Fraser Surrey Docks on the lower Fraser River.

Fraser Surrey Docks on the lower Fraser River.

Surrey coal terminal to load to ships instead of barges

Move by Fraser Surrey Docks eliminates Texada leg to cut costs amid 'challenging' coal export economics

Falling coal prices have spurred Fraser Surrey Docks to amend its proposal for a coal export terminal to load directly onto ships in the Fraser River rather than barges that would have required an extra handling step.

The barges were originally to have gone downriver and across the Strait of Georgia to Texada Island, where coal was to have been unloaded and reloaded to ocean-going ships.

CEO Jeff Scott said the change will significantly cut the project’s operating costs, although it means an increase to the originally estimated capital cost of $15 million.

There are no other changes to the project, which would haul four million tonnes of U.S. coal per year via one extra train per day on the BNSF rail line through White Rock and South Surrey.

“The price of coal has been continually dropping and is challenging in this current market,” Scott said. “This allows us to provide a more economically suitable proposal in the near term.”

Pressed as to whether the rationale for the project is waning altogether, Scott insisted he’s confident it remains viable.

“The economics are better under this solution, especially during the short term.”

Scott denied the decision was motivated by environmental concerns about coal dust wafting from open barges carrying coal down the river.

Officials were confident that method would have worked well, and they are keeping the barges in the plan as a backup option.

Under the new plan, coal will go directly into the hold of each docked ship, Scott said, adding there is no plan to stockpile coal at the facility.

The change would mean 80 ships docking and hauling coal out each year instead of 640 barge loads. The ships will be the Panamax-size cargo ships of up to 320 metres in length that now ply the lower Fraser.

Instead of 50 jobs associated with the project split between Surrey and Texada Island, Scott now estimates there will be 40-45 jobs just at Surrey.

Asked why Fraser Surrey Docks didn’t seek to load directly to ships from the outset, Scott said changing commercial circumstances now made it possible.

“We didn’t really have the opportunity or the ability to look at it previously.”

Fraser Surrey Docks is requesting public feedback until May 19 on what new studies it should undertake or revise in light of its intent to seek an amendment to the project approval granted by Port Metro Vancouver last August.

Climate change activist Kevin Washbrook called it “a kind of victory” that the operation would no longer run open barges of coal down the Fraser with questionable safeguards against discharges to the environment.

“The weakest link in this plan and the vaguest part of it all along was the shipping of coal by barge on the Fraser and across the strait,” he said.

“But is this a bit of a bait and switch? We’ve gone from a coal transfer facility to a full fledged coal port on the Fraser River near homes in Surrey and across from downtown New Westminster.”

Washbrook also questioned how the coal port would deal with backed up incoming coal trains if there’s a delay in ships being able to dock.

He called on Port Metro Vancouver to restart its approval process for the project with better engagement of the public, local governments and health authorities that have been critical of it in the past.

Opponents fear the coal terminal could grow much bigger than its stated initial size over time. A series of court cases involving the project are pending.

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