyer, former vice president for federal affairs at Arch Coal and a Washington-based energy consultant, welcomed the court’s ruling, saying it shows most of the judiciary still respects the rule of law.

“Fortunately, most federal judges still believe in the rule of law, which has successfully guided our nation for over 200 years,” said Altmeyer.

Bonner R. Cohen, Ph.D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.

Author
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
bcohen@nationalcenter.org

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