Find Out Which Pacific Northwest State is in for a Long Battle

There's renewed pressure on Oregon's governor to reject a Columbia River coal export facility. The coal industry's export dreams depend on such hubs.

Apr 6, 2014 at 12:40PM

The Sierra Group is taking to the airwaves to oppose a coal transport facility planned for the Columbia River. The goal is to get governor John Kitzhaber to reject the proposal. The U.S. coal industry needs more access to foreign markets if it hopes to grow, so increasingly aggressive opposition groups is bad news.

We would if we could
The coal export poster child is Cloud Peak Energy (NYSE:CLD). It mines exclusively out of the Powder River Basin. That puts it close to the West Coast and, in turn, close to key Asian markets. The company already has a notable presence in South Korea and has been sending test coal to Japan in an attempt to drum up more business.


(Source: CIA)

Speaking about those test runs during his company's fourth quarter conference call, Cloud Peak CEO Colin Marshall said, "The [Japanese] test runs went well and could turn into long-term contracts when West Coast terminal capacity is built." In other words, the company simply can't get its coal out of the country. It's waiting on the Gateway Pacific Terminal, which may be ready in 2018. Cloud Peak has a deal for a third of the port's proposed 46 million ton coal capacity.

Cloud Peak, however, isn't the only miner waiting and hoping. For example, Arch Coal (NYSE:ACI) is backing the Millennium Bulk Terminals project in Washington State. The port's projected 44 million ton capacity would be a big help to the company's export dreams. However, opponents have convinced the state to consider the environmental impact of the products being shipped on the environment in their destination markets. The product is coal and it's going to Asia, that's going to be a hard hurdle to jump.

A valuable asset
This push back is obviously more than just saber rattling. And the more ports that get turned down, the more value there is in existing ports. This helps explain why CONSOL Energy (NYSE:CNX) chose to keep its Baltimore coal handling port when it sold half of it coal mines to Murray Energy.


(Source: National Archives)

CONSOL wanted to keep its lowest cost and best positioned mines, but it also wanted to keep its ability to get that coal into foreign markets. That's particularly true since U.S. coal is increasingly under attack in the utility space as a dirty fuel. Although coal is far from dead, it just isn't a growth industry any more.

Port expansion seems to be going better on the East Coast, where terminals around New Orleans are increasing capacity without much trouble. Foresight Energy is doubling the capacity of its Convent Marine Terminal to 25 million tons. The new Burnside Terminal recently opened for business. And United Bulk Terminals is expanding even though its shipment volume was flat last year.

That's good news for East Coast miners like Alliance Resource Partners (NASDAQ:ARLP), which continues to post year after year of record results. (Last year was number 13 and management fully expects this year be number 14.) However, The East Coast is further away from the growing Asian demand that's driving the West Coast's port expansion efforts. That means higher shipping rates, which makes East Coast coal less competitive in Asia.

To be fair, Alliance will continue to prosper as long as its Illinois Basin Coal continues to gain market share from other regions. However, it's gaining a bigger piece of a largely static pie, eventually exporting more coal will be important for its growth, too.

Tipping point
One coal terminal won't make or break the U.S. coal industry's export dreams. However, if that one terminal is the tipping point that leads to a string of rejections a single rejection could turn into a coal industry nightmare. If you are watching the coal space, this is one issue you need to keep an eye on. It's hard to tell which way it will go, but make sure the impact of export capacity constrains, like the one at Cloud Peak, don't blindside you.

Here's another industry that could see push back, but that will be huge just the same...
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Alliance Resource Partners, L.P.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers