A long court battle may be nearing the finish line for an Oakland, California, developer Phil Tagami, who is ready to talk about what he characterizes as a “last-ditch effort" to delay his controversial bulk marine terminal project as the California Supreme Court decides whether to hear a final appeal.
"That's what's happening right now," Tagami told Cowboy State Daily, describing the city of Oakland’s opposition to the project and plea to the state’s top court. "That decision, the court will be deciding before Oct. 1 if they are going to hear it."
A win for Tagami would mean opening the West Coast terminal to ship coal to Asian markets, which Wyoming thermal coal producers have been working to secure for more than two decades.
The Oakland Bulk and Oversized Terminal (OBOT) has captured the attention of the Cowboy State's coal industry and political leaders, who see the facility as potential to open new markets for Powder River Basin coal.
Wyoming coal producers and state officials continue to closely monitor Tagami's legal journey, including a ruling earlier this year that upheld a district judge's original decision in favor of the developer.
"We're watching what happens in Oakland very, very closely," said Travis Deti, executive director of the Wyoming Mining Association. "We would love to export our coal off the West Coast. And it's just been very difficult, and there may be a real opportunity there."
‘Best’ Chance For Wyoming Coal
The project received renewed attention after the California Court of Appeals rejected Oakland's appeal in a 57-page opinion, upholding a lower court decision that reinstated OBOT's ground lease and gave the company 2.5 years to begin construction on the West Oakland waterfront.
Emily Arthun, CEO of the American Coal Council, described the Oakland terminal's legal victory as representing "the best current opportunity for Wyoming coal exports after years of political and legal obstacles."
"Oakland just continues to lose,” Arthun said. "They continue to lose. They continue to lose. They're going to bankrupt Oakland.”
There remains a tangle of legal challenges over the OBOT, and some are threatening the city of Oakland with hundreds of millions of dollars in possible damages.
Over the last decade, said Tagami, his legal odyssey has generated 310 pages of court documents that crossed the desks of 33 judges, all of them ruling against the city and its hard opposition to coal.
"You have basically a total of 15 federal judges involved,” said Tagami, describing the drawn-out legal fight that started around 2016. “People with black robes and gavels, the findings of fact, apply the law accordingly to give a conclusion and an outcome in favor of moving a project forward, a bulk terminal, proving that the city had violated the contract."
When reached by Cowboy State Daily, city of Oakland spokesperson Nina Erlich-Williams with Public Good PR said, “The city attorney does not have a comment on this issue at this time.”
Not Only Coal
Tagami has consistently framed OBOT as a multi-commodity facility designed to serve market demand rather than any specific product.
"Development of a multi-commodity bulk marine terminal was essential to the revitalization of the former Oakland Army base and was literally the anchor to attract substantial investment by the state of California and infrastructure, as well as federal dollars to, in essence, redevelop that property," Tagami explained, detailing the kind of support the project initially attracted.
Then, when a news story in Utah broke in 2015 about potential coal shipments through Oakland, Tagami said local politics around coal and climate change flooded the zone.
"You have a number of elected officials who feel they really need to worship at the altar of whatever this progressive environmental group says they must do if they want to seek reelection,” said Tagami, referring to groups like San Francisco Baykeeper and No Coal In Oakland. “It's become kind of a loyalty test.”
No Coal In Oakland did not return a message from Cowboy State Daily and San Francisco Baykeeper declined to comment.
On its website, No Coal In Oakland spells out its mission simply: “To stop the threat of coal being transported by rail into Oakland for export overseas.”
The group touts support from the Oakland City Council, the city’s mayor, and a variety of politicians, but acknowledges the potential of the project moving ahead.
“The proposal to build a massive coal terminal at the foot of the Bay Bridge remains tied up in both federal and California lawsuits, and decidedly on the table,” according to the group.
In March, a coalition of 86 organizations and nearly 1,000 people signed an open letter declaring: "Coal is the dirtiest fossil fuel on earth, imperiling the health of workers, endangering communities along rail lines that transport it, and contributing greatly to global warming and climate change."
Coal Vs. Climate
Tagami does not question the research showing coal’s contribution to global warming, but he’s also a clean-coal optimist.
"I'm not ignorant to the concept of climate change,” he said. “And I understand the science that's been aggregated. So I'm not a denier. But I would also say that, ‘OK, it (coal) is part of the energy mix.'”
Tagami pointed to Japan's post-Fukushima energy strategy as an example of modern coal technology getting greener.
"The country of Japan built a large number of coal-fired plants. But they're not your 1957 Chevy. They're your 2025 Prius, if you follow me,” said Tagami. “These are coal gasification plants that use a combination of coal as well as wood pellets to basically, in essence, meet the COP 21 requirements” promoted by the United Nations in response to fossil-fuel driven climate change.
As for what gets shipped out of Oakland, that is governed by federal law, and nothing in those statutes makes shipping coal illegal, he said.
"I can't tell someone what they can and can't put on a train if it's legal to ship,” said Tagami. “So we have been the target of most protests, because we're bad people for letting the industry operate under the federal law.
"As developers, we aren't there to dictate or prescribe the specific commodities that may or may not come through. That's really determined by what the marketplace needs. Both what the beneficial cargo owner wants to make available to the market, as well as what the market demand is and where that commodity needs to travel to."
Wyoming Visit
The original push to ship coal from the Rocky Mountain region came from Utah, where coal is the official state rock.
Then Wyoming Gov. Mark Gordon took notice and hosted a meeting in Cheyenne with Tagami and his team in 2021.
“He was very charming and his team was very helpful,” recalled Tagami. “But again, we were just in the middle of litigation."
Still, Wyoming left a positive impression on Tagami.
"I kind of fell in love with the statehouse and Wyoming,” he said.
“It's smaller than Oakland City Hall,” Tagami said of the Wyoming Capitol. “It's just kind of a neat building. And it's also nice to see how much collaboration there was inside the building."
Sub-Bituminous Coal
Wyoming primarily mines sub-bituminous coal. This coal type is characterized by a lower heating value compared to bituminous coal, but it has low sulfur content, making it cleaner burning and well-suited for power plants.
But is this product in demand enough to trigger large overseas contracts from Asian countries with coal-burning power plants?
Rob Godby, professor of energy economics at the University of Wyoming, noted the logistical challenges for Wyoming coal producers.
"Tough to get PRB coal to that terminal just because of the rail network,” Godby told Cowboy State Daily. “Even in Utah, the other issue was as I recall the need to upgrade rail access significantly, including reopening abandoned lines.
"As I understood it, capacity at the terminal would also be smaller than anything that was talked about in the Northwest."
Estimates project the Oakland terminal might see 8 million to 10 million metric tons, while the canceled Millennium Bulk Terminal in Longview, Washington, aspired to move 44 million metric tons.
“There’s certainly lots of conversations about Wyoming coal going that way,” added Arthun from the American Coal Council. “You just got to make it affordable. It's not a short trip."
Train Piece
About 1,000 miles of rugged country sit between the heart of the Powder River Basin in Gillette, Wyoming, and the San Francisco Bay.
If coal ultimately arrives in Oakland, OBOT’s rail system will move the cargo the last mile.
“It would literally be the last mile,” said Mark McClure, Tagami’s partner in the project.
In response to questions about the distance between Wyoming and West Oakland, McClure said, “To say that Gillette is far from Oakland, in comparison to what?”
"I don't know that there's any closer west coast facility than Oakland that has access to deep water,” added McClure. “Right now there's coal coming out of Utah, going to Stockton and Richmond ports.”
But those options are not as attractive as the potential of OBOT.
"The facility is both Union Pacific and BNSF served,” said McClure. “The Union Pacific controls the mainline into the Port of Oakland. And Union Pacific also has good rail infrastructure going into the Powder River Basin, Utah, Arizona, Nevada. So a lot of mining states."
David Madison can be reached at david@cowboystatedaily.com.
