CA Governor Blocks Money for New Coal Ports

SACRAMENTO, Calif. (CN) — California Gov. Jerry Brown signed legislation Friday banning state transportation funding for new bulk coal-shipping terminals, and promised additional measures to limit coal usage and reduce pollution.

The law comes after a tense battle between real estate developers and environmentalists that played out in June when the Oakland City Council banned proposed coal shipments through a new bulk-export terminal at the former Oakland Army Base.

The council was concerned that coal dust would hurt residents in West Oakland, where asthma and cardiovascular illness from industrial pollution are rampant.

"The city of Oakland took an important step recently by thoroughly documenting the health and safety risks and climate impacts of coal and specifically banning its shipment through the city," Brown said in a letter to lawmakers on Friday.

State Sen. Loni Hancock, D-Oakland, introduced the bill in February in a bid to halt the proposed coal facility, which would have been part of a $250 million deepwater bulk-export terminal being constructed at the base.

The city, however, said the facility will bring new jobs to economically depressed West Oakland.

Proposed in 2015 by Oakland developer Phil Tagami, the coal facility would have been capable of exporting up to 10 million tons of coal annually. Right now, California exports less than 3 million tons annually, according to a press release from Hancock's office.

But the project is at a standstill after the city council voted to ban coal at a raucous council meeting that saw several protestors removed for disorderly conduct.

Tagami threatened to sue the city following the vote, but that no longer seems likely. Coal prices are falling and Bowie Resource Partners, the Kentucky coal company that had been gunning to build the terminal, announced last week that it was cancelling its initial public offering due to unfavorable market conditions.

Four Utah counties also withdrew their application last week to invest $53 million in public funds in the Oakland coal terminal to revitalize their own economies.

But if Tagami can get around those hurdles, the new measure won't hurt his project, since it leaves funding intact for existing coal projects.

Tagami spokesman Larry Kamer declined to comment on the new legislation Friday.

"When I introduced this measure, many people thought a coal export terminal in West Oakland was a done deal," Hancock said in a statement. "Today, people can breathe easier knowing that beginning in January no coal-related projects will receive state funding."

Although Gov. Brown, a former Oakland mayor, styles himself as tough on climate change, he neglected to weigh in on the proposed terminal in the city he still calls his hometown.

According to Oakland Magazine, the governor owns a substantial stake in an Oakland-based subsidiary of Tagami's California Capital & Investment Group, which is developing the army base site.

Brown nonetheless urged lawmakers in his signing statement to ban coal shipments through all California ports.

"I believe action on multiple fronts will be necessary to transition away from coal," Brown said. "I will continue to work with the Legislature on further actions to curb coal and combat climate change."

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