Company sues Washington state for blocking coal exports to Asia

WASHINGTON (Reuters) - A company that plans to build a coal export terminal in the Pacific Northwest to ship western U.S. coal to Asian markets sued the state of Washington on Wednesday for blocking construction last year.

Lighthouse Resources Inc filed a lawsuit in federal court against Washington Governor Jay Inslee and two state regulators for allegedly violating the U.S. Constitution’s commerce clause by denying permits to allow the company to ship coal mined in Wyoming, Montana and other western states through its proposed Millennium Bulk Terminal to clients in Japan and South Korea.

Lighthouse Resources’ complaint, filed in U.S. District Court in Tacoma, claims that state regulators “unreasonably” refused to process permits to develop a site on the Columbia River where an existing Washington state lease allows coal exports.

The governor’s office confirmed it received the filing and is reviewing it but cannot address pending litigation, said spokeswoman Tara Lee.

Washington state’s Department of Ecology denied a key water quality permit for the Millennium Coal Terminal, blocking what would be the largest coal export terminal in the United States. The agency said the export terminal would cause environmental harm in nine areas, from air quality to vessel traffic.

Lighthouse, a privately held company based in Salt Lake City, says that by rejecting necessary permits, regulators imposed an “embargo” on new coal exports and discriminated against Lighthouse’s efforts to transport coal mined in Montana and Wyoming through Washington.

The commerce clause gives Congress the authority to regulate interstate commerce to prevent economic battles between states.

Lighthouse, which is the parent company of the Millennium Bulk Terminals and whose subsidiary companies own coal mines in Wyoming and Montana, accused Washington state officials of being “philosophically opposed to coal.”

“But that does not give them legal authority to discriminate against this project and block foreign trade and interstate commerce,” Lighthouse Resources Chief Executive Officer Everett King said.

Lighthouse is also seeking a declaration by the court that the state’s denial is unlawful and an order directing the state to continue processing any and all current and future permit applications.

The company also said that since the coal its subsidiaries are mining are on federally leased land, preventing exports to customers in Japan and South Korea keeps the companies from achieving “maximum economic recovery for minerals.”

The Millennium Coal Terminal is the last of six proposed coal terminals in the Pacific Northwest that was denied approval by state regulators or the U.S. Army Corps of Engineers amid opposition from states and the Lummi Tribe, which argued that coal terminals interfered with their fishing rights.

Reporting by Valerie Volcovici; Editing by Leslie Adler and Susan Thomas