Ambre Energy’s risky bet on US coal exports
It’s not a good time to be a coal industry executive in the US. Last year, wind power made up nearly half of all new installed electricity generation, and domestic coal use is on the decline year after year. With dimming prospects at home, companies are in a race to export US coal to foreign markets. Some of the coal companies pushing to export US coal are relatively well known, especially for their long history of environmental and labor abuses – think Peabody and Arch. But until now, little has been known about Ambre Energy, the Australian company pushing two of the controversial coal export terminals in Washington and Oregon. A new report from the Sightline Institute, “Ambre Energy: Caveat Investor” digs deep into the inner workings and shaky footing of this startup – and for the communities and investors weighing Ambre’s promises, the results are not pretty. The report details the many challenges facing Ambre in its aspirations of becoming a true planet-destroying coal titan.
To begin with, Ambre has accumulated $124 million in losses, while collecting only $6.6 million in revenues over the last 7 years. An earlier coal project in Australia collapsed in the face of opposition from farmers and the local government, and Ambre now admits it lost $10.9 million in the process. With the cancellation of that Australian project, the company barely qualifies as a coal company – only because of two failing coal mines in Montana and Wyoming they purchased from previous owners who were planning to close them. Now, the company is on the hook for hundreds of millions of dollars in liabilities for mine reclamation and cleanup, retirement benefits, and other costs at those mines. Meanwhile, Ambre recently announced layoffs of 75 people at one them, the Decker mine, amid a lawsuit from its former partner Cloud Peak Energy.
In its foray into the Pacific Northwest, Ambre almost immediately established itself as an untrustworthy partner by trying to hide the amount of coal it was planning to export at its proposed terminal in Longview, Washington. Legal challenges revealed that Ambre executives had actually been aiming to export up to 80 million tons of coal each year – fifteen times the 5.7 million tons they had publicly claimed. Internal emails show that executives were concerned that revealing their true plans would mean the project “will be perceived as having deceived the agencies” and that the company’s “good reputation would be lost overnight.” Indeed.
Meanwhile in Oregon, the company faces fierce resistance to its plans – hundreds of people have turned out to public hearings and Oregon state officials have received an unprecedented number of public comments in opposition to the project. Ambre does not have a single permit for either of its proposed export facilities in Oregon and Washington.
These set backs aren’t limited to small Australian upstarts. The big, well-established US coal mining companies are losing huge amounts of money – the result of their utter failure to plan for a shift away from their dirty fuel. In just the fourth quarter of 2012, Arch Coal posted a $295 million loss, while Peabody lost a staggering $1 billion. Over 10,000 people have attended public hearings in Washington and Oregon to oppose Peabody’s Cherry Point export terminal. Amid big losses in the industry, warnings of the enormous carbon pollution of expanded US coal exports, and growing awareness of the risks of stranded high carbon assets, it’s hard to imagine what kind of company looks at the sector and thinks, “This is the time to get into coal!”
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