Jaquiss' article can be found here.
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MICHAEL DUNNE: I'm Michael Dunne. In many ways, it seems like the perfect project in the perfect location at the perfect time, revitalizing the Coos Bay region, which has struggled economically in recent years with an updated shipping terminal and rail connection hits all the boxes. It promises to create jobs, alleviate port congestion on the West Coast, and boost the local economy. But what if all those promises are as elusive as a hot, sunny day on the Oregon coast today, on the show, you'll hear from a reporter at The Oregon journalism project who's written a story which casts major doubt on all the positive projections on the Coos Bay shipping terminal projections and promises made at the highest levels of Oregon political leadership. Nigel Jaquiss, who is a reporter with The Oregon Journalism Project, Nigel, thanks so much for coming on and talking with us.
NIGEL JAQUISS: Sure, it's my pleasure.
MICHAEL DUNNE: I enjoyed reading your article recently, the title is Experts Skeptical About Plan To Bet Billions On Coos Bay Shipping Terminal. For our audience, why don't you kind of give us the overall summary of your article and what you found out?
NIGEL JAQUISS: Sure, people may remember, that during the pandemic, there was a period when a lot of the container ships that serve the West Coast bringing manufactured goods from Asia were backed up off the court the Port of Los Angeles. So, a company from Kansas City that builds warehouses all over the country came to the port of Coos Bay and said, Hey, we think there's a supply chain bottleneck, that there's more requirement for port capacity on the West Coast, and we think Coos Bay is the perfect place to build a new terminal. So, your listeners may be familiar with coos Bay's history. It was once the largest wood products port in the United States. It would see nearly a ship a day coming to load logs or, you know, milled wood products or pulp. But these days, only about 50 ships come every year. So, Coos Bay has really been economically depressed since the big federal timber cuts ended, and since some of the local forests were harvested. So, for really, for decades, people around Coos Bay have been looking for a way to revitalize the port. They've tried many, many things, many, many people will remember, for more than a decade, they tried to sign an LNG terminal there that ended in 2021 so this idea of placing a container port was sort of the latest in a long string of ideas about how to take advantage of the natural harbor that exists at Coos Bay.
MICHAEL DUNNE: And what you found out was, and you found out and wrote about that there's a lot of political heft behind this movement to build this container port at Coos Bay. But you also found out that a lot of experts were saying, well, it may not be as rosy a picture as what is being talked about. Talk about that.
NIGEL JAQUISS: Sure, So our two US senators, Ron Wyden and Jeff Merkley, have both been very strong supporters. They've both visited widens, visited a number of times. Val Hoyle and her predecessor in the district, former state of former US, rep Peter DeFazio, have both been very strong supporters. They all are interested in in the same thing, and that's creating jobs. They hope that there would be a couple 1000 construction jobs building this new port. They hope that there would be a couple of 1000 or more permanent jobs at the new port. And of course, that region of the state has really suffered, as I said, so they've gotten behind this, and they've put real money behind it. So far, more than $60 million in federal grant money and about $160 million in state money. Much of that has been appropriated to dredge the harbor we need to dredge. Harbor about eight feet to accommodate the large ships that bring containers. And so, you know, President Biden sent his infrastructure czar, Mitch Landrieu out here. And unlike many Biden era projects, the Trump administration, at least according to our federal delegation, is still very interested in this project. So yes, as you said, a lot of, a lot of political hefts behind this project.
MICHAEL DUNNE: And there's, there's a line in your piece, which I want to explore a little bit. Wyden, Merkley, Hoyle, Kotek and the legislature are operating on hope rather than facts. And you've mentioned that word hope a couple times just now, and that's kind of the crux of this isn't it, that there's a hope that this could become a job producer, a hope that it can produce a lot of ships and reinvigorate the economy. But talk about what some of the experts who really know what ports can do are saying about this potential.
NIGEL JAQUISS: So, I talk to people all over the country who are who are engaged every day in the economics of trade, and that means supply chains, and that means shipping, that means use of rail, that means warehousing. And to a person, they said, look, the fundamental premise here that Oregon is operating on is absolutely wrong. That premise is that there is a shortage of Port capacity to receive these large container ships from Asia. So, they said, Look, there's excess capacity at Seattle, Tacoma, at Oakland. There's excess capacity at Vancouver and Vancouver, actually, in manzanilla, Mexico, which is another large port, and Los Angeles are all embarking on multibillion dollar expansions of their existing facilities. So, they, I probably talked to nearly, I guess, 10 experts from different parts of the country about this. They all basically said the same thing, Coos Bay isn't needed. It won't be able to compete. One of the parts of the story I haven't talked about is that if a ship were to unload at Coos Bay, the next step is to put the containers. Those are the large metal boxes that people will be familiar with. You see them on trains. You see them hauled around by trucks, to put those large metal shipping containers on a train in Coos Bay and send them to Eugene, where they would be put onto the Union Pacific line at the Whitaker yards in Eugene. Well, that that rail line exists today, but it's more than 100 years old. It's got 122 bridges and nine tunnels. Basically, none of them are strong enough or big enough to accommodate ships, sorry, a train that carries those large containers, usually double stacks. So, the estimates that the project has put forward when they talk to the Army Corps of Engineers about it is that it would cost $1.4 billion just to fix that rail line, another billion dollars to build the terminal, another $550 million to dredge the to dredge the bay, to make it deep enough to accommodate the ships. So, all in the estimates that they placed with the Army Corps of Engineers said this is a $4.3 billion project. And experts said you would be spending that money for nothing because the ships wouldn't come and it wouldn't be able to compete with existing infrastructure.
MICHAEL DUNNE: I want to focus in on something that a lot of supporters have talked to you about, or a lot of supporters have talked to many people in public forums and whatnot about, remember when we had such a bottleneck during Covid, and remember even after that, so much, you know, supply chain issues. And I'm kind of curious, because, you know, Covid was a once in a generation, hopefully once in maybe 100-year, shock to the system. You know in your reporting, Are they over-emphasizing that very rare occurrence to make a case here for a port?
NIGEL JAQUISS: I think they are. So, two things: One is that you know the guy who runs the port in Seattle, Tacoma, who's been in the shipping business for 40 years, said it's the only time I've ever seen that happen. Others said it's the only time I've ever seen it happen. And it actually shouldn't have happened, because it was almost an artificial shortage that people you know, for health reasons, work, but they could have gone to work. In other words, the shutdowns that we experienced in the shortages of products that we experienced, really didn't result from a lack of capacity. They resulted from the fact that people who could have gone to work didn't go to work. So people are skeptical that we'll. See that kind of dislocation again, and extremely skeptical that you would spend, you know, $4.3 billion for something that is such a rare event and probably could be managed differently if it were to happen again.
MICHAEL DUNNE: And is there a bit of a fairly sizable sort of delta between what backers of the project claim it's going to cost, and what again, the experts that you talk to claim it will actually cost?
NIGEL JAQUISS: Well, it's interesting. I was in Eugene about a month ago to see the backers of this project. It's called the Pacific Coast intermodal port, and it's a joint venture between the port of Coos Bay and North Point development of Kansas City. So, they put a big slide up on the screen that says, you know, anticipated cost $2.3 billion and that's what you would find on their website if you were to go there today. And I said to the to them later, hey, you told the Army Corps of Engineers it was going to cost $4.3 billion that's a huge difference, almost double. And they said, Well, it's kind of a worst-case scenario. And I guess I would say that I've watched the quarter in Oregon for nearly 30 years. I've seen a lot of public projects. I've seen a lot of projects that are built in difficult locations. They never come in at budget. They always come in over budget. And we're talking about, you know, we're talking about dredging and some of the most environmentally sensitive waters in the United States. We're talking about, as I said, at 122 water crossings. Those are all. Those all come with great environmental sensitivity and difficult engineering challenges. We're talking about nine tunnels that were, you know, in some cases, built 100 years ago, never anticipated accommodating trains of this size. So, it's a very, very complicated project, and I think that anybody would recognize, with all that in water work, that you're going to have a lot of unanticipated costs. So yes, there is a very big delta between the publicly advertised price and the price that the project backers have submitted to the Army Corps of Engineers.
MICHAEL DUNNE: I've talked to our senators, and I've talked to Val Hoyle, and certainly, one of the things that they tout, and I think as elected officials love to tout this, is this is a project they say that will create a tremendous amount of jobs in that area and I want you to go even further into your reporting about how many jobs this would create, and would they be sustainable jobs that would just, you know, not just be the original construction. Would they maintain I mean, given that it could be that, and you use this word several times in your reporting, as other people have said to you, a boondoggle, you know what is best you can tell in terms of, you know what this project, in terms of job creation, mate might actually bring to fruition?
NIGEL JAQUISS: So, when this project was originally pitched back in December of 2021 the projections were that it would create 250 construction jobs. Okay, I mean, so what we're really talking about here is dredging, which doesn't require a lot of labor. That's trench in the bottom of the bay. We're talking about building a container terminal, which is essentially a big flat piece of ground where you unload boxes and put them onto a train, and you have some very limited warehouse capacity, some railroad tracks and so on. Again, not a hugely labor-intensive undertaking. You're talking about building this, or rebuilding this 110-mile rail line gene that, again, requires labor, but not a huge amount. So, it's very unclear to me how the number went from 250 construction jobs to 2500 that's 2500 was the same number they used to use for the Jordan Cove LNG terminal. I asked to see the underlying data. It was a thin, five-page study. Frankly, anybody who's ever looked at or reported on economic development projects has seen these kinds of projections. I don't place, nor did anybody I talked to place a great deal of faith in those numbers. Then they would talk about something along the lines of 2500 permanent jobs. I asked where those numbers came from. They pointed to a large shipping terminal called Prince Rupert in northern British Columbia. But that's a much that's a much larger operation. They've got oil, they've got coal, they've got wood products, they've got passenger ships, they've got bulk terminals, and they have a container terminal, and still they, they employ about 1700 people there, so that, I think it's conservative to say that the job projections are very optimistic. And again, those job those job projections, particularly for the permanent jobs, rely on a faulty premise. And that premise is that this capacity is needed, that there is not enough capacity. I think it's beyond any shadow of a doubt that there is already surplus capacity on the west coast for container shipping, and there's a lot more on the way. So, I really deeply understand or feel for the people in Coos Bay and the surrounding regions. They used to have a lot of mill jobs there. Those were good family wage jobs, and they went away, and they haven't been replaced by the equivalent pay or benefits. And I really understand why people would want those jobs to come back, but wanting them to come back and actually having that happen are not the same thing.
MICHAEL DUNNE: Yeah, you've also mentioned a little bit about the potential environmental impacts of this project. I think it's easy to think about dredging a bay as just displacing a lot of earth under the water and stuff, but it's probably a lot more complicated than that. Could you talk a little bit about some of the environmental concerns of this project if it were to go forward?
NIGEL JAQUISS: Sure. So, in Coos Bay, there is what's called the south slough, and that was the sort of first federally managed, designated and managed estuary in the country. It became sort of a model for 30 other National Estuary projects up and down the east and west coasts and the Gulf Coast, where they have singled out areas for their specific environmental importance, their breeding grounds, for fish, for crabs, for all sorts of wildlife. They're incredible habitat that's a very rich area because whose Bay is served by a number of rivers and streams, and the bay itself, as separate from the south slough, is a rich habitat for both recreational and commercial fishing for oysters, because it's full of eel grass that provides habitat for, you know, for juvenile of all sorts of species. So, what we're talking about here is moving 20 million cubic yards of sand and rock, and that would have an enormous impact on the species that live in the Bay, on the people who fish in the bay. It would also have an impact because it would be dumped offshore in an area that you know, right off the beaches of Coos Bay, where people fish and recreate. So I didn't focus as much. I hardly focused at all on the environmental impact, not because it won't be large. It will be very large if it were to happen. I think the first question is, does this make economic sense? If the answer is yes, then your question would be, well, what would the economic impact? Sorry, the environmental impact be well, I don't think we got past the threshold question. I don't think this project meets the bare minimum of well, yes, it makes economic sense, so let's talk about how much environmental risk we're willing to take. But it is safe to say that there is a large and highly educated group of local activists, many of them who've worked professionally around the South slough or other parts of the bay, who have very strong concerns that this project would be, would be bad for the environment.
MICHAEL DUNNE: We talked about the political heft behind this project, but as best you can explain to the audience, Sir, what's next? I mean, has reached all the hurdles it needs to, to get approved? Is there still more that needs to be done? Kind of, as best you can, where does it sit right now, and where might it go?
NIGEL JAQUISS: Well, no, there is a lot going on there. There are a couple of major endeavors right now. One is that the project sponsors have hired an environmental, sorry, an economic consulting firm to answer some of the questions that I and others would have, which is, does this make sense from a business point of view? What? What is the case for it to be able to generate enough revenue to pay for debt service or other costs. Who's going to use this port? Because ultimately, the way this would work is that big importers, like a Walmart or like an Amazon or like a target, would say, Okay, we're going to want to bring you know, many, many, many 1000s, 10s of 1000s of containers of manufactured products from Asia, and we think going through Coos Bay is a good idea. So we need to know the people of Oregon whose tax dollars are on the table here, need to know, is there a credible case to be made that those in. Porters would actually say that, and that ships would actually arrive. So that's one of the projects that is now underway. A second is that the federal dollars that I talked about before, about $60 million in grant money, they're going to be using that money to do some preliminary design and engineering work to show the Army Corps of Engineers and the federal government that we can actually do this. This is how it would work. This is what we would have to do that would help them develop a more precise estimate of the costs, and it would lay out kind of a timeline for when the work would be done and when the ships would arrive and when the trains would start rolling. So those are two important pieces of the puzzle that we don't yet have, but the project sponsors expect to be delivering in the, you know, early parts next year.
MICHAEL DUNNE: Fascinating stuff, and we will continue to pay attention to it. Nigel Jaquiss, who's a reporter with The Oregon Journalism Project, talking about the Coos Bay shipping terminal. Nigel, thank you so much for your time and for your reporting.
NIGEL JAQUISS: Thanks for having me on.
MICHAEL DUNNE: That's the show for today. All episodes of Oregon On The Record are available as a podcast at KLCC.org. Tomorrow on the show, you'll hear from a reporter with The Guardian about his story on how an Oregon winery has been upended when ice deported a key leader, and how his daughter is trying to keep the business going. I'm Michael Dunne, host of Oregon, On The Record. Thanks for listening.
