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Millennium Coal Terminal Backers Appeal State’s Denial Of Aquatic Lands Lease

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Mead Gruver, File
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AP Photo
A Jan. 2016 file photo of the Belle Ayr Mine near Gillette, a northeastern Wyoming coal town where the owner has filed for Chapter 11 bankruptcy. Coal’s been hit hard by bankruptcies, new pollution rules and the decline of a once-promising export market.";

Plans to build North America’s largest coal export terminal in Southwest Washington may be moving forward. Project backers have filed an appeal, challenging the state’s denial last year of a lease. But questions remain about the financial viability of the project.  

The developers of the terminal in Longview are challenging the state Department of Natural Resources’ decision not to sublease state aquatic lands to them, saying it infringes on their property rights.

In their appeal, filed in Cowlitz County Superior Court, attorneys for Millennium Bulk Terminals and Northwest Alloys also dispute DNR’s claim that they didn’t provide adequate information about Millennium’s financial standing. In statements, company spokesmen said they want to work with DNR to reach a solution and bring family-wage jobs to Longview.  

DNR spokesman Joe Smilie declined to comment on the pending legislation and said the department is still reviewing how to move forward. But even if some kind of compromise is reached, financial analysts doubt the long-term viability of the project, because coal prices have plummeted.

“You saw a little bit of a mini-bump in international coal markets last fall, but those prices have come right back down, because of China’s policy to try to boost production domestically and squeeze out exports,” said Clark Williams-Derry with the Sightline Institute in Seattle. As director of energy finance, he has been watching these markets carefully.  

He says that bump in prices came in the wake of the bankruptcies of three major U.S. coal companies over the past 18 months, including Arch Coal, which was a main backer of the Millennium project. All three had made big bets on exporting coal to China, inspired by a peak in prices in 2011, but markets collapsed from 2011 to 2016.

Williams-Derry says the Millennium terminal is now backed largely by private equity investors who will continue to gamble on the prospect of rising coal prices, but he’s skeptical of the developers’ vision for bringing a world-class port to Longview.   

Bellamy Pailthorp covers the environment beat for KNKX, where she has worked since 1999. From 2000-2012, she covered the business and labor beat. Bellamy has a deep interest in Indigenous affairs and the Salish Sea. She has a masters in journalism from Columbia University.
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