US Coal Exports
Exports Economic Contributions Report
Oct 16 2017

Japan Eyes Millennium Bulk Terminals to Fulfill Energy Needs

Posted in All News, Asia

More than six years after the Fukushima Nuclear Power Facility disaster, Japan is looking to the United States as a viable option for a fossil fuel partnership to meet its increasing energy demands. According to a 2017 policy paper, a West Coast port would perfectly fill the need while preparing for decreased Indonesian coal exports.

Fortunately for Washington state, one Japanese engineer said his country is interested in the proposed Millennium Bulk Terminals (MBT) export terminal project in Longview as a mutually beneficial opportunity for economic growth and clean coal alternatives.

“The United States is an important trade partner and ally to Japan,” said Wendy Hutchinson, MBT’s Vice President of Government and Public Affairs.  “Millennium’s coal export terminal will play a critical role in ensuring Japan is able to diversify its coal supply, which improves their energy security.”

The coal traveling through the export terminal is a much cleaner alternative that what is burned in Asia, according to the United State Geological Survey (USGS).

“Using a cleaner coal product from the United States will make their state-of-the-art facilities operate with even greater efficiency and assist them in meeting their climate goals,” said Hutchinson. “Powder River Basin coals are lower in mercury and ash than Indonesian coal, and they are well suited for the new Integrated Gasification Combined Cycle (IGCC) Plants that are being built in Fukushima.”

The technology uses high pressure to turn coal into pressurized gas, and then finally into electricity.

According to a 2017 policy paper prepared by Infra Innovations, the United States would be a perfect fit to help fill the Japanese coal needs.

In 2015, Japan was the second largest coal importer in the world, bringing in 211,162 thousand short tonnes, that is, 2,000-pound increments of coal, according to the report. The country accounted for 22 percent of the total import demand in Asia.

Over six years ago, Japan suffered a 9.0 magnitude earthquake and tsunami which triggered the meltdown of the Fukushima Nuclear Power Facility. As a result, only two Japanese nuclear reactors there remained in operation. The local government decided not to restart the reactors, and an October 2011 white paper asked the country to look for alternative energy sources, as nuclear power was responsible for one-third of Japan’s electricity.

Japan has now placed a greater emphasis on oil-fired thermal plants, which require liquefied natural gas and coal, according to the paper.

The country receives the majority of its coal from Indonesia, Australia and Russia. However, Indonesia has indicated it would cut back on international coal shipments to meet growing domestic demands, with exports decreasing steadily until 2020.

Also, Indonesian coal is transitioning from high-quality to low-grade coal, which cannot be used in Japanese boilers designed for higher-grade coal.

The paper added that while the market shifts, the United States is now aligned to help meet the increased demand in Asia.

“If a port along the West Coast of the United States could be opened to coal shipments, there would be sufficient production capacity to replace the decrease in exported coal from Indonesia and satisfy the additional demand from Asia,” the paper states.

The trade balance between Japan and the United States was $37 billion in Japan’s favor for the first half of 2016, according to the paper. Selling American-sourced coal to Japan would help offset the U.S. trade deficit — by $2 billion — assuming 40 million tonnes of western U.S. coal shipped.

“This represents a true win-win situation for both countries, achieving energy security for Japan, economic security for the United States, and reduction of greenhouse gas emissions on a global scale,” the paper states.

Shozo Kaneko agrees that the Fukushima disaster shifted the country’s focus from renewable resources to fossil fuels as the primary source of electricity. He is a fellow of the Japan Society of Mechanical Engineers.

“To stabilize and secure our supply, Japan is highly interested in importing coal from the United States, a trusted ally and reliable trading partner,” he told the Seattle Times in a recent op-ed. “We do not import any appreciable energy resources from the U. S. today. As major trade partners with Washington state, we see the proposed Millennium terminal in Longview as a solution in meeting our energy, national-security and economic-growth needs.”

According to Kaneko, the coal traveling through MBT’s terminal would be “the most suitable fuel” for Japan’s emerging energy options, while contributing to its economy and meeting environmental guidelines.

“The Millennium project brings substantial benefits to Longview and the state of Washington — and it also offers Japan a sound solution to its pressing energy-security challenges,” he added. “Millennium represents a mutually beneficial opportunity to further extend our trade relationship and friendship with Washington state, and encourages people in Fukushima Prefecture with a brighter future.”

Millennium is nearly five years and 8 months into its permitting process. The company received its first permit in July, but had its water quality permit denied earlier this month. Business and labor stakeholders sounded the alarm, calling the move dangerous for future economic development in Washington.

Hutchinson said MBT would appeal the permit denial later this month, and continue fighting to ensure the project breaks ground.

“In the meantime, we continue to pursue our other permits,” she added. “The facility continues to operate and we remain confident that we will be able to achieve our goals to bring more family-wage jobs to Longview and protect the people and the environment by meeting the strict environmental standards of Cowlitz County and Washington State.”

See article here.

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