Coal-shipping plan divides Oakland over health, jobs issues-ILWU Opposes Coal Terminal

Coal-shipping plan divides Oakland over health, jobs issues-ILWU Opposes Coal Terminal
http://www.sfchronicle.com/bayarea/article/Coal-shipping-plan-divides-Oa...
By Rachel SwanSeptember 30, 2015 Updated: September 30, 2015 9:50pm

Oakland’s City Council has until early December to make a costly choice: agree to move millions of tons of potentially lung-damaging coal through the city each year for export, or ban the coal and disrupt — potentially derailing — a major development that promises nearly 12,000 jobs.

Opposition to coal is mounting from public health experts, environmental groups and even some council members. But the company contracted to develop and operate a shipping terminal set to open near the east end of the Bay Bridge in 2018 is threatening to pull out if coal transportation is blocked in Oakland — and that could delay or hinder the $880 million, 366-acre development project.

“I’m quite certain if we’re unable to pursue our business plan with respect to all commodities, including coal, we will not make the investment, no,” said Jerry Bridges, who once ran the Port of Oakland and now heads Terminal Logistics Solutions, the shipping operations company handling the most lucrative portion of the project.

It’s a threat that worries Phil Tagami, who has worked for nearly eight years to develop the huge tract of public land at the long-shuttered Oakland Army Base in West Oakland. The project, currently under construction, is expected to add recycling facilities, a railroad line, maritime support services, and what Tagami describes as a “world-class” export terminal to the barren land. He originally said coal wouldn’t pass through the terminal. But that changed last year, and now Tagami says the City Council has no legal right to prevent him from moving coal by rail through West Oakland to the port.

“We think it’s very important the City Council understands the seriousness of the preemption issue,” said Tagami, explaining why he sent a team of three lawyers to a public hearing about the coal at City Hall on Sept. 22, as well as engineers and lobbyists.

December vote

On Dec. 8, the City Council could vote to allow coal transportation through Oakland, restrict it in some way, or ban it altogether. Last year, before Terminal Logistics Solutions made plans to export coal from the future terminal, the council passed a resolution opposing the transportation of hazardous fuels, including coal, in Oakland.

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Photo: Connor Radnovich, The Chronicle
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Phil Tagami at his company's offices surrounded by reports on the Oakland Army Base project in Oakland, California, on Wednesday, Sept. 23, 2015.
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Phil Tagami at his company's offices surrounded by reports on the Oakland Army Base project in Oakland, California, on Wednesday, Sept. 23, 2015.
Laura Wisland, a senior energy analyst from the Union of Concerned Scientists who spoke at last week’s hearing, warned that the new plan to ship coal would force the council to break that pledge.

Mayor Libby Schaaf has said she opposes transporting coal and crude oil through Oakland.

Now the public has until 4 p.m. Monday to e-mail comments to Douglas Cole, who manages the Army Base Gateway Redevelopment Project for the city, at dcole@oaklandnet.com. City administrators will evaluate those comments — available on the city’s website — and present a status report to the council at the next public hearing on Oct. 20 at City Hall.

Pros and cons

Opponents say that coal shipments — even in sealed rail cars — would spread coal dust, polluting the air in West Oakland and putting residents at greater risk of asthma.

But others say that banning coal is not worth the loss of the entire project, which they expect will bring thousands of unionized construction and shipping jobs to an area that desperately needs them.

Tagami partnered with the city in 2008 to develop the old Army base. About $387 million in public funding is required for the infrastructure, with most coming from the state’s Trade Corridor Improvement Fund. But to get that money, $242 million in matching funds is needed by June 2020. If the terminal operator pulls out, Tagami and the city could lose the most lucrative part of the project and could have trouble coming up with the matching funds.

Photo: Connor Radnovich, The ChroniclePhil Tagami at the site of a development at the Oakland Army Base in Oakland, California, on Wednesday, Sept. 23, 2015.
Even so, Tagami said he will build the terminal and provide his portion of the state grant match — some $45 million — as required by his contract, though he did not specify how he would do that if the current shipping operator pulls out.

Tagami worked on the project for years without planning to ship coal. He even announced in a 2013 newsletter that his company, California Capital & Investment Group, “is publicly on record as having no interest or involvement in the pursuit of coal-related operations at the former Oakland Army Base.”

But he reversed that stance last year after signing a lease with Terminal Logistics Solutions to operate the “Oakland Bulk and Oversized Terminal.” Terminal Logistics Solutions is talking with four counties in Utah that have offered to invest $53 million in the project on the promise that coal mined in Utah could be shipped through Oakland, said Bridges, the company’s chief.

Colorful battle lines

The Sept. 22 hearing drew hundreds of people to City Hall. Supporters of the project wore yellow “I Support Oakland Jobs” T-shirts, while opponents sported red shirts with the slogan “Beyond Coal Exports.” Though many insisted it wasn’t an either-or, “jobs vs. the environment” debate, the battle lines seemed starkly drawn.

“We welcome the terminal, we’re just opposed to the coal,” said Derrick Muhammad, a lawyer representing the International Longshore and Warehouse Union. He said the plan in its current form requires workers to “sell their souls” for jobs.

Muhammad was one of many speakers who commended the overall project, but saw the coal shipping plan as a potential environmental disaster.

Dr. Muntu Davis, director of the Alameda County Public Health Department, said he, too, supports the project — with a prohibition on coal.

He said parts of West Oakland already have “some of the worst health outcomes in our county.”

The project’s supporters were equally passionate, arguing that a coal ban could threaten the entire development and cost thousands of jobs.

“We’re concerned about global warming and greenhouse gases,” said Pastor Gerald Agee of Friendship Christian Center in West Oakland. “But we also have a ‘right-now’ issue with folks that come to our churches that can’t stay in Oakland because they can’t afford housing.”

Agee and others view the new terminal as a way to stave off displacement of longtime residents as wealthy newcomers — among them the ride-booking giant Uber — move into Oakland and cause housing prices to soar. Shipping and construction jobs provide high hourly wages and union benefits, the kind that make staying in Oakland possible, Agee said.

But some City Council members expressed reservations about the plan.

Councilwoman’s concern

“As a West Oakland resident and mother of an asthmatic child, I lived this every day,” said council President Lynette Gibson-McElhaney, adding that she was “deeply concerned” about the potential consequences of shipping a fossil fuel through the city.

Tagami declined to say whether he would try to find another terminal operator. He’s worked on the project for eight years, secured 128 permits, and filled an entire library of his office with 5-inch binders, each containing a weekly report he has submitted to the city.

“I do not know what the future holds,” Tagami said.

Rachel Swan is a San Francisco Chronicle staff writer. E-mail: rswan@sfchronicle.com