White House eyes military bases as potential fossil fuel ports

Source: Dylan Brown, E&E News reporter • Posted: Tuesday, October 16, 2018

Interior Secretary Ryan Zinke says the Trump administration could use military bases to ship fossil fuels from the West Coast and circumvent environmental opposition.

Coal and natural gas interests have been clamoring for more export capacity to reach markets abroad, namely in Asia, but state regulators have rejected permits for private terminal projects.

“I respect the state of Washington and Oregon and California,” Zinke told the Associated Press. “But also, it’s in our interest for national security and our allies to make sure that they have access to affordable energy commodities.”

Zinke specifically mentioned only one federal site that could potentially host an LNG export facility: the defunct Naval Air Facility Adak in Alaska.

Located on one of the most westerly Aleutian Islands, the base shuttered in 1997. Its location could make the facility a strategic way station for liquefied natural gas from Alaska’s North Slope.

“The president and secretary are committed to the men and women of coal country,” Interior spokeswoman Faith Vander Voort told E&E News, “and it should come as no surprise that Secretary Zinke has put a number of options on the table to revitalize these communities and achieve American energy dominance.”

As for coal, Andrew Blumenfeld, head of market analytics for research firm Doyle Trading Consultants, was not surprised by the news because the administration is reportedly considering a slew of novel measures to help the still-struggling industry.

“It’s a rather creative idea,” he said. “There would be a lot of opposition to it, but it’s very creative.”

A surge in exports over the last two years has helped coal companies weather the trend of power plant closures in the United States.

But proposals to add to capacity in the West have largely dwindled to two projects: the Millennium Bulk Terminals facility in Longview, Wash., and a former Army base in Oakland, Calif.

“Given both the Oakland and the Millennium bulk terminals are tied up in the courts so much right now, I guess the administration is looking at an end run by going through the military bases,” Blumenfeld said.

With military installations from Seattle to San Diego, Matt Preston, an analyst at Wood Mackenzie, said the federal site wouldn’t necessarily have to be a deepwater port.

The Port of Stockton, south of Sacramento, Calif., is one of the few West Coast ports to ship small amounts of coal today. It’s loaded on barges and ferried to large freighters. Rail access, by contrast, would be key to the success of a federal port, he said.

A federal facility could emulate coal facilities in Hampton Roads, Va., where train cars load directly onto conveyor belts feeding the giant ships. That would negate the need for a large laydown yard. But it’s unclear which federal sites might meet those criteria, he said.

“I’m not really familiar with what capacities are on federally run ports,” Preston said, echoing the sentiments of other analysts. “I can’t imagine that they’re set up for bulk dry goods.”

Reporter Benjamin Storrow contributed.