By John Stark
The Friday, Dec. 7 accident at the Westshore Terminal coal pier in British Columbia got just a short mention in Saturday’s newspaper and the Friday online edition. I’m sure many of you wanted more.
Here’s an update from The Maritime Executive, noting that one of the berths at the terminal, just north of the U.S. border, remains out of commission as of Monday, Dec. 10. The report says there is still no explanation for the accident, in which a coal ship apparently crashed through the conveyer belt that carries coal to the loading equipment and spilled about 30 tons of coal into the sea.
Here’s a report and aerial photo from Metro Vancouver. This report indicates that the collision and spill have stirred up some serious misgivings about plans to expand the terminal.
Here’s a lengthy report about opposition to coal exports in British Columbia. It appeared in the Maple Ridge News before last week’s mishap.
Expansion of the Canadian coal terminal could be significant to Bellingham and Whatcom County, since U.S. coal exported through Westshore would likely use BNSF Railway Co. tracks through western Washington and Bellingham to get there — as some coal trains are already doing. This report also details plans to expand coal export capacity in Canada, and it appears as though those plans were not slated for extensive regulatory review at the time this report was written.
Some proponents of the Gateway Pacific Terminal project proposed for Whatcom County’s Cherry Point have argued that if a local terminal is not built, the coal will still be shipped through Bellingham en route to potentially-expandable Canadian terminals and Chinese steam plants.
But opponents contend that the potential increase in coal train traffic through Bellingham to Canada is nowhere near the 18 trains per day (loaded and empty) that would be generated by Gateway Pacific at full capacity.
Here’s a link to the Communitywise Bellingham report on that issue.
In any event, Westshore also handles Canadian coal that gets to the terminal via Canadian rail lines. Here’s one example–the coal sources in this deal appear to be Canadian. (report from NASDAQ)
The recent partial rebound of sales tax revenue has helped increase the Bellingham-Whatcom Public Facilities District’s comfort level on the repayment of bonds that helped finance the Whatcom Museum and improvements to the Mount Baker Theatre.
But at a Feb. 2 meeting of the PFD board, City Finance Director John Carter reminded board members that in about 2020, there’s a chance that the revenue from the district’s state sales tax rebate will fall short of what is needed to cover the payments on the $19 million in bonds that paid for the PFD’s projects.
That’s because the district’s borrowing was based on the assumption of slow but steady growth in sales tax revenue–an assumption that seemed conservative at the time, based on what had been happening for many years. Then the real estate bust triggered a Great Recession and blew a big hole in that revenue. That makes it likely that the revenue levels that had been expected in future years won’t be reached.
On the board’s agenda was a resolution to ask the state legislature to extend the sales tax rebate for all public facilities districts in the state for an additional 15 years. Extending the rebate would allow the districts to refinance their bonds at longer terms, reducing the amount of money needed to service those bonds each year. Under current law, a public facilities district can collect the sales tax rebate of 0.033 percent for 25 years. That means the local district will cease getting the state revenue in 2027. (note: This rebate comes from sales tax the state would be collecting here anyhow. It does not increase the local sales tax.)
City Planning Department staffer Tara Sundin said the Spokane district had drafted the resolution and was circulating it across the state.
Board member Dean Brett said he didn’t like the idea. He noted that the state is struggling to cover basic costs of public education, highways and social services. He argued that those needs were more important than the financial woes of some public facilities districts. The rest of the board quickly agreed, and no vote was taken on the resolution.
Brett also noted that the financial condition of public facilities districts varies widely. Worst case: Wenatchee, where a district with a smaller tax base than Whatcom County took on a far bigger debt burden ($42 million) that was supposed to cover both the construction costs and the operating costs of an ice arena and events center. The Wenatchee bonds are headed for default, and the arena may be headed for bankruptcy.
Here, the district is responsible for about $19 million in bond debt, but is not on the hook for operating costs of the theater or the museum.
If the district’s revenues ever do fall short of what is needed to service the bonds, the city of Bellingham is responsible to make up the shortfall. That probably means a hit to general fund revenues that pay for police, fire, parks, library etc.
Will that ever happen? Probably not. But the last few years have taught us how hard it is to predict things like tax revenues–especially in the future.
The current uptick in sales tax revenue is partly driven by an upsurge in Canadian shopping. That shopping is sensitive to uncontrollable factors like the exchange rate, Canadian taxation policies, and border security measures.
State Rep. Jeff Morris, 40th District Democrat, has emailed us his thoughts on the U.S.-Canada border security deal announced Wednesday, Dec. 7.
“Today’s down economy has forced us to look for new and innovative ways to create jobs and increase economic growth. When discussing strategies for increasing trade, almost no one thinks of the most obvious trading relationship poised for the most growth in the short term: the U.S. – Canada market.
“Consider the following facts: More than $1.6 billion in goods and services, as well as 300,000 people cross the Canadian/U.S. border every day – that’s over a million dollars a minute. More than 8 million U.S. jobs depend on trade with Canada, with over 360,000 jobs in the five northwest states alone. Canada is the most important foreign export destination for 34 U.S. states, and Canada buys more goods and services from the United States than Germany and China combined. Finally, in 2010 the increase in exports to Canada alone was greater than all U.S. trade with Brazil, double all U.S. trade with India, and triple all U.S. trade with Russia.
“These numbers point to an excellent opportunity to look to our neighbor to the North to increase jobs and enhance our economic recovery. In February 2011, President Obama and Canada’s Prime Minister Stephen Harper issued a joint declaration on border management and regulatory cooperation. Both leaders recognize the interdependence of our economies and the need to work together to improve trade and enhance security. Simple regulatory barriers often play a role in discouraging companies from venturing north.
“A basic example of a specific regulatory barrier is the fact that the U.S. and Canada have different standards on gas tank sizes in automobiles. This is troubling on many fronts, especially since a car is often shipped across the border as many as eight times during the manufacturing process. While this is only one of many, it illustrates the need for a process to address these types of issues. Harmonizing specific regulatory standards makes sense in that it will reduce costs and also help open up the market to products that have been limited to domestic markets in the past.
“The Beyond the Border and Regulatory Cooperation Council Action Plan was recently released to begin to take concrete steps to reduce some of these inconsistencies between our two nations. The joint action plan was developed through a coordinated consultative process and is intended to produce specific outcomes and timelines to improve border security and enhance economic cooperation by reducing regulatory irritants that hinder trade. It outlines specific steps the U.S. and Canada are working on to better partner in trade, provide better security in a risk based approach, and make it easier for legitimate goods and travel to take place between our two countries.
“The Action Plan lays out a structure with responsibilities and timelines for success. It is a beginning, not an end, and it will require leadership on both sides of the border to implement innovative solutions that challenge the status quo. It also serves as a much needed reminder that we must work collaboratively with stakeholders to build solutions for the future that make all of our businesses more competitive in the global marketplace. I applaud the leadership of President Obama and Prime Minister Harper and look forward to see many innovative solutions designed, built, and implemented here in the Pacific Northwest.”
Canadian media outlets are reporting that on Wednesday, President Barack Obama and his Canadian counterpart, Prime Minister Stephen Harper, will announce a new border security pact that is bound to have repercussions for Whatcom County.
Will those repercussions be positive, negative or both? We may have to wait and see.
A key feature: Under the terms of this deal, both countries will get a handle on who is leaving, as well as who is entering.
In the past, some security-minded politicians in Washington, D.C. have suggested that there should be some kind of checkout system at U.S. border crossings. In other words, Canadian shoppers would be asked to check out with U.S. authorities on their way home, as well as check in when they head south.
That idea didn’t strike anyone as conducive to cross-border commerce.
The pending new deal should enable both countries to get information on who is leaving, without setting up their own cumbersome exit-check systems. Instead, the Canadians themselves will give Americans their data on who has crossed the border from Canada into the United States, and the US will do the same for Canada.
Some months ago, the U.S. and Canadian governments committed to hammering out a new perimeter security system by September. September is almost here, and many Canadians are wondering if U.S. security concerns will be allowed to trump Canadian national sovereignty and personal privacy.
The concept sounds like a good one: Set up a robust, mutually satisfactory security system around the perimeter of the U.S. and Canada, and take other steps to enable both countries to allow trade and tourism to flow back and forth across their shared border without allowing security measures to choke off that mutually-beneficial traffic.
But synchronizing the two nations’ security systems could involve steps that would be controversial on both sides of the border. As is typical, the Canadian press and public is paying a lot of attention to this binational issue, but it is causing scarcely a ripple in the U.S. So far.
the Toronto Star takes a moderate stance.
via Business Week, a U.S. official says the initial focus of the binational deal will be on regulations affecting certain kinds of exports and imports that are different in the two countries, for no apparent reason. Conforming to two different sets of regulations can be a headache in the affected industries.
In British Columbia, work is already under way on the Roberts Bank Rail Corridor, an enormous project to build railroad overpasses to relieve traffic conflicts on railroad lines leading to the coal terminal
The partnership of federal, provincial and municipal governments are joining with BNSF and Canadian railroads to pour more than $300 million into nine new overpasses along a rail line that now carries 18 trains per day but could have twice that many within 10 years. It appears that governments (taxpayers) will pay the lion’s share, but I’m trying to clarify the railroads’ level of investment and will get back to you when and if that happens.
While people who live along the B.C. rail lines are unhappy with the train noise and traffic disruption, they don’t necessarily like the overpasses either.
Here is a February report from the Langley Times, courtesy of Jeff Margolis, the proprietor of Everybody’s Store in Acme who takes an avid interest in transportation issues.
Among other things, the Langley residents report significant coal dust problems.
Alan Bersin, head of US Customs and Border Patrol, has told a Senate subcommittee that the Canadian border is “the more significant threat” of the two national borders.
CBC reports that Bersin’s Tuesday, May 17 testimony came in response to a Texas Senator’s complaint that the northern border seemed to be getting too much attention despite the far higher number of arrests and drug seizures on the border with Mexico.
Trains headed for SSA Marine’s proposed new shipping terminal at Cherry Point would get there via Bellingham, not the South Fork Valley, a Burlington Northern & Santa Fe Railway Co. spokeswoman said Thursday, May 12.
Mayor Dan Pike and other city residents had suggested that trains full of Rocky Mountain coal or other cargoes could bypass Bellingham and reach the Gateway Pacific Terminal site by way of the South Fork line. That would require routing the trains over existing track along Highway 9 to the border at Sumas and then through Canada, or the construction of a new rail link west from Lynden to the existing main line at Custer.
Suann Lundsberg, in BNSF’s Fort Worth office, said neither alternative to Bellingham appears practical to railway officials.
BNSF executives came to Bellingham Tuesday, May 10 to discuss these issues with Mayor Dan Pike, his reelection challenger Kelli Linville, and County Executive Pete Kremen in separate meetings. In later interviews, all three described the meeting in similar terms.
Pike, Linville and Kremen all agree that the impact of Bellingham rail traffic needs to be studied as part of the environmental impact statement process. Clayton Petree, another Pike challenger who was not on BNSF’s itinerary, says the same.
I’ll have a full report on our website later, as well as in the Friday print edition.
It was also notable, at least to me, that my phone call to BNSF got a prompt response from the spokeswoman in Fort Worth. The railroad seems to be interested in raising its public accessibility just a bit.
Also notable: a call to me from a representative in Everett’s city hall. They apparently are scrambling to find out what Gateway Pacific rail traffic would mean for them.
Saw this on Facebook via Mark Lowry, president of the Northwest Washington Central Labor Council: The Neptune Terminals in North Vancouver are reporting big upswings in export of coal and potash to Asia, the Vancouver Courier reports.
It should be noted that the quantities mentioned in this article are well below the potential 50 million tons of product that SSA Marine’s proposed Gateway Pacific Terminal could ship from Cherry Point, if it reaches maximum size now envisioned.
Monday, May 2 is election day north of the border.
In this brief editorial comment from the Providence (R.I) Journal, the editorialist suggests that Canada has a smooth and stable economy and government, and that will likely continue no matter who emerges as Prime Minister in the multi-party parliamentary election.
Incumbent Prime Minister Stephen Harper begs to differ. Polls have shown a late surge toward the NDP that could put that party’s chief, Jack Layton, in the PM’s chair at the head of a coalition government. While that may not be likely, the NDP does appear poised to overtake the Liberal Party to become the major opposition party after the election.
In today’s campaign coverage from the Globe & Mail, Harper is warning his countrymen that if the NDP is in power, their taxes will rise, they will pay more for gas, and Canada’s vital trade relationship with the U.S. will be disrupted.
But Layton’s admirers say his apparent appeal in French-speaking Quebec could help maintain national unity.
It should go without saying that any major political shift in Canada will have eventual reverberations for the Whatcom County economy.
It remains to be seen whether the executives of Canada and the U.S. can make good on their pledge to create some kind of binational security perimeter that manages to increase security while smoothing the flow of trade and tourism between the two countries.
In Canada, many people worry that this kind of deal will compromise both Canadian sovereignty and the civil liberties of Canadians. On canada.com, Sukanya Pillay of the Canadian Civil Liberties Association discusses those issues.
In this country, any measures to loosen northern border bottlenecks will continue to bump up against the widespread belief that all U.S. borders can and should be in lockdown mode.
Via North Sound Baykeeper Matt Krogh: Here is a link to an article in the Longview Daily News about coal dust at the big Westshore coal terminal in Tsawwassen, B.C.
Among other things, boaters at the nearby Point Roberts Marina say they get coal dust on their boats. This is apparently the result of nearby coal terminal operations, not passing rail cars.
Terminal operators say they do their best to keep dust down, and some suggest that much of the dust that people complain about is just road and diesel soot that you get anywhere. But operators also admit that the operation does produce dust.
Longview is interested because a coal terminal is proposed for that city, although it would apparently be much smaller than the one in B.C., or the Gateway Pacific terminal proposed for Whatcom County at Cherry Point.
Note that the article says the Tsawwassen port gets 600 rail cars per day to serve its 29 million-ton-per-year capacity. Gateway Pacific would be about the same size, with proponents now estimating 25 million tons per year.
In a story that will be published in the next few days, I take a quick look at the potential impact of increased rail traffic through Bellingham and Whatcom County, south of Cherry Point, if SSA Marine succeeds in establishing a new marine cargo terminal on vacant industrial land south of the BP Cherry Point crude oil dock.
It’s early yet. If all goes as SSA hopes, the permitting process will take two years, and construction will take two more years. During that permitting process, the impact of rail traffic will be studied, as will other sensitive issues such as the shrinking population of Cherry Point herring.
As of now, the terminal is projected to have a capacity of 25 million tons of (?) per year, and a terminal that size would need five or six trains a day to keep it supplied. The only way to get a train to Cherry Point, other than via Canada, is through Bellingham–and Ferndale.
Those trains would come back south on the same route after unloading.
Existing train traffic is said to be 24 to 28 trains per day.
As of now, coal looks like the most probable mainstay of such a facility, but since the terminal isn’t in business as of now, it’s possible that some other cargo could rise to prominence by the time the facility is built–if it is. SSA’s Bob Watters says construction will take two years, after the two-year permitting process that SSA plans to start this March.
I fully expect to be covering this project until I retire, unless I’m transferred to prep sports.
Many of you have noticed that we already have coal trains rumbling through town, on their way to the Deltaport terminal at Roberts Bank, B.C. I’m wondering if those of you who live close to the tracks have had any issues with coal dust. Give me a call at 715-2274 or email at firstname.lastname@example.org if you want to talk about it.
Footnote: SSA apparently has friends in high places. Aside from the fact that Goldman Sachs is a major investor in its parent firm, U.S. Sen. Maria Cantwell lobbied Chinese officials on behalf of SSA’s proposal to build a terminal in China, according to a State Department cable obtained by the New York Times via Wikileaks.
I found that tidbit via Longshore & Shipping News.
Earlier today I discovered the Bilateralist blog, authored by the Washington correspondent for Maclean’s magazine, Luiza Ch. Savage.
She compiles lots of news reports affecting the two nations and the border that divides and unites them. Today she highlights Homeland Security Secretary Janet Napolitano’s congressional testimony reacting to a recent GAO report saying that her agency has “operational control” over only 32 of the 4,000 miles of border. That prompted a lot of heavy breathing on Capitol Hill.
Napolitano basically says it isn’t as bad as all that, and the lack of “operational control” in other areas doesn’t mean utter lawlessness.
UPDATE: Harper and Obama have announced the outline of a two-nation trade and security agreement that could have significant impact in Whatcom County. As of now, nobody at the Associated Press appears to consider this to be of any significance whatsoever. We have no wire stories to give you as of now.
But thanks to the miracle of the internet, we CAN link you to the Toronto Globe and Mail, which is taking all this VERY seriously.
Personally I remain skeptical that we’ll see any meaningful easing of cross-border security any time soon.
Canadian Prime Minister Stephen Harper will be in Washington, D.C. today to discuss security issues with President Barack Obama, the Canadian Press reports.
Based on this latest dispatch, the two North American leaders are expected to announce hopes for a deal before the end of the year, rather than an actual deal, today.
Harper’s Canadian critics in the Liberal Party have charged him with selling out Canadian sovereignty in order to assuage U.S. fears about potential terrorists getting into the U.S. via Canada.
But if the two countries succeed in reaching a perimeter security deal, the improved flow of tourism and trade over the border could pay off in Whatcom County.