City Accused of Bowing to Political Pressure in Coal-Ban Trial

OAKLAND, Calif. (CN) - Attorneys for a developer fighting to reverse a ban on coal-handling in Oakland suggested in a Tuesday bench trial that city officials conspired to enact the ban to appease their environmental allies.

"It's a big deal for Oakland to alienate the Sierra Club, right?" the developer's attorney Meredith Shaw asked, referring to one of the most well-known environmental groups in the United States. "The Sierra Club can make or break politicians, right?"

Developers of the Oakland Bulk & Oversized Terminal (OBOT) – including Phil Tagami, a friend of Gov. Jerry Brown – want to haul coal by train from nearly 1,000 miles away in Utah and ship it to Asia through the $250 million facility. The terminal is being built on an old army base in West Oakland.

But in June 2016, the Oakland City Council passed two measures prohibiting the storage and handling of coal and petroleum coke at any bulk materials facility in the city after multiple studies found that coal dust blowing off trains can cause asthma or cancer.

The new regulations brought the project to a halt. Tagami sued the following December, claiming the ban violates the Constitution and a 2013 development agreement between OBOT and the city.

Tagami, whose Oakland-based real estate firm California Capital and Investment Group owns OBOT, says the city knew before signing the development agreement that the terminal might handle coal, then caved to political pressure from environmental groups after four Utah counties said they planned to invest $53 million in the terminal to export their coal.

On Tuesday, Tagami's attorneys tried to prove the city pressured its expert, Environmental Science Associates, to produce a report that would "support a coal ban." According to them, the report was based on faulty math and used the wrong standard for estimating the amount of emissions the terminal would create. This led to the conclusion that the terminal would create six tons of emissions a year, 17 times more than it actually would, the attorneys said.

Environmental Science Associates' Victoria Evans, the report's project manager, testified that Oakland rejected her firm's proposal to model the air quality issues the terminal would create, instead directing it to submit a review based on "limited information." She also said the Bay Area Air Quality Management District - the regional agency charged with protecting air quality - told the environmental planning firm that its permitting requirements would reduce terminal emissions by 95 percent.

But Evans denied the city told her team to produce a report justifying a ban. She said the report didn't consider placing covers on rail cars carrying coal or spraying down the coal with a chemical surfactant before a train trip - two measures OBOT proposed to stop coal dust from blowing off trains into West Oakland - because no scientific data shows that either solution works.

Surfactant cracks after 100 miles and allows coal dust to escape, and putting covers on rail cars can cause coal to catch on fire, she added.

"The whole concern is coal outgasses methane, and methane is combustible. With coal dust around as well, there is the opportunity to have smoldering coal piles, and bad things happen," Evans said.

Tagami, who also testified Tuesday, said the terminal would temporarily shut down if it exceeded pollution standards set by the city and the air district, rendering a coal ban unnecessary. But on cross-examination, he acknowledged that coal sitting idle on trains and in conveyors while the terminal gets back into compliance could also catch on fire.

Oakland says it has the right under its development agreement with OBOT to enact health and safety regulations like a coal ban when “substantial evidence of a substantial danger” to public health exists. It says it doesn't want to exacerbate pollution in West Oakland, a community primarily composed of poor people of color that already suffers from some of the worst air quality in California due to its proximity to major freeways and the Port of Oakland.

West Oakland residents die 12.4 years sooner than residents in richer Oakland neighborhoods, and the estimated lifetime potential cancer risk in West Oakland from emissions from the port is about seven times that of the region as a whole, according to an amicus brief filed by California Attorney General Xavier Becerra.

At a Jan. 10 hearing on the parties' opposing motions for summary judgment U.S. District Judge Vince Chhabria suggested he may allow the city to gather additional evidence to satisfy the substantial-evidence standard if he finds it didn't do so the first time.

OBOT's lawyers balked. But Chhabria seemed to support the move again on Tuesday when he asked Evans whether her report would allow him to compare OBOT's emissions with those of similar facilities, and whether such comparisons could be made if they weren't already. She said some comparisons could be made.

Evans will testify about the terminal's health impacts on Wednesday. The trial concludes Friday.

Shaw is with Quinn Emanuel Urquhart & Sullivan in San Francisco. Gregory Aker  with Burke, Williams & Sorensen in Oakland argued for the city.

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