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Advancing Utah's Energy Future

Utah invests $53 million in California port for coal, other exports

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Amy Joi O’Donoghue – Deseret News

Millions of tons of Utah coal will have a secure shipping port from a former Army base in Oakland, California, under a $275 million deal being brokered among multiple parties.

Four Utah counties — Sevier, Emery, Carbon and Sanpete — have already secured a $53 million low-interest loan from the state’s Community Impact Fund Board to assure that Utah exports, notably coal, have a guaranteed share of the port’s capacity.

The investment, approved earlier this month, buys Utah exports such as coal, potash, salt and hay cubes 49 percent of the new facility’s capacity, described as 9 million metric tons. The dry bulk port will occupy land owned by Oakland City and provide a more direct West Coast route for the state.

Jeff Holt, a consultant for the counties, told the board members that port space is at a premium and other Western states are looking to secure viable shipping options as well. Wyoming lawmakers, he added, have agreed to spend $1 billion for access being eyed in the Pacific Northwest. In Utah’s case, the money does not buy equity interest but rights of access.

Laura Nelson, director of the state Office of Energy Development, said the investment is a prudent use of money to ensure the state’s coal supply has direct access to international markets.

“We have the resource here, and if we can move it to locations where we can displace low quality coal with our higher quality coal, that is a win-win for economic development and environmental improvements,” she said.

Even as the U.S. demand for coal is ramping down and environmental regulations are bringing increasing pressure on domestic coal-fired power plants, Asian markets are hungry for the energy source.

“If you want to look at some of the fastest growing economies, they are in Asia,” Nelson sad. “Indonesia, Thailand and Vietnam are in the top three in terms of per capita utilization of coal and they are doing that to enhance their quality of life and they are going to continue to do that so they can get affordable power to the masses.” (…)

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