West coast ports jockey to set up facilities to load coal for Pacific

Operators of Western coal mines foresee annual export sales to Pacific Rim countries by the year 2000 of 100 million tons or more. To ship that much coal, however, special loading facilities are necessary, and today no West Coast port is equipped to do the job. So the major questions are: Where and when will those facilities be provided?

The Port of Portland has taken a leading role in advance discussion of coal port requirements, but more recently, strong support has developed for two other Oregon ports, Astoria, at the mouth of the Colombia River, and Coos Bay, 170 miles south of the river.

More than 200 representatives of coal mining companies, railroads, foreign banks, the Army Corps of Engineers, engineering consultant firms, and the three ports looked for answers at the recent Oregon Coal Terminal Planning Workshop here. The idea for the workshop originated with Oregon Gov. Victor Atiyeh.

The potential major customers for coal from Wyoming, Montana, Utah, North Dakota, and Colorado are Taiwan, Japan, and Korea. To a lesser extent, Hong Kong, Malaysia, Singapore, and Thailand are also future buyers of US coal.

This demand for coal reflects the efforts of those countries, like the United States, to lessen their national dependence on oil from the OPEC nations.

At the workshop, Governor Atiyeh pledged the full support of his office and of the State of Oregon in developing coal port facilities. Earlier he had appointed a commission to determine the best site and to work with business leaders. It was made clear that all proposals toward that goal from US industry and abroad were to be coordinated through his office.

Speaking at the workshop, the governor noted that the Port of Portland had said a coal loading facility initially handling 3 to 5 million tons a year can be ready there by 1983, but he said that since Pacific Rim demand by 1985 is expected to be 13 to 15 million tons a year "we obviously need other facilities [at other ports] almost at once."

The governor emphasized that final decisions "as to when each site is developed and comes on line is not a decision that is to be made by government" but will be made "by you as businessmen, because you are the ones who are going to be made to take that risk."

Some idea of the extent of that commitment was presented by A. T. Hjort, president of Swan Wooster Engineering Inc., of Portland. Mr. Hjort said that building a port facility "from scratch" would cost at last $65 million, but it was a figure that some considered could be on the low side. Other costs also would be incurred -- by the railroads carrying coal from mines to the port and by the mining companies in opening new mines and upgrading older mines to meet the demand.

While construction of port facilities is a major problem, other problems must be considered in attempting to meet anticipated Pacific Rim demand. Among those problems are the environmental regulations at state and federal, even local, levels, surrounding coal production; the extent to which the federal government is willing to permit direct foreign investment in coal mine properties, such as Japan has made in Australia; and the need to open up more government acreage in Western states to mining.

Concerning Japanese coal mining investment here, Shigeru Onoda, manager of the Los Angeles Agency of the Industrial Bank of Japan, told the meeting that electric utilities and other enterprises in Japan are quite willing to make US coal mine investments. But if they are not permitted to invest, Japanese companies will still buy American coal, even though the price may be above the price of coal in other countries. That's because Japan does not want to depend on any one source for its coal supply, Mr. Onoda asserted. The Japanese also look to China, Canada, and south Africa, as well as Australia, for coal.

But even as the question of a coal loading facility at an Oregon port is being pursued, across the Columbia River in Washington the Port of Kalama has steadily moved toward its goal of building a coal loading facility.

Late in December the Hawaiian firm of Pacific Resources Inc. announced that an agreement had been signed for construction of a coal loading facility. John Fratt, manager of the Port of Kalama, said at the time that construction would begin in about a year "as soon as the permits are acquired."

It was estimated that construction cost of that facility would be between $50 million and $60 million.It will be on a 230-acre tract recently purchased from the Burlington Northern Railroad, which serves the port.

The ultimate goal of the Kalama Port authorities is to handle 15 million tons of coal a year.