Alaska, Business, Harbor News

First coal ship signals slow season ahead as U.S. Supreme Court denies appeal

Coal Ship Double Progress loads up in Seward's Resurrection Bay.  The first coal ship of the year. Heidi Zemach photo.
The coal ship Double Progress loads up at Seward’s coal transfer facility in Resurrection Bay. Heidi Zemach photo.

By Heidi Zemach for SCN –

Since its arrival on Saturday, M/V Double Progress, the first coal ship to dock at Seward’s Alaska Railroad Terminal since last November, has been loading 72,000 metric tons of coal, bound for Japan. Aurora Energy Services, LLC says it will receive between two and four coal ships this year, or more if Usibelli Coal’s Seward coal export facilities’ subsidiary can get additional contracts.

Meanwhile, in a blow to the company, the U.S. Supreme Court has declined to hear an appeal by Aurora and the Alaska Railroad Corporation to the  Ninth Circuit Court of Appeals’ unanimous decision (September 2014) that the company could not allow coal to be released into the bay during the ship-loading process under the terms of its storm water discharge permit. The decision makes it possible for the companies to be held responsible for spilling coal into Resurrection Bay from the coal loading facility.

“Now we would like to see Aurora Energy and Alaska Railroad focus their efforts on protecting community and environmental health by preventing pollution into Resurrection Bay and harmful dust emissions,” stated Pamela Miller, the executive director of the Alaska Coalitions on Toxics, in a June 8th Press Release.

The appeal was one of several cases declined to be heard by the U.S. Supreme Court. The court does not state the reason it declines to hear appeals. Two of the environmental organizations’ other initial charges alleging that fugitive coal dust from the stockpile was blowing into the harbor, and coal dust settling on snow was plowed into the bay were dismissed earlier by the court.

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Alaska Community Action on Toxics and the Alaska Chapter of the Sierra Club, represented by attorneys with Trustees for Alaska and  the Sierra Club Environmental Law Program brought the original action. Their total legal expenses reached $700,000.

The defendants spent $2.2 million defending the facility against the lawsuit as of August 2014, according to legal documents asking the court to be allowed recover some of those fees.

Aurora Energy Services’ general manager Rob Brown was reluctant to comment on a matter that he said is still in litigation. But, he told SCN, “There’s been a lot of work done, and it will continue to be done.” He added; “We’ve already done a lot, and if it wasn’t for this case that they brought forward, there could be more done. It’s just the nature of our business. You’re always looking for ways to improve your processes. The facility’s better than it was five years ago, and it was better five years ago than it was five years before that.

Work over the past winter to address concerns of coal falling off the conveyor belt into Resurrection Bay, Brown said included enlarging the enclosure that runs beneath the conveyor belt that goes out over the water, from the shore to the ship loader. The company also did work on enclosures on conveyors on the ship loader itself, plus miscellaneous things like installing additional belt scrapers. The Alaska Department of Environmental Conservation and Environmental Protection Agency have both inspected their work, and DEC has commended Aurora’s efforts, according to Brown.

AES and ARRC had put a good argument before the Supreme Court, and as the court did not say why it declines to take cases, they don’t want anyone to jump to conclusions on whether their claims were valid, Brown said. The two companies had won two of the three points raised in the case, he added. Now the case goes back to Judge Burgess, in Federal District Court, to determine whether the company has to pay any penalties or attorney’s fees, not whether the case was valid.

The decades-old Seward coal facility has historically handled half a million tons of coal a year, or between six and eight shiploads, and at its peak has handled in excess of a million tons. Last year Seward only saw about 6-7 ships visit, Brown said. The market for coal generally has cooled down, with the lower tonnage the result of the market slowing down in the Pacific Rim, where a strong U.S. dollar weakens exports from the United States, combined with an oversupply of coal coming out of Indonesia, he said. Whereas historically, Aurora Energy employed 12 full time employees on average, they now employ eight full-time workers, and a few others help out when needed, Brown said.

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