SAN FRANCISCO — The question over whether Oakland had enough evidence to ban the handling and shipment of coal within city limits was put under a microscope Tuesday, at the start of a federal trial brought on by a prominent developer’s lawsuit.
The 2016 ordinance unanimously approved by the Oakland City Council directly put a stop to developer Phil Tagami’s plan to import trainloads of coal from Utah to be stored in Oakland and then loaded on ships bound for Asia. Tagami, the developer of the Fox Theater and Rotunda Building, sued in December 2016 claiming the council’s ban violated federal commerce laws and breached a 2013 development agreement.
Last week, after hearing arguments at a pretrial hearing, U.S. District Judge Vince Chhabria ordered a bench trial to determine whether the council’s ban in fact violated the agreement with Tagami to build a $250 million marine terminal and logistics center adjacent to the Port of Oakland, on former Army base land. If the ban is overturned, Oakland could end up the largest exporter of coal on the West Coast.
Tagami testified Tuesday that his terminal would be unlike any other in the country, and said coal-exporting facilities in Richmond and Stockton use “19th Century” technology. He noted that the Oakland terminal would cover trains and voluntarily adhere to more stringent regulations used at a port in Long Beach.
The developer, dressed in a gray, three-piece suit, testified that the terminal would ship 1 to 3 million tons per year in the first three years and possibly more in later years. Officials at Long Beach, the largest exporter of coal in the state, previously said export figures have dwindled in recent years.
“We are committed to meet all the terms of our agreement and follow them,” Tagami testified. “We’d like to bring this project to conclusion. It’s been a lot of hard work, and there’s still a lot of work to do.”
The first day of testimony Tuesday focused on a 2016 report by the city’s environmental consultant, Environmental Science Associates. The company was hired to study the effects of coal dust after Tagami’s plans to ship coal and petroleum coke were made public. The firm’s analysis found that errant coal dust could damage organs and harm residents living along the railway, particularly in West Oakland.
Its findings led Oakland officials to push for and ultimately approve the ban, with support from environmental groups, including the Sierra Club. Under the contract with Tagami and the Oakland Bulk and Oversized Terminal, the city had the right to enact new laws to protect the health and safety of residents.
Judge Chhabria, at last week’s hearing, called the study “pretty vague,” according to the East Bay Express, and asked for more information on how much harmful particulate matter would end up in the air as a result of the project. On Tuesday, Tagami’s legal team called two ESA employees to the stand and questioned the accuracy and scope of the study.
Attorney Robert Feldman and fellow lawyers asked whether newer methods — such as using covered train cars to transport the coal — were adequately studied as part of the report.
“What your client (the city of Oakland) really wanted was a report to support a coal ban, correct?” Feldman asked while ESA project manager Victoria Evans was on the stand. After a long pause, Evans said she wasn’t told that was the purpose.
An attorney for the city said the methods Tagami is proposing haven’t been tested and because the design is in early phases, it would be hard to make conclusions. As an example of a safety risk, attorney Gregory Aker asked Tagami whether he was familiar with spontaneous combustion involving products like coals.
“Yes, I’ve heard lots of commodities don’t like to sit for a long time,” Tagami said.
Aker then asked what would happen if the terminal were shut down for some reason, or trains backed up — if that could leave trains as long as 100 cars idling on East Bay rails and subject to spontaneous combustion.
“If the process was stopped midstream, that would be the situation,” Tagami said. “That’s what I’ve been told.”
Opponents have said any amount of errant coal dust would be detrimental to West Oakland, where county health studies have shown residents have a higher risk of asthma and other respiratory issues.
“We look forward to a resolution that will protect the health of the people of West Oakland, and get us back to focusing on the Oakland Army Base and its promised job creation and economic development,” Luis Amezcua, executive committee member with the Sierra Club Bay Chapter, said in a statement before Tuesday’s hearing.
The trial is expected to last several days.
