CLIMATEWIRE | The collapse of the Francis Scott Key Bridge in Baltimore on Tuesday disrupted the supply chain of major automakers and blocked access to the nation’s second-largest port for coal exports, sending companies scrambling to reroute shipments.
The disaster occurred after a ship leaving the Port of Baltimore collided with a central support of the bridge, blocking access to the Curtis Bay Coal Piers run by CSX and the Baltimore Marine terminal operated by Consol Energy. Both export facilities, which are north of the bridge, are major suppliers of coal to India.
Coal exports from Baltimore may be blocked “for the next, by my estimate, six weeks,” Ernie Thrasher, CEO of coal marketing and logistics company Xcoal Energy & Resources, said in an interview.
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Exports have become increasingly important for the U.S. coal industry and global buyers as appetite for the fuel wanes domestically. But it’s unclear how quickly safe access to the shipping channel will be restored.
"A big variable will be how fast can we remove the debris from the bridge," Tom Perez, a White House senior adviser and assistant to President Joe Biden, told E&E News. "The challenge we have right now is the container ships can't get out."
In 2022, about one-fifth of U.S. coal exports left through Baltimore, according to the U.S. Energy Information Administration.
Michelle Bloodworth, CEO of coal industry group America’s Power, estimated that coal exports from Baltimore last year totaled about 28 million tons. About 9.5 million tons came from metallurgical coal used in metalworks, while 18.5 million tons were from thermal coal, or coal mostly used to generate electricity.
The U.S. exported nearly 74 million tons of coal in the first three quarters of 2023, according to EIA, which has not yet released data on the final quarter of the last year.
Alexis Ellender, a spokesperson for shipping and energy data company Kpler, said some coal that was initially headed for export from Baltimore could be rerouted to the Lambert's Point terminal at Norfolk, Virginia, home to the nation’s largest coal export terminal, but “this is not expected to completely replace the export capacity disrupted at Baltimore.”
Three cargo ships were inside the port at the time of the collapse, two of which — Klara Oldendorff and JY River — were loading coal used to make electricity. They “will remain trapped until the waterway reopens,” Ellender said in an email.
Ellender also said 14 vessels were scheduled to load coal at the port in the coming days but are expected to be delayed until the port reopens or force majeure is declared, which would remove a shipper’s responsibility from fulfilling their contract due to circumstances out of their control.
Consol Energy, the Baltimore Marine terminal owner, said in a statement that “at this moment, we do not have a definitive timeline of when vessel access or normal operations will resume.” The company’s stock price fell about 6.8 percent in trading Tuesday.
And CSX said in a statement that it “intends to keep its Curtis Bay Coal Piers facility operational but will continue to assess the circumstances to determine appropriate actions moving forward,” and “customers should anticipate potential shipment delays” because of the collapse. The company said it has the ability to dispatch additional coal trains to Baltimore.
Arch Resources, the country’s second-largest coal supplier and primary shipper in Baltimore, saw its share price dip by about 3 percent Tuesday. Arch did not immediately respond to a request for comment.
The global impacts of the blocked terminals are less significant than the effects to the U.S. and India, according to Thrasher from Xcoal. Baltimore also ships coal to Japan, the Netherlands and other countries.
“The overall exports for Baltimore, although substantial, are rather minimal in the scope of global seaborne coal trade," he said, adding that "as far as an impact on the global coal market, I don't think we’ll have a mid- or long-term impact."
Meanwhile, exports of liquefied natural gas will be largely unaffected by the bridge collapse, energy experts said.
Maryland’s Cove Point LNG facility, the closest export terminal of the fuel, is about 75 miles south of the Francis Scott Key Bridge. The site will experience “no operational impacts,” its owner, Berkshire Hathaway Energy's Eastern Gas Transmission and Storage, said in a statement.
Hinson Peters, a spokesperson for the Natural Gas Supply Association, told E&E News that there "are no LNG exports going through the Port of Baltimore.”
Auto industry mayhem
Another industry that could see disruptions is the auto industry, as General Motors, Volkswagen, Ford, Volvo and Toyota all process shipments at the port.
According to Maryland Port Administration data, the facility topped the list of busiest U.S. ports for car shipments, handling more than 750,000 of them in 2023. That year motor vehicles and parts accounted for about 42 percent of all port imports and 27 percent of all exports, the data shows.
When asked how the crisis would affect their products — including electric vehicles — several automakers said it was too soon to tell. Toyota officials said their battery EVs would not be affected.
“It’s too early to say what impact this incident will have on the auto business — but there will certainly be a disruption,” said John Bozzella, CEO of the automobile trade group Alliance for Automotive Innovation.
Ford Chief Financial Officer John Lawler told Bloomberg TV the bridge collapse will affect operations, adding that the company will divert to other ports.
Other companies said they did not expect massive disruptions.
GM said in a statement it is “working to re-route any vehicle shipments to other ports as recovery work continues.” By Tuesday afternoon, the car company said in an email it has secured shipping alternatives for “where workarounds are necessary.”
Volkswagen also said its port operations were not affected by the bridge collapse.
“We do not anticipate any impact on vessel operations but there may be trucking delays as traffic in the area will be rerouted,” the company said in a statement.
Toyota said the incident would mostly affect its vehicle imports but added that it does not anticipate “significant” problems. The Japanese automaker added in its statement that it is monitoring the situation to “determine the longer-term impact and countermeasures.”
Reporter Niina H. Farah contributed.
This story aslo appears in Energywire.
Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2024. E&E News provides essential news for energy and environment professionals.