Ambre Energy's PR firm says study is character assassination
A recent study by a Seattle-based think tank says the company behind two proposed coal export terminals on the Columbia River is a high risk start-up that has experienced massive losses and little revenue gain with previous projects.
According to the study by the Sightline Institute, Ambre Energy has lost an accumulated $124 million since it began in 2005 in Australia, experienced massive failure with its only coal mining project in its home country and currently would need to raise about $1 billion to bring its coal export plans to term. The study was based, in part, off of Ambres financial reports and audits.
Clark Williams-Derry, author of the 17-page report, said the company is hemorrhaging money while facing a tough regulatory landscape where strong finances are a key to success if the company hopes to last until the proposed coal export terminals (if implemented) become productive. Ambre has reported $6.6 million in operating revenues and the two planned terminals one in Boardman, the other in Longview, Wash. would cost more than $800 million. Ambre proposes to ship coal by barge on the Columbia River.
Williams-Derry said communities and ports in support of the terminal projects are hoping for job and investment opportunities, but they could be disappointed.
Ambre Energy has described the study as character assassination.
Ambre spokesperson Liz Fuller, of Portlands Gard Communications, called the study just another tactic by anti-coal export groups.
You have to spend some resources in plans and building the project before you see a return, she said, adding that the company has no problem raising funds for their projects.
Like many successful companies today, Ambre Energy has developed quickly from humble beginnings to become an important player in its sector, read a statement from Gard Communications. Its structure allows it to leverage the experience of its executives but be nimble in its approach.
If the terminals are built, Ambre wants to use a deep-water dock owned by the Port of St. Helens at Port Westward near Clatskanie to load coal.
Port Executive Director Patrick Trapp says the Port does examine the financial and work background of a company; however, in this situation, if Ambre does not end up using the dock or uses the dock and then goes out of business soon after, this will not hurt the Port. The agency will simply find another user, Trapp said.
With Portland General Electric dedicated to building another plant at Port Westward and the recent purchase of the Columbia Pacific BioRefinery by Global Partners, both centered around this same dock, it is not critical to the Port that Ambre Energy comes through, Trapp said.
Its being used right now and obviously wed love to keep it going that way and use it, he said. But, if coal plans fell through, this would not be a catastrophe for the Port.
The Port has been developing a strategic business plan to help guide its plans into the future, and does have a general plan to develop Port Westward as an energy-focused park.
But, the plan doesnt designate, We want this company, we want that company, Trapp said. Do you hold out for 20 years for something that may never come?
Tom Sanzillo, director for the nonprofit Institute For Energy, Economics and Financial Analysis, said the risks Ambre faces are not unusual given the volatile global market and poor economy.
They are risks that new entrants and even companies with longstanding performance in U.S. coal products and global trade businesses all encounter, he said during a media presentation.
They must also navigate the distinctly American regulatory, judicial and political process, Sanzillo added. He said established U.S. businesses are often tripped up by the system and experience delays and unexpected costs.
But, he said, The current U.S. coal environment is tough. And this leaves little room for error.
This company does not have the pockets to stay in the game, it looks like, Sanzillo said.
To view the Sightline Institute study online, visit www.sightline.org/research/ambre-energy-caveat-investor. Sightline has also published studies about other coal players in the Pacific Northwest, including Kinder Morgan, which propose to bring coal to the Pacific Northwest.