Port cargo dock dream fades with the economy

TheWorldLink - Coos Bay

By Elise Hamner, City Editor
Friday, April 18, 2008 | No comments posted.
COOS BAY — Blame it on the economy.

Jeff Bishop did.

The executive director of the Oregon International Port of Coos Bay told port commissioners Thursday night his staff will postpone its effort to develop a general cargo dock on the North Spit.

Blame it on the closed railroad.

Bishop did.

Usually he talks about opportunity. His lectures have been upbeat, scholarly. He displays PowerPoint presentations about business cycles. He explains the science behind potential industry. He has challenged the tiny port to leverage money from deep-pocketed liquefied natural gas speculators to finance a cargo dock for use by all shippers

Blame it on the National Marine Fisheries Service.

They’re setting the hurdles so high it’s not feasible for the port to pursue projects, Bishop said. It’s becoming a situation where it’s only feasible for LNG because they have lots of money.

The port had piggybacked Project Lofty on Jordan Cove Energy’s LNG facility proposal, as part of the permitting and environmental process. They would have shared a slip for ships.

But in the end, it seems, the link to LNG was the final deal sinker. Thursday, the commission unanimously voted to withdraw the general cargo dock from the joint permit application.

The LNG project will move ahead. The port’s withdrawal won’t affect the size of the proposed slip. It won’t affect land use approvals already OK’d.

Regulatory hammer

The work started several years ago, the port’s deputy executive director, Mike Gaul, explained. Environmental, land use, energy and wildlife agencies at the state and federal levels partnered their staff with port, Jordan Cove and pipeline representatives to work together through the permit process. The goal was cooperation and to make sure the tough questions got answered along the way.

Then earlier this month, Gaul said, the Fisheries Service lobbed a surprise.

For the port’s end of the project, it wanted detailed study on the type of cargo ships that would use the dock, the type of cargo, the number of ships per year, who the customer would be and how exactly the site would be configured. The problem is the port hasn’t signed a deal with any companies to use the cargo dock. And one “roll on, roll off” type company that was flirting with the port, walked away as the railroad embargo stretched into indefinite closure, Bishop said. He wouldn’t say who it was, but did say those types of projects involve wheels.

That wasn’t the only surprise. Last week, NMFS asked the port to impose never-before required rules for ship ballast water filtering — rules not required by any law. Possibilities might include requiring an on-ship shield system or out-of-bay water source for ballast water to prevent ships from sucking up federally protected salmon.

Gaul said when port staff balked at the demand, one agency representative commented that “Someone has to be first.”

It won’t be the Port of Coos Bay, Bishop said. This port would have the only dock on the West Coast with the ballast restriction. Unless the same standards were applied to all ports, it would render Coos Bay noncompetitive.

“The regulatory agencies were making our lives hell,” he said.

For Jordan Cove, such a requirement would equate to another financial hurdle. LNG prospectors can afford it, he added, not a port like Coos Bay.

The bigger question

The wheezing economy has faded the luster on the proposed container terminal project, too. Bishop suggested that project also might be endangered.

Bishop said it will face at least a five-year delay should it happen at all. The concept of moving 2 million containers through Coos Bay still is viable, but the wilting U.S. dollar, the defunct railroad, increasing permit/project costs and increasing capacity at major ports are getting in the way.

Port commissioners were mostly silent throughout the discussions. Even so, Bishop came back to clarify his thoughts three times throughout the night.

The container terminal customer the port refuses to identify still wants the port to pursue a study on digging the lower shipping channel deeper and wider, Bishop said. Port staff urged the commission to move forward, but to push cautiously, with careful watch on environmental issues, any costs to the port and the ailing economy.

“I haven’t seen anything to make me believe the economy is turning around,” he said.