Port of Oakland

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Port of Oakland is a major container ship facility located in Oakland, California, United States.

A coal export terminal has been proposed at the port by Insight Terminal Solutions (formerly Terminal Logistics Solutions), a subsidiary of Wolverine Fuels LLC.

On June 27, 2016, the Oakland City Council voted unanimously to ban the handling and storage of coal at the Port of Oakland. That ruling was fully overturned in August 2020, but by that time Insight Terminal Solutions had gone bankrupt.

In July 2021, the new owners of Insight Terminal Solutions again floated a proposal for a coal terminal at the Port of Oakland. It is unclear whether that proposal is likely to proceed.

The Insight Terminal proposal at the Port of Oakland is one of nine proposed coal terminals in the Pacific Northwest that has been cancelled or shelved since 2010.

Location

The port is located in Oakland, California, on the San Francisco Bay.

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Background

In 2011 the port was ranked the fifth busiest container port in the United States, behind Long Beach, Los Angeles, Newark, and Savannah.

The port has been the site of coal export proposals. Two bids were rejected in February 2014, including one by Bowie Resources. In July 2014, a resolution was passed by the Oakland City Council “opposing the transport of coal, oil, petcoke (a byproduct of the oil refining process) and other hazardous materials by railways and waterways within the city.” However, as of 2015 Bowie Resources is still pursuing a coal terminal at the port, to exports its Utah coal to Asia.

Coal export proposals

Howard terminal

The Port of Oakland received bids in December 2013 from two developers to construct a coal and fossil fuel export facility at the 50-acre Howard Terminal site. One of the potential developers, Bowie Resources, had projected to construct an 8 million short ton per year bulk export facility, including 4 million short tons of coal and 1 million short tons of petreolem coke. Kinder Morgan, Metro Ports, and California Capital Investment Group (CCIG) also placed a bid for a facility with a likely fossil fuel export component. In February 2014 the Port of Oakland Board of Commissioners voted to reject the proposals, citing environmental problems, public health hazards, economic pitfalls, and public opposition.

Army Base redevelopment terminal

In April 2015 Terminal Logistics Solutions, which was owned by Bowie Resources, said it planned to start building a US$250 million terminal at the Oakland Army Base in Oakland Port before the end of the year, and hoped to finish the 35-acre project in 2017. Four Utah counties were working on securing US$53 million from a Utah state agency called the Community Impact Fund Board (CIB) to invest in the new terminal. Three of the four counties produce all the coal in Utah. In return for the investment, Utah can send 49% of goods annually through the bulk shipping terminal, including coal. The Utah Community Impact Fund Board reportedly approved the investment with no written reports or studies, just the oral testimony of officials in the four counties requesting the money. County representatives told the board the money needed to be approved quickly with a June 2015 deadline to sign agreements with Terminal Logistics Solutions.

The terminal would export 4.5 to 5.5 million short tons (approximately 4.1-5 million metric tonnes) a year from Utah through the Oakland Army Base. Utah coal exports currently go through the Port of Stockton, a privately-owned port in Richmond called Levin-Richmond Terminal, and through the Port of Long Beach.

In August 2015 the East Bay Express reported that the proposed investment in the bulk marine terminal by the Utah counties was being driven by Bowie Resources, to export coal from Bowie's Sufco Mine in Utah to Asia. Jeffrey Holt, chairman of Utah's Transportation Commission since 2009, was advising the four counties on their Oakland Port investment, and advising other Utah counties on publicly funding a rail connection from Utah to Oakland via Pacific Railroad. Holt will personally benefit if the projects go through, as he is also an investment banker with the Bank of Montreal backing the rail project. As news of public funding for the port project first emerged, Holt emailed commissioners of the four Utah counties, writing: "We've had an unfortunate article appear on the terminal project. If anything needs to be said, the script was to downplay coal, and discuss bulk products and a bulk terminal." Holt also wrote that Phil Tagami, the master developer of the base, was disappointed that the plan to export coal had been made public. According to the Express, records also show that Bowie Resources' plan to mine coal from Sufco appears to depend on the Oakland deal going through and that the company might not otherwise find a market for the fossil fuel.

In December 2015 Holt resigned as head of the Utah Transportation Commission. However, Holt is still working for BMO Capital as an advisor to the counties and still working on the coal terminal deal.

In March 2016, the Utah legislature approved a bill to provide US$53 million towards the cost of the port expansion. Bowie Resource Partners donated US$29,000 to key Utah legislators championing the passage of the bill.

On June 1, 2016, the California State Senate passed a bill to require environmental reviews for the plan to ship coal by rail through Oakland.

On June 27, 2016, the Oakland City Council voted unanimously to ban the handling and storage of coal at the Port of Oakland.

In August 2016 four Utah counties withdrew an application for a public loan they wanted to use to finance the Oakland coal port's construction. One week later Bowie Resources cancelled its planned IPO. According to the East Bay Express: "Bowie executives cited 'market conditions' as the reason for withdrawing their IPO. The public offering would have raised $100 million for Bowie, money that could have been used to expand its coal mining operations in western US states, including Utah, where Bowie already has several operating mines. Some of the funds could have also been used to help finance construction of the Oakland coal export terminal. The terminal had an estimated price tag of $275 million."

Oakland developer Phil Tagami has threatened to sue Oakland over its coal ban. Tagami claims that the city's decision interferes with his existing vested rights to develop an export terminal for coal and other commodities. However, as reported by East Bay Express: "even if Tagami sued and prevailed, it's unclear whether Bowie has the financial resources anymore to back construction of the terminal."

In 2018, when Bowie Resources rebranded itself as Wolverine Fuels, its front company Terminal Logistics Solutions also rebranded as Internal Logistics Solutions. By 2019, the entity pushing to develop the coal terminal at the Port of Oakland was being called "Insight Terminal Solutions".

In May 2018, a federal judge struck down the Oakland City Council's coal ban, stating that the city had breached its $250 million contract with Phil Tagami and failed to prove that the coal terminal would “pose a substantial danger to people in Oakland.” The city appealed the ruling, but the judgment was upheld in the US Court of Appeals in May 2020.

Insight Terminal Solutions went bankrupt in August of 2019, prior to the appeals court ruling, and its main financier, the Bank of Montreal, had pulled its funding. At that point, in order to remain solvent and pay US$20 million it owed to its creditors, Insight was fully depending on the State of Utah providing a cash infusion of US$20 million. Without an infusion of the full US$53 million from four Utah counties, its coal terminal proposal was not economically viable. Insight originally hoped to have the money disbursed quietly from the US$53 million fund, but public scrutiny generated by a coalition of environmental groups slowed down the process. Insight then planned to have the funds disbursed in a special session of the Utah legislature.

In committee, Utah democrats proposed to transfer the US$53 million to the general fund, where it would be used for "educational needs, healthcare and economic development needs" in rural Utah, but the democrats' proposal was rejected in committee on a strictly partisan vote. However, during the general legislative session, the US$20 million bill was never introduced, thanks in large part to the organizing efforts of the environmental coalition.

Without the infusion of money from the Utah legislature, Insight did not have "a single dollar to fund the plan" for the coal terminal, according to a bankruptcy court in Kentucky. In November 2020, that court approved the transfer of the sublease for the section of the port where the coal terminal was going to be built to one of Insight's major creditors, Autumn Wind Lending LLC. This transfer appeared to kill the proposal for a coal terminal at the former Oakland Army Base, as Autumn Wind "has no apparent interest in coal." The bankruptcy proceeding also meant that Autumn Wind took control of Insight Terminal Solutions.

However, in July 2021, the new owners of the sublease at the Oakland Port again floated proposals for a coal terminal at the Port of Oakland. A front man for Vikas Tandon, who manages Autumn Wind as well as an entity called JMB Capital, claimed that they had investors lined up who were ready to fund the US$250 million port. The city and Insight were engaged in an ongoing lawsuit, and given that the economic viability of the port project had always been questionable, local observers suggested that the sublease owners were bluffing to secure a more favorable settlement with the city.

Opposition

City Council

Critics of Bowie's proposed export terminal say the plans conflict with a July 2014 resolution passed by the Oakland City Council opposing the transport of coal, oil, petcoke, and other hazardous materials within the city. Supporters say the Oakland Army Base redevelopment project was approved by the city in 2012, did not automatically preclude fossil fuel shipments through the terminal, and was finalized before the resolution. The development agreement does allow the city to apply new regulations to the project if the city determines, “after a public hearing,” that the failure to do so would place neighbors “in a condition substantially dangerous to their health or safety.” In September 2015 the City Council held a public meeting on the health and safety impacts associated with the coal export facility. More than 600 people signed up to testify about the plan. On June 27, 2016, the Oakland City Council voted unanimously to ban the handling and storage of coal at the Port of Oakland.

Lawsuit

In October 2015 Earthjustice filed a suit alleging that the city of Oakland and developers California Capital & Investment Group and Prologis Inc didn't properly assess the effects of coal shipments on the local community. Local groups are seeking a new review over the effects of coal exports under the California Environmental Quality Act (CEQA).

Project Details

• Sponsor: Insight Terminal Solutions
• Parent: Autumn Winds Investing LLC
• Location: Oakland, California
• Proposed Coal Capacity: 5 million metric tonnes per annum
• Status: Announced
• Type: Exports
• Coal Source: Utah
• Cost: US$275 million
• Financing: Utah Community Impact Fund Board (US$53 million - proposed)

Articles and resources

Related GEM.wiki articles

• Utah and coal
• Coal terminals

External resources

• "Coal Free Oakland," Sierra Club San Francisco Bay Chapter
• No Coal in Oakland