The twists and turns of the fight over the proposed Oakland Bulk and Oversized Terminal, and the developer’s plan to use it to export coal, are far from over. This despite a fight that extends back at least a decade.
A proposal to export coal through Oakland, as reported by environmental organization Earthjustice, was revealed by an April 2015 story in a small Utah newspaper, the Richfield Reaper, which reported that four Utah coal-producing counties were combining to invest in a “new West Coast export terminal.” That this was OBOT was confirmed by a memo obtained through a public record request.
That memo stated: “We’ve had an unfortunate article appear on the terminal project…the script was to downplay coal…[Terminal developer] Phil Tagami had been pleased at the low profile that was bumping along to date on the terminal and it looked for a few days like it would just roll into production with no serious discussion…” (Source: Earthjustice, June 7, 2016)
The canary was now out of the coal mine.
In the years since, although Tagami has remained the public developer face, project funding has ping-ponged among multiple hedge funds and shell companies, currently represented by Insight Terminal Solutions, LLC, owned by hedge fund operator Jon Brooks. In 2015, the city of Oakland was presented with evidence that a completed OBOT would be used to ship coal. The city passed an ordinance preventing this, and was sued by OBOT’s developers, who prevailed in court, including in a decision by the Ninth Circuit Court of Appeals.
Notably, Judge Vince Chhabria was not convinced the city had proved its claims of substantial health harms to residents of West Oakland. Since that time, various entities connected to OBOT have continued to battle the city, with the most recent decisions being a mixed bag.
On Jan. 23, 2024, Judge Noël Wise issued a judgment rescinding the city’s 2018 termination of Tagami’s lease. However, the court declined to approve either of Tagami’s proposed remedies, $160 million in damages, or reinstating his lease and awarding him $20 million in damages. Instead, he was offered damages of $318,000 or reinstatement of the lease without any money. Tagami chose reinstatement. The city has appealed the decision, thus guaranteeing legal proceedings continue.
Out of the bankruptcy it declared in 2019, according to media representative Gregory McConnell, CEO of The McConnell Group, ITS filed suit on March 11 against the city of Oakland, claiming losses of over $1 billion stemming from the lease termination.
According to McConnell, “The prior owner of ITS was primarily interested in coal. The current owners offered to settle and forgo shipping coal and they repeated their willingness to do so on multiple occasions…the city rejected settlement offers.
“The case in federal court ended with a decision that the city could not ban coal shipments. The city’s case in state court ended with a decision that the city breached their contract with OBOT…These two cases clarified that the terminal owners had the right to build a terminal and the city had no right to ban coal shipments from the terminal… ITS is following the law and protecting its interests,” McConnell continued.
ITS issued an “Open Letter to the Citizens of Oakland” on May 4, 2023, published on BusinessWire, once again accusing the city of bad faith in refusing a settlement, and stating: “The Terminal will be prohibited from shipping any coal,” and then going on to say, “The City will have the right to cancel the lease immediately upon a violation and charge a fee of $5 million for every train car of coal unloaded. This prohibition will run with the land and be binding upon us and all subsequent owners/operators.”
Asked why violation fees would be necessary if no coal was being shipped, McConnell responded, “The city insisted they wanted more protection should ITS renege and ship coal after agreeing not to do so. ITS then offered severe financial penalties against itself as a deterrent to violation of the proposed settlement agreement.”
Another view was advanced by activist group No Coal In Oakland. “Settlement talks between Tagami and the City broke down in 2022 over Tagami’s refusal to provide an iron-clad agreement that coal would not ship through the terminal,” states its website.
Should the city of Oakland lose the appeal regarding termination of the Tagami lease—and, according to the NCIO blog, a decision is unlikely until late 2025—another significant battle looms. Judge Chhabria left the door open for the city to return to court with more evidence that shipping coal would present undue health and safety harms to the residents and neighborhoods affected. That evidence now exists.
On July 12, 2023, the East Bay Express published the results of a groundbreaking, 81-page study, “Assessment of Coal and Petroleum Coke Pollution,” conducted by two UC Davis scientists, along with local physician/public health researcher Heather Kuiper. Paid for by a grant from the California Air Resources Board, these first results focused on Richmond, as that is where coal is currently being shipped to the Levin-Richmond Terminal.
From that article: “The study used three independent methods to monitor and sample…It measured ‘coal-related PM 2.5 associated with: 1) rail conveyance of coal through Richmond; 2) coal train car storage at the holding yard; 3) coal and petcoke storage and handling activities at the Levin Terminal; and 4) exposure in nearby communities.’
“The results: ‘Both coarse and fine coal particles were identified using separate independent laboratories and methods…It is therefore reasonable to expect subsequent health effects due to coal and petcoke from terminal operations,” the article added.
The first study focused on Richmond. But a new, expanded assessment of the data, published April 18, 2024, in the journal Environmental Research, “focuses on the San Francisco Bay Area and is the first health impact assessment of coal train pollution in the world,” according to UC Davis materials.
The new assessment, said lead author Bart Ostro, looks at impacts all along the rail line in the East Bay, from Martinez to Oakland, and “quantifies the expected number of health effects,” including those that would be generated if millions more tons of coal were being transported along the line.
Davis materials state: “The study found that, if approved, the proposed coal terminal could result [per year] in the following for the [approximately] 262,000 people who would be exposed:
• 28 additional hospital admissions for heart disease
• 22 new cases of asthma
• 17 additional cases of pneumonia”
The new assessment states: “…in the worst-case scenario of a 2.1 μg/m3 increase near the rail line, premature mortality would increase by 1.3% while hospital admissions for chronic lung disease, pneumonia and cardiovascular disease would increase by 4.7%, 6.2% and 2.2%, respectively.” It is worth noting that, according to the World Health Organization, there is no level of safe exposure to PM 2.5, which cannot be seen by the naked eye.
Kuiper noted that some coal dust blowing off open coal cars remains on the tracks, and, besides being dispersed by wind, is further dispersed by additional freight rail traffic. Ostro, Kuiper and NCIO-member Ann Harvey reaffirmed that developer claims that coal cars traveling into OBOT would be “covered” cannot be substantiated, as no such covers have been field tested or put into production.
Ostro and Kuiper both emphasized the importance of this data for low-income, BIPOC communities which are already adversely affected by multiple pollution sources.
If the city’s current appeal is denied, NCIO and other environmental groups are prepared to return to court armed with new scientific evidence, evidence that would withstand hostile scrutiny.
Thanks for the coverage of this important issue! And a reminder that some development is crucial for the climate issue, such as increasing electrical transmission capacity so that renewable energy can be used more places and more times of day. Across the country, electricity reliability is threatened by an aging and fragmented grid that cannot support the increased load brought on by economic growth or withstand extreme weather.