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Dock operator talks future of coal shipments from Twin Ports

In her visit to the Port of Duluth-Superior last week, Betty Sutton singled out the port's coal exports as one of its shining international success stories.

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The Whitefish Bay of the Canadian Steamship Lines docks at the Midwest Energy Resources Co. coal terminal on July 26, 2013, after taking on about 31,500 tons of coal. (2013 file / News Tribune)

In her visit to the Port of Duluth-Superior last week, Betty Sutton singled out the port’s coal exports as one of its shining international success stories.

 “Midwest Energy Resources Co., a major coal dock in Superior, handles low sulfur coal from the Powder River Basin, while Canadian lakers pick up and transload coal shipments along the seaway for export to Europe,” said Sutton, the top administrator for the Saint Lawrence Seaway Development Corp., which manages the narrow waterway that connects the Great Lakes with the Atlantic Ocean.

She was describing a deal that was in place from 2011 to 2014, when Midwest Energy Resources, or MERC, partnered with Quebec Stevedoring’s Beauport Sector dock in Quebec City to develop a supply mechanism for customers of American coal in Northern Europe.

MERC President Fred Shusterich said that deal has since expired, with no replacement in place. It means 2015 won’t feature the same 1.69 million tons of coal being exported out of Duluth that 2014 did.

But it doesn’t mean the end of the practice altogether, said Shusterich, who was on hand for Sutton’s visit to the Duluth Seaway Port Authority’s offices.

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“The market is somewhat flat, but we’re looking for re-entry in probably a year or two,” he said. “The energy market is in flux.”

From 2011 to 2014, freighters were leaving Duluth with 85,000 to 130,000 tons of coal, which was then transloaded in Quebec City onto salties bound for Rotterdam in the Netherlands or for the Baltic region, explained Shusterich, who is confident Duluth hasn’t seen the last of its coal exports.

“I can’t tell you when, but in a couple of years,” he said. “Everything in this business is cyclical. We’re always reformulating what we do. We have some customers looking at (exports) that have never been in our portfolio before, but they look to play a major role in our business in the next several years.”

Like in the United States, where coal has taken a substantive hit in the move toward clean energy, government imposition and price changes can play havoc on foreign markets, too. MERC has worked feverishly throughout the new energy revolution to upgrade its coal standards, including the addition of a number of infrastructural and best-practice measures to reduce dust to a minimum at its dock.

“People think all coal is dirty,” Shusterich said before describing the mountains of coal from the Powder River Basin of Montana and Wyoming on the MERC dock as being distinguished by its low sulfur content - from 0.1-0.3 percent sulfur.

“That’s really low,” he said. “People think all coal is dirty, but everything you burn gives off carbon dioxide.”

In Japan, Shusterich said, the wake of the 2011 Fukushima nuclear disaster has led to idling plants and diminishing capacity for that form of energy and resulted in more coal burning. He called Germany a huge market for coal.

Western coal from Wyoming, Montana and even Colorado is some of the cleanest in the world and has a viable future in the United States, Shusterich said. Domestic coal shipments on the Great Lakes are on their way to enjoying a five-year high, with 5.96 million tons having already moved through Lake Superior alone - a through-July number that eclipses full-season totals for each of the three previous years.

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“Even in this country we’ll go from (coal) as a 51 percent baseload fuel to somewhere in the high 30s,” Shusterich said. “It still has to be one-third of the portfolio but people don’t talk about that.”

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