No $20M bailout or Oakland coal port
Special session fails to commit cash for bankrupt terminal
By Robert Stevens
A play by Sanpete and three other coal counties to inject $20 million into a bankrupt California coal port project didn’t get the support it needed to be introduced during last month’s special session of the Utah legislature.
Despite letters filed in Kentucky Bankruptcy Court by county commissioners from Sanpete, Carbon, Emery and Sevier counties committing to secure funding to help the port’s developers, Insight Terminal Solutions (ITS), satisfy their creditors and retain control of the project, a bill to make it happen was never introduced.
The $20 million referenced in the four counties’ commitment letters was to come from a special $53 million fund created by the Utah legislature in 2016 to help fund the $250 million coal port project, which is being developed on the Port of Oakland at a former Army base.
The money in the special $53 million fund comes from the Utah Permanent Community Impact (CIB) board, which takes mineral lease fees and distributes them to the communities impacted by mineral extraction.
Unable to get the $53 million into ITS’ hands quickly enough to stave off their main creditor, Autumn Wind Lending, the plan was for the legislature to rush the $20 million through, but the funding effort was met with large opposition from a Utah coalition of public interest and environmental activist, and never even saw introduction despite ITS lawyers telling the Kentucky bankruptcy court it would happen.
But during the special session, the topic of the $53 million fund came up, and Rep. Brian King (D) made a motion for the Executive Appropriations Committee to pull the plug on the $53 million and divert the money back to the rural communities it was intended to benefit.
King said he was concerned about the possibility that money would eventually still become a bailout for the bankrupt port developers, instead of going to rural communities for local projects such as economic development, infrastructure and community improvements.
King wanted to repurpose the fund to also divert it towards educational needs and healthcare, such as school nurses or PPE.
Senate Majority Leader Evan Vickers, R-Cedar City voiced opposition to King’s motion, saying the state should not pull back the $53 million fund created to invest in the Oakland Coal Port project.
Ultimately King’s motion didn’t pass and the $53 million remains in the fund created to help make the port happen. It remains to be seen if the Kentucky bankruptcy judge will hand over control of the project to Autumn Wind, or if the $53 million will remain pledged to the project by the four Utah counties if that happens.
Autumn Wind has made no announcements about plans for the project should they be granted control; but if it does happen and Sanpete and the other three counties are able to negotiate a similar deal to export Utah coal through the port once finished, the local coal industry could stand to benefit plenty from such an arrangement.
With coal futures continuing to drop and the price of domestic coal lower than ever, finding a place to export Utah coal to countries could prop up the struggling industry. Exports to Asia are seen as the best bet by coal giant’s like Wolverine Fuels, who is by far the biggest coal producer in Utah, but without a port to export through such as the Oakland port project, that coal has no place to go.