In a case with major implications for Utah’s coal producers, a federal judge in California has ordered a trial over the city of Oakland’s prohibition on shipping coal through its ports on the San Francisco Bay. After hearing arguments on motions that could have resolved the costly lawsuit, U.S. District Judge Vince Chhabria decided instead to hear testimony on a key claim raised by developer Phil Tagami, who holds contracts with Oakland to build an export terminal on the former Oakland Army Base. The judge has set aside four days to try the developer’s claim the city breached its contracts with him.
The city banned coal in 2016 after word got out that four coal-producing Utah counties were helping finance the project, to the tune of more than $50 million. Although city officials were in the dark about coal’s role, Utah’s largest producer Bowie Resource Partners, with mines in Sevier and Carbon counties, turned out to be the central player in the terminal project, known as Oakland Bulk and Oversized Terminal, or OBOT.
After the project’s coal connection was exposed, Bowie still downplayed its involvement and proponents claimed coal was just one of several commodities that might pass through it. But recent court filings have brought the true extent of Bowie’s role into full focus. The coal producer owns the company, Terminal Logistics Solutions, that would operate OBOT, and is paying the developer’s legal costs, with Utah coal envisioned as the project’s “anchor tenant.” Salt Lake Tribune
