Laos dam construction and collapse

A dam under construction in Laos as part of a hydropower scheme has collapsed, causing flooding and damage.

At issue is the Xe-Pian Xe-Namnoy project, a 410-megawatt hydroelectric power project under development for Xe-Pian Xe-Namnoy Power Company (PNPC). PNPC is a joint venture among the government of Laos and construction and power companies from South Korea and Thailand. The project, whose construction costs are estimated at about $1 billion, involves the construction of three primary dams to form reservoirs. Construction of the system was reportedly 90% complete, with commercial operation projected for 2019, and an agreement in place agreement to export 90% of project power to Thailand. The project has been touted for the degree of international investment involved, although some have criticized the project for insufficient local benefits.

From an engineering perspective, the project's primary dams impound water in a large reservoir. The project also includes three auxiliary "saddle dams" near several heads of the reservoir, essentially to prevent the reservoir from spilling down the impoundment's back side as it fills.

A map of the project, found at http://www.pnpclaos.com/index.php/en/project/maps

Project maps posted online by PNPC show saddle dams on three of the main reservoir's western branches.

Another project map found at http://www.pnpclaos.com/index.php/en/project/maps

One of these smaller saddle dams reportedly failed on July 23, 2018, allegedly due to severe rains. Saddle Dam D -- a facility 8 meters wide, 770 meters long and 16 meters high -- was built to support water diversion around the project's reservoir. But the structure reportedly fractured, causing water to spill downstream to the Xe Pian river outside of the project's intended path of water flow. According to the prime minister of Laos, at least 26 people have died and 131 are missing from the resulting flooding, and several villages .

Response and recovery actions are ongoing. The dam collapse highlights the importance of safety in dam construction and reservoir operations, as did the February 2017 failure of the Oroville Dam's spillway in California.

Oregon coal export plans stopped

The United States is one of the world’s top coal producers and exporters, but recent plans to add coal export capacity in the Pacific Northwest have not been fulfilled, as several proposed export terminals have been withdrawn.  Plans for yet another terminal have been scrapped, as yesterday Kinder Morgan Energy Partners LP canceled its proposed Clatskanie, Oregon project.  What does this mean for U.S. coal exports and for domestic pricing?

Kinder Morgan Energy Partners is a publicly traded master-limited partnership,or MLP, focused on pipeline infrastructure.  Along with fellow Kinder Morgan family companies Kinder Morgan, Inc., Kinder Morgan Management, LLC, and El Paso Pipeline Partners, Kinder Morgan claims to be the largest midstream and the third largest energy company (based on combined enterprise value) in North America.  The company owns or operates about 80,000 miles of pipelines and 180 terminals handling products like natural gas, refined petroleum products, crude oil, and carbon dioxide, as well as gasoline, jet fuel, ethanol, coal, petroleum coke and steel. It boasts of operating primarily “like a giant toll road”, and seeks to avoid commodity price risk through a fee-for-service model.

Most coal export capacity in the U.S. is located in the Midatlantic and Gulf Coast regions.  While Asia dominates the world coal import market, major markets for U.S. coal exports include Canada, Brazil, the Netherlands, and the European Union.  The principal West Coast coal export port is Los Angeles/Long Beach, with virtually no export capacity in the Pacific Northwest.  Kinder Morgan had proposed a terminal to be built at the Port Westward industrial park on the Columbia River near Clatskanie.  Yesterday project partner Port of St. Helens stated that Kinder Morgan had announced that it would not be pursuing the project.

Up to six Pacific Northwest coal export terminates have been proposed in recent years, but to date none have been built.  The Kinder Morgan proposal joins a series of other canceled Pacific Northwest coal export plans.  RailAmerica Inc. announced last year that it would not pursue a coal storage and export facility at Washington’s Port of Grays Harbor.  Earlier this year, the Oregon International Port of Coos Bay announced the end of its exclusive negotiating agreement between with Metropolitan Stevedoring Company (Metro Ports) to build a thermal coal and biomass export facility.  With the Kinder Morgan project gone, three potential terminals remain:  Australian  company Ambre Energy’s barge-loading operation at the port of Morrow and Port Westward, Millennium Bulk Terminals’ proposed $643 million dock west of Longview, and SSA Marine’s proposed $600 million coal terminal at Cherry Point.

Whether a coal export terminal will be developed in the Pacific Northwest is uncertain.  If not, it will continue to be difficult for coal produced in the western U.S. to reach the world’s largest demands for coal imports.  China, Japan, South Korea, India, and even the relatively small Chinese Taipei have led the demand for coal imports in recent years.  This opens significant economic activity. At the same time, environmentalists argue that new export projects would contribute to global pollution and greenhouse gas emissions.  Combined with the pressures of the commodity market for coal and other fuels, these dynamics may continue to block expanded West Coast export plans.  As is being argued over the issue of liquefied natural gas exports, whether coal exports are expanded could also have impacts for U.S. coal pricing.