Exports of Utah coal to international markets will continue after 2027 despite environmental lobbyists successfully forcing California’s key export coal terminals to close, senior vice-president of Wolverine Fuels Patrick Barrett said.
The Richmond terminal in California’s Bay Area must end coal exports by 31 December 2026, according to a city ordnance, Christian Schaeffer, chief executive of Levin Richmond Terminal, said at the American Coal Council’s Coal Market Trading Strategies conference in Park City, Utah. Coal also was previously exported from the Oakland Bulk Terminal in the Bay Area but was forced to close following pressure from local environmental lobbyists.
The Richmond terminal is allowed to export only 1.028mn t/yr, which is the average of the past three years’ exports from the ports. Wolverine loads about half of its coal from Richmond and half from Stockton, California, typically on Panamax vessels. There has also been pressure from environmental groups to close the Stockton facility, but it has not been successful, Schaeffer said.
Wolverine is “exploring options” to continue exporting Utah coal beyond 2027 from other ports in the region, Barrett said.
Wolverine Fuels’ exports are down from 2018-19 levels because of limited coal availability, Barrett said. The firm exported 1.7mn short tons (1.54mn t) in 2022, down from 3mn st in 2018. Utah coal typically flows to Japan, where it is sought after for its low sulphur and low ash content. Ash disposal costs in Japan are up to 10 times higher than in South Korea, a market participant said.
Coal exports from the San Francisco district from January–June were down by 5.9pc on the year to 643,000t, according to US census data.
Coal from Wolverine-operated mines typically has a sulphur content of less than 0.5pc, and coal for export from the Skyline mine has a calorific value of NAR 6,300 kcal/kg. The firm controls two idle mines that could restart at any moment to supplement exports, Barrett said.
High-calorific-value western US coal is often linked to the API 6 fob Newcastle NAR 6,000 kcal/kg index, while lower-quality coal is frequently linked to the ICI 3 Indonesian coal index, market participants said.
Union Pacific Railroad has the capacity to deliver Utah coal for export by rail to Guaymas in Mexico, but the Nogales border crosspoint is narrow and is open only for limited periods, making it a less attractive option than exporting from Richmond, according to the firm’s director of marketing and sales, Kelli Sweet. The firm can also deliver Utah coal by rail to the Cora barge terminal in Illinois, as well as the Mobile, Alabama; Convent, Louisiana; and Houston, Texas, seaborne export ports.
Elsewhere in California, coal is also exported from Los Angeles. The port shipped 280,000t in the first half of this year, down by 47pc on the year, according to US census data.
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- On August 15, 2023