A long sought after terminal to ship coal internationally from Washington may soon no longer be in the cards. A federal bankruptcy court has authorized the rejection of the ground lease between the Millennium Bulk Terminals-Longview, LLC and Lighthouse Resources Inc, effective this Friday, Jan. 8.
Lighthouse, owner of the Millennium Facility via a debtor, has sought to ship coal off the Washington coast for years; Millennium submitted permit applications back in 2012. The western state, though, never permitted the project and it's since been held up in court. Wyoming is currently involved in litigation hoping to bring the port to fruition.
On Dec. 3, 2020, Lighthouse filed a voluntary petition for Chapter 11 bankruptcy relief. The company has not been able to secure either a buyer or a stalking horse bidder for the terminal. A stalking horse bidder is meant to serve as a low-bar for any future bid.
"Without a stalking horse bid for the Millennium Facility, the Debtors can no longer justify the continued cash outlay to the estates related to operations at the Millennium Facility," read a Dec. 23, 2020 filing in the bankruptcy docket.
In other words, the company can no longer afford to operate the Millennium Assets.
Instead, if Jan. 8 comes without new action, Lighthouse can turn over the terminal to Northwest Alloys, Inc, which currently leases land to Millennium.
Clark Williams-Derry, an energy finance analyst with the Institute for Energy Economics and Financial Analysis, a renewable energy think-tank, said the move could be a way for Lighthouse to put pressure on a behind-the-scenes buyer. Alternatively, he said it could just be the last option.
"Only an unusual last minute maneuver is likely to save the port," said Williams-Derry.
Wyoming has held out hope for the port's construction, despite consistent pushback from both Washington and the courts. On Jan. 24, 2020, Wyoming and Montana filed a motion requesting the U.S. Supreme Court consider claims that Washington unconstitutionally blocked access to coal shipments.
On Oct. 6, 2020, the Supreme Court invited acting Solicitor General Jeff Wall to file a brief expressing the view of the federal government on the case. No brief has since been made public.
The state's legal position has not changed, according to the Governor's office. A representative for Millennium Bulk Terminals did not respond for comment.
Casper Representative Chuck Gray sponsored legislation back in 2019 seeking to engage in a lawsuit over the denial of the terminal's permits. Gov. Mark Gordon vetoed that bill, though eventually took it up.
"That delay made the possibility of Lighthouse's bankruptcy much more likely. However, the litigation continues and we are waiting for a cert decision from the Supreme Court. I remain optimistic about the litigation challenging the unconstitutional actions by the state of Washington," Gray said via e-mail.