Judge Overturns Oakland Coal Ban on New Facility

SAN FRANCISCO (CN) – A federal judge on Tuesday struck down the city of Oakland’s ban on coal shipments from a new marine terminal being built at the foot of the San Francisco Bay Bridge, finding inadequate evidence that coal operations would increase pollution.

U.S. District Judge Vince Chhabria found that the Oakland City Council’s 2016 ban was invalid because it violated a development agreement between the city and the terminal’s developers, which stated that Oakland could only regulate terminal operations if there was “substantial evidence” of a “substantial danger” to health or safety.

Citing its environmental consultant’s failure to study proposed pollution-mitigation measures, Chhabria remained unconvinced that the city relied on substantial evidence to pass a ban on coal or petroleum coke at the terminal, known as the Oakland Bulk and Oversized Terminal (OBOT), or demonstrated substantial danger from coal operations there.

“Given the record before it, the City Council was not even equipped to meaningfully guess how well these controls would mitigate emissions,” Chhabria wrote in his 37-page ruling. “This created a sizable gap in the record, and a major flaw in the City Council’s ultimate conclusion that OBOT’s emissions would pose a substantial health or safety danger.”

OBOT’s developers – including Phil Tagami, a friend of Governor Jerry Brown – want to haul coal and petroleum coke 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 along the shore in West Oakland and would be capable of exporting up to 10 million tons of coal annually, making it the largest coal export terminal on the West Coast.

But the Oakland City Council passed an ordinance prohibiting coal operations at bulk-material facilities in the city – and a resolution applying the ban to OBOT – after multiple studies found that coal dust blowing off trains can cause asthma or cancer, and that emissions from the terminal would worsen West Oakland’s already-poor air quality.

The new regulations brought the project to a halt. Tagami sued in December 2016 to reverse the ban, claiming it violated a development agreement the city signed in 2013.

Tagami did not return an email Tuesday seeking comment.

At a bench trial this past January, Tagami’s lawyers at Quinn Emanuel Urquhart & Sullivan argued that Oakland pressured consulting firm Environmental Science Associates (ESA) to produce a report that would “support a coal ban.” They said the report – on which the City Council relied to pass the ban – was based on faulty math and used the wrong input for estimating the amount of emissions the terminal would produce.

This led to the conclusion that the terminal would produce 67 pounds of particulate matter 2.5 – a type of air pollution that penetrates deep into the body – each day, 17 times more than it actually would, Robert Feldman, one of Tagami’s lawyers told Chhabria at the trial.

Chhabria sided with Feldman, writing Tuesday that ESA’s estimates “were almost completely unreliable,” and that “the record is riddled with inaccuracies, major evidentiary gaps, erroneous assumptions, and faulty analyses, to the point that no reliable conclusion about health or safety dangers could be drawn from it.”

ESA had estimated that OBOT’s emissions would exceed state air quality standards for particulate matter 2.5, which the City Council concluded was substantial evidence of substantial danger to health. However, Chhabria pointed out Tuesday that ESA arrived at its estimates by assuming OBOT would take no measures to control emissions – such as placing covers on rail cars carrying coal or spraying the coal with a chemical surfactant to keep coal dust from blowing off uncovered cars – despite OBOT committing to those measures.

At trial, ESA’s Victoria Evans, the report’s project manager, testified that her team didn’t consider covers and surfactants because no scientific data shows they work.

“This was a big mistake,” Chhabria concluded in Tuesday’s ruling, despite Evans’ testimony that covering rail cars can cause coal to catch fire, and that surfactant cracks after 100 miles and allows coal dust to escape. “The lack of existing data about the effectiveness of a new technology like rail car covers is not enough of a reason to assume them away, particularly when the developers have committed to using them.”

“The City of Oakland banned the handling and storage of coal and coke at OBOT’s proposed shipping terminal pursuant to its police powers to regulate threats to health and safety,” Oakland City Attorney Chief of Staff Alex Katz said in a statement. “The City takes its responsibility to protect the health and safety of residents very seriously, particularly children whose health will be directly impacted by storage, handling and shipping of coal and coke through our neighborhoods.  The Court’s ruling is disappointing.  We are reviewing the ruling and will discuss our options with the City Council.”

In a phone call, Feldman called Chhabria’s ruling “thorough and prompt.”

Primarily composed of low-income people of color, West Oakland 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 wealthier Oakland neighborhoods, and the estimated lifetime potential cancer risk in West Oakland from port emissions is about seven times that of the region as a whole, according to an amicus brief filed by California Attorney General Xavier Becerra.

Despite state air quality standards capping particulate matter 2.5 to 12 micrograms per cubic meter per year, Oakland argued at trial that no amount of particulate matter 2.5 was safe, especially for West Oakland residents.

But Chhabria noted that other pollution sources nearby, such as the port, the Bay Bridge toll plaza, and the iron foundry, are exempt from the ban.

“The city says that any emissions pose a substantial danger even though it continues to allow the East Bay Municipal Utility District and iron foundry to consume coal and coke – and emit particulate matter,” he wrote. “Granted, these facilities receive and use less coal and coke than the shipping terminal would. But if any emissions are a substantial danger, how does the city justify allowing emissions from these sources?”

He added, “The utility district and iron foundry are not alone. All kinds of activities emit particulate matter, from truck traffic to office park development. Without comparing these activities’ impact on air quality to OBOT’s, it’s difficult to grasp how the city decides which activities pose a substantial danger to health and which do not.”

Chhabria refrained from overturning the ordinance that bans coal-handling within the city, leaving Oakland the option to enact new regulations on the terminal so long as it complies with the development agreement.

Lora Jo Foo with No Coal in Oakland, a group that opposes coal-handling in Oakland, was circumspect in response to an emailed question about whether the city would pursue new regulations. But she pointed out that Chhabria had acknowledged that “the city could try again to adopt a regulation for OBOT and do it properly the second time around.”

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