THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, March 9, 1995 TAG: 9503090391
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY SCOTT HARPER AND CHRISTOPHER DINSMORE, STAFF WRITERS
DATELINE: NORFOLK LENGTH: Medium: 97 lines
After fighting five years for the right to build a huge coal storage yard in Isle of Wight County, Norfolk Southern Corp. announced Wednesday that it doesn't need the facility, at least not right away.
The decision to indefinitely delay the $100 million project surprised just about everyone - except those in the coal export business. Since the storage yard was first proposed in 1990, overseas demand for coal has softened dramatically.
``Actual construction will only begin when we feel the market has come back to the point that the facility makes sense,'' Norfolk Southern spokesman Bob Fort said Wednesday.
The Norfolk-based railroad, the largest company in Hampton Roads, had just received the last of many government permits required to build the sprawling project, which for years has faced considerable fire from environmentalists.
Led by the group Citizens Against The Coal Storage Facility, opponents have argued that the project lies precariously close to two key drinking-water reservoirs that serve thousands of homes in South Hampton Roads.
Most opponents cheered the announcement Wednesday, even though the company stressed thatit still intends to build the project, planned on 1,600 acres of woodlands and wetlands about one mile east of Windsor off Route 460.
``At best, it's a reprieve,'' said Art Whitener, vice chairman of the citizens group. ``But I'm still pleasantly surprised. At least I don't have to live under this thing for a little while more.''
Despite such criticism, the project enjoys broad support from local businesses and county officials, who view the facility as an economic boon that will deliver jobs and industrial diversity to rural Isle of Wight County.
Norfolk Southern's decision to delay was based on the business climate, not lingering environmental concerns, Fort said.
``All the environmental issues were cleared up in the permitting process,'' he said.
The company has received its government permits from the U.S. Army Corps of Engineers and the Virginia Department of Environmental Quality, the last of which was issued by the state in February.
Norfolk Southern will start building the facility when the export market for U.S.-mined coal rebounds. Fort would not speculate when that might occur. The railroad has already invested ``millions of dollars'' in buying land and in engineering costs.
Construction needs to begin soon or some permits will expire. A state air-quality permit, which already has been extended once, becomes void next March. It could be extended again, but that would open the door to a new round of public comment and legal wrangling.
Other permits expire in five to 10 years, state and federal officials said.
The facility would serve as a storage yard for the railroad's Lamberts Point coal-loading docks on the Elizabeth River in Norfolk. It could hold up to 40 million tons a year in huge piles, screened from nearby homes by forests that the company has agreed to conserve.
Pressed by the Environmental Protection Agency and the U.S. Fish and Wildlife Service, Norfolk Southern also must restore 213 acres of wetlands and preserve 696 acres of forests.
The company also must install large basins designed to catch and filter watery runoff from coal piles that might otherwise reach the two reservoirs - Lake Prince and Lake Cohoon.
The storage yard drains into freshwater swamps that feed the reservoirs, which provide much of the drinking water in Norfolk, Suffolk, Chesapeake, Portsmouth and Virginia Beach.
While local officials say that Norfolk Southern has included sufficient safeguards, environmentalists are not so sure. And they plan to continue fighting the project, despite assurances of safe drinking water.
``Nobody really knows the long-term consequences of this facility,'' said Larry Post, chairman of the citizens group. ``I ask you, Is this a good place to put a coal yard?''
Norfolk Southern was required to investigate other sites, but found the current one is the best from an economic vantage.
As with choosing a site, economics is behind the delay.
When the company announced plans for the facility, coal exports were booming and the railroad was shipping about 40 million tons of coal overseas a year. Its rail lines and the Lamberts Point terminal were operating near peak capacity.
The international economy has since slipped into a recession. Demand for energy and steel, the two products produced with coal, ebbed in Europe and the Far East - Norfolk Southern's principal markets.
In addition, the fall of the apartheid government of South Africa added to the softness of the market. With the removal of trade sanctions, South Africa's immense coal reserves were opened up for export, and they now are flowing.
Norfolk Southern's coal exports fell to 31.2 million tons in 1992 and 24.1 million tons last year.
The market has begun to show signs of firming up. Demand for coal in Europe and the Far East is picking up. Subsidized coal production is being phased out in Britain and Germany, which will make U.S. coal less expensive for European customers. by CNB