UPDATE 1-Canada's largest port approves $15 mln coal transfer project

Thu Aug 21, 2014 5:31pm EDT

(Adds comment by opponents and Fraser Docks)

Aug 21 (Reuters) - Port Metro Vancouver, Canada's largest port, said on Thursday it has approved a new facility to transfer coal from trains onto barges at Fraser Surrey Docks, following lengthy public scrutiny of the project's environmental and health impact.

After a permitting process lasting more than two years and including environmental impact, air quality and other human health assessments, the port said it found no "unacceptable risks" in allowing the $15 million project to move forward.

But opponents of the project say they will look at every possible option to challenge the decision.

"There is one more permit that the project needs to move forward, and that's an air quality permit from the regional government - Metro Vancouver," said Laura Benson a campaigner with the Dogwood Initiative, a non-profit that has been opposing the project.

"We feel pretty confident that unlike the port, which is an unaccountable federal agency run like a corporation, that Metro Vancouver which is led by our local elected officials will stand by our communities," she said.

A spokeswoman for the Fraser Surrey Docks, however, said that it viewed the permit in question as voluntary.

"We are looking into applying to Metro Vancouver for an air quality permit. This is a voluntary move on our part and is not a requirement of the project," the spokeswoman, Jill Buchanan, said in an email.

The Fraser Surrey Docks terminal would handle up to 4 million metric tonnes of coal from the Burlington Northern Santa Fe Railway Co each year, loading it on barges bound for Texada Island, north of Vancouver, where it would be transferred to large vessels for export.

Documents published last year by the port, which is a corporation established by the Canadian government, said the expansion would bring in one more train and two barges each day.

Cheap natural gas and tighter regulation has hurt coal prices in the United States in recent years, prompting more producers to look overseas for customers.

Port Metro Vancouver, which handles some $172 billion in goods traded between more than 160 countries, announced new requirements for the project last fall, including prohibiting on-site coal storage and making barges take extra measures to prevent coal dust from escaping while in transit.

The moves were in response to public concerns about air quality and health issues due to coal dust exposure.

The new facility is expected to begin operating in the fall of 2015, said Jeff Scott, the chief executive of Fraser Surrey Docks, which is the largest multipurpose marine terminal on North America's West Coast. (Reporting by Solarina Ho and Allison Martell; Editing by Paul Simao and Leslie Adler)