SALT LAKE CITY (AP) — Several environmental groups are calling for a federal investigation into Utah's plans to invest $53 million in a proposed expansion of a California port to export coal to Asia.
The funds from federal mineral royalties are intended for local public works projects, but would instead be loaned to four counties for the proposed Oakland Bulk and Oversized Terminal.
Keith Heaton is the board chairman of Utah's community impact fund that is involved in the project's financing. He has said the funding plan is not unusual.
Groups including the Center for Biological Diversity and Sierra Club questioned the legality and ethics of the plan in a 19-page letter to U.S. Attorney General Loretta Lynch and others.
"The contents of this letter require an external review by several oversight bodies. . The economic, fiscal, financial, environmental, governance, ethical and political red flags raised by the state of Utah's actions are too numerous to ignore," Tom Sanzillo, an executive with the research group Institute for Energy Economics and Financial Analysis, which supports reducing coal dependence, said in a statement.
Legislators approved the investment earlier this year.
"This appears to represent the worst kind of corporate cronyism that members of the Utah Legislature are usually so fond of rallying against," Joshua Kanter, board chairman of the Alliance for a Better Utah, said in a news release. "Diverting these funds is not only improper, but will leave these communities without the money they really need to help them retool their economic base as the coal industry continues its decline. There has been no showing that there is a shortage of available port capacity for Utah coal or that exporting Utah coal to Asia makes economic sense, either of which is easily addressed by the free market without this shell game and abuse of the public trust."
Activists and politicians in the Bay Area are working to block coal from passing through the terminal.
Supporters say a boost in coal exports is what the troubled industry needs.