Producers in the coal space are desperately looking for answers these days.
Miners are trying to find ways to maintain profitability. In the face of falling prices for most grades of coal globally.
The effects have been particularly strong in the U.S. Where environmental regulations, and abundant mine supply, have conspired to drop local prices to multi-year lows.
And the industry was dealt another blow this week. When a key export project was denied by regulatory authorities, now putting this high-hopes work in jeopardy.
The project is a coal terminal on the Pacific coast of Oregon. Advanced over the past two years by Australia's Ambre Energy--a firm specializing in the coal mining and marketing space.
Ambre had been looking to building the Pacific terminal as a new outlet for U.S. coal production. The concept being to ship coal from Montana and Wyoming westward by train and then river-borne barge. Eventually being loaded onto ships for transport, primarily to Asian consumers.
But the Oregon Department of State Lands said Monday that plan is a no-go. Finding that Ambre hadn't done enough analysis of alternatives to prevent harm to tribal fisheries along the proposed export route.
The state department will therefore deny Ambre permits to build the project. Putting the future of this export route in doubt.
The ruling is particularly interesting as a possible precedent for other coal projects planned on the U.S. west coast. There are currently three export projects in the works--but Ambre's is the most advanced in terms of planning and permitting. This week's ruling may thus suggest developing headwinds to the concept of Pacific coal exports in general.
Ambre has the option to appeal the state decision. But until we see any progress on such a front, the future of this option for U.S. producers should be considered substantially diminished.
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Here's to moving it out,
Dave Forest
