Gov. Brown signs bill banning state money for coal exports

Source: Anne C. Mulkern, E&E reporter • Posted: Tuesday, August 30, 2016

California Gov. Jerry Brown (D) signed a bill Friday aimed at cutting coal exports from the Golden State.

Brown approved S.B. 1279 from state Sen. Loni Hancock (D), which takes effect in 2017. It blocks the California Transportation Commission from giving state funds to any new transport terminal “that stores, handles, or transports coal in bulk.”

“Action on multiple fronts will be needed to transition away from coal,” Brown said in a statement. “In California, we’re divesting from thermal coal in our state pensions, shifting to renewable energy, and last year, coal exports from California ports declined by more than one-third, from 4.65 million [tons] to 2.96 million tons. That’s a positive trend we need to build on.”

Brown noted that the city of Oakland had just banned shipments of coal and argued that “other localities should follow suit — and the state should, too — to reduce and ultimately eliminate the shipment of coal through all California ports.”

“I will continue to work with the Legislature on further actions to curb coal and combat climate change,” he added.

The bill came in response to a controversial project from developer Phil Tagami, who has been described as a friend of Brown’s. The governor previously was mayor of Oakland.

Tagami was part of a consortium that planned to build the $250 million Oakland Bulk and Oversized Terminal at the former Army base in the city, at the port. The group applied for and received a monetary grant from the California Transportation Commission. The application did not talk about coal, said Kathryn Phillips, director of Sierra Club California.

Tagami subsequently began speaking with a group of four Utah counties interested in shipping coal to China. They would pay to use the new terminal to export the fuel, Phillips said.

When word leaked out, the project became controversial. The proposal would have made Oakland the largest coal export facility on the West Coast and increased national coal exports by 19 percent, Sierra Club’s San Francisco chapter said on its blog.

“It was an embarrassment that the state’s money was being used for something that no one had any idea, when the money was being granted, what it would be used for,” Phillips said, meaning coal exports.

David Smith at Tagami’s law firm in an email declined to comment Friday on Brown signing the bill.

Last week, the four Utah counties withdrew a joint application to use $53 million of Beehive State money to ship coal to Oakland, the East Bay Times in California reported.

Oakland last month passed the ordinance that Brown noted, prohibiting handling or storing coal in the city. That stopped the coal from being housed at Tagami’s proposed terminal. Hancock’s bill ensures it won’t happen elsewhere in the state, Phillips said.

State Sen. Hancock introduced the measure in February “after she learned that a proposed development project on city-owned land in Oakland would export up to 10 million tons of coal annually to China and other Asian countries,” her office said in a statement. Right now, California exports about 3 million tons annually.

Hancock, whose district includes Oakland and other East Bay communities, said she felt “compelled to introduce legislation to close loopholes in the law and ensure that other cities will not face similar problems in the future,” the statement said.

State funding typically is needed to get terminal projects built, advocates of the measure said.

“You can’t build a coal export facility just with private funds. It would not happen,” Phillips said. “It would be very, very unusual for any kind of terminal project to get built without public funding.”