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Goldman Sachs pulls out from Pacific coal export project

Jan. 10, 2014 at 4:06 PM   |   Comments

SEATTLE, Jan. 10 (UPI) -- Goldman Sachs has pulled out its investment in the proposed Gateway Pacific Terminal, expected to be the largest coal export terminal in North America.

The investment bank this week sold its 49 percent ownership of FRS Capital Corp. stock, the holding company of Seattle-based port operator Carrix Inc., the parent company behind the Gateway Pacific Terminal.

The new investor is Fernando Chico Pardo, a Mexican businessman.

"We've been fortunate the past seven years to work closely with one of the world's leading investors in infrastructure and their fine people but appreciate that, as with all investment funds representing an array of investors, they approach their investments with a need to invest, hold and then sell over a defined time frame," said Carrix Chairman Jon Hemingway in a news release.

The shift in ownership is not expected to affect the proposed project in Bellingham, Wash., says terminal developer SSA Marine, a unit of Carrix.

"We are full speed ahead on [the] Gateway Pacific Terminal," Bob Watters, senior vice president of SSA Marine, was quoted as saying by the Puget Sound Business Journal. He added that the company is hoping to have an environmental impact study and permitting process finished within two years.

The terminal, if built, would transfer as much as 48 million tons of Wyoming coal each year from trains to ocean-going vessels bound for Asia.

Of six coal export terminals proposed in Oregon and Washington, three have been dropped in the last two years.

Environmentalists and locals concerned about coal dust and diesel pollution from trains have opposed the projects. Conservation groups also argue that it doesn't make sense environmentally for the nation's utilities to cut on coal in favor of cleaner natural gas and renewables while providing fuel to coal-fired power plants in Asia, particularly in China.

"We already know that local Main Street businesses would feel the negative impacts from coal export, and communities across the region are saying no to this bad deal because of health, climate, environmental and economic impacts," Crina Hoyer, executive director of Bellingham, Wash., environmental group RE Sources for Sustainable Communities, said in a news release.

"Goldman Sachs' stepping away from coal export is yet another sign from Wall Street that coal export is a losing investment," she said.

Goldman Sachs' pullout comes six months after the release of its report titled, "The Window for Thermal Coal Investment Is Closing," which stated: "We believe thermal coal demand growth will slow down in the coming years. ... The potential for profitable investments in new thermal coal mining capacity is becoming increasingly limited."

Furthermore, the International Energy Agency in its annual outlook for the global coal sector released last month noted "uncertainties surrounding future demand in China and actions by environmental and anti-coal groups will also hamper the growth of U.S. coal exports."

© 2014 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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