City of Oakland Loses Legal Battle Over Export Terminal for Wyoming Coal
Years after it defeated a proposal to build a coal terminal on a former Army base in West Oakland, Oakland's city hall may have to pay out hundreds of millions of dollars in damages to the plan's sponsors for alleged "tortious interference" with the project.
The story started back in 2009, when California developer Phil Tagami began work on a large-scale multiuse project to repurpose the Oakland Army Base, a large military dock complex, and rename it the Oakland Bulk and Oversized Terminal (OBOT). In 2015, it became clear to the city and to local activists that a likely centerpiece of the project would be a rail-to-dock coal terminal operated by the commercial tenant, Insight Terminal Solutions (ITS). Oakland - backed by multiple environmental law NGOs - decided to resist the development project, citing the potential effects of coal dust on nearby residents. Under Mayor Barbara Lee, the city used a "pattern of interference" to block ITS from moving ahead with securing financing and developing the project, resulting in ITS' bankruptcy, Judge Joan A. Lloyd ruled on Monday.
The judgment in the case could be exceptionally large. The city's expert witness put it at $230 million, and ITS claims that the total comes to about $670 million. This amounts to about 10-30 percent of the city's annual operating budget; Oakland has already been fighting to close a nine-digit budget deficit, even before the added burden of a nine-digit court judgment.
The City of Oakland has been losing legal battles related to the terminal project for years. In September, the California Supreme Court refused to hear an appeal of a lower court decision that paved the way for construction to proceed at last. According to lead developer Phil Tagami, the project could be completed and the first shipment under way as early as 2028.
The terminal is of great interest to Wyoming coal producers, who see it as a lifeline to new markets in Asia. It is one of the few fossil fuel terminal projects to have a chance at breaching the "thin green line" of environmental opposition on the U.S. West Coast, and it is a rare opportunity for landlocked coal miners in the Intermountain West to find customers outside of the U.S. for their product. "The demand for Wyoming coal is there, and we will continue to work to get it to those overseas markets," said Travis Deti, executive director of the Wyoming Mining Association, speaking to the Cowboy State Daily.
Between the California court rulings in favor of the project's right to proceed, and the federal court ruling in favor of ITS' interference claims, the City of Oakland has fewer remaining options to resist the proposal. Local residents and activist groups in Oakland have pledged to keep fighting the project and have threatened to bring new lawsuits against any future investors.