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<\/p>\nThe developer must now contend with environmental review red tape, as concerns grow over coal dust and health risks.<\/p>\n
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The maze and part of the old Oakland Army Base are seen from this drone view in West Oakland, California, on Tuesday, Nov. 23, 2021. A controversial proposed coal terminal would sit on part of the army base. \u00a0(Jane Tyska\/Digital First Media\/East Bay Times via Getty Images)<\/p>\n
A controversial proposed coal terminal<\/a> in West Oakland was dealt two major blows this week, presenting new obstacles for the Trump administration-backed project.<\/p>\n On Wednesday, a Kentucky federal court threw out a $1 billion lawsuit against Oakland from one of the developers behind the proposed export facility.\u00a0<\/p>\n The company in that case, Insight Terminal Solutions, argued that the city interfered with its plans to build a facility that would process millions of tons of coal, leading to the company\u2019s\u00a0 bankruptcy.<\/p>\n That same day, Gov. Gavin Newsom signed Assembly Bill 40 into law, which requires that developers prepare an environmental impact report before building a large-volume bulk coal facility. The law applies to any such new facility in the state but its author, Oakland Assemblymember Mia Bonta, designed the bill to apply to the so-called West Gateway Terminal project.\u00a0<\/p>\n If approved, more than 13 million tons of coal per year would be shipped overseas from the facility and stored in the open, according to a recent report<\/a> prepared for investors. After lawsuits from the city of Oakland bogged the project down for decades, the Trump administration announced a $75 million investment into the project in June.\u00a0<\/p>\n The project, which would be built on part of the former Oakland Army Base, is being pushed by developer Oakland Bulk Oversized Terminal, and formerly by Kentucky-based ITS, which was contracted to ship the coal out of the terminal.\u00a0<\/p>\n After a years-long legal battle with the city, OBOT succeeded through appeals last year and is still moving forward with the project. But the court drama didn\u2019t end there. In 2025, a Kentucky bankruptcy judge found that Oakland burdened<\/a> ITS, and could owe the company between $230 and $654 million.\u00a0<\/p>\n \nKicked from Kentucky court\u00a0\n<\/p>\n In a higher court, however, ITS\u2019s case ran into challenges.\u00a0<\/p>\n In his decision Wednesday, U.S. District Judge Benjamin Beaton said he chose to abstain from the case because it likely belonged in a California court instead, and vacated the 2025 bankruptcy ruling.\u00a0<\/p>\n \u201cITS\u2019s decision to file an adversary proceeding in bankruptcy court in Kentucky, rather than to sue in the California courts, carries at least a whiff of forum shopping,\u201d Beaton wrote.\u00a0<\/p>\n \u201cThe City of Oakland maintained from the start that this case was improper and should be dismissed,\u201d the Oakland city attorney\u2019s office said in a statement. \u201cThe district court agreed, and we\u2019re pleased with the result.\u201d<\/p>\n Had Oakland been forced to pay ITS, it also could have also pushed the city to bankruptcy.\u00a0<\/p>\n \u201cThis is wonderful news for Oakland, and I think it takes the sword off of their neck,\u201d said Ben Eichenberg, a senior staff attorney for pollution watchdog group San Francisco Baykeeper. \u201cIt\u2019s my hope that what this means is that the city feels it can once again take a stand representing the majority of people in Oakland who do not want this terminal.\u201d\u00a0<\/p>\n \nNew roadblocks and concerns\u00a0\n<\/p>\n Though the coal would not be burned in Oakland, residents and environmental justice advocates worry that coal dust from uncovered trains blowing through the city could add to existing health burdens<\/a>. Parts of West and East Oakland already suffer from some of the highest asthma-related emergency room visits and hospitalization rates<\/a> in the country due to pollution from highways and industrial operations.<\/p>\n Bonta\u2019s Community First Coal Review Act specifically addresses West Oakland\u2019s environmental justice concerns.\u00a0<\/p>\n \u201cWest Oakland residents are predominantly people of color, and the life expectancy for an African American child born and raised in West Oakland is at least 15 years fewer than for a white child born and raised in wealthier Oakland neighborhoods,\u201d reads part of the legislation.\u00a0<\/p>\n Local advocates who have been opposing the development for years applauded the governor\u2019s signing of AB 40.\u00a0<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/10\/GavinNewsomAP.jpg\")
California Gov. Gavin Newsom speaks about his state budget proposal on Thursday, May 14, 2026, in Sacramento, California. Newsom signed AB 40 into law this week, which requires developers prepare an environmental impact report before building a large-volume bulk coal facility.\u00a0(Jeff Chiu\/AP)<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/10\/CoalOaklandGetty.jpg\")
A train loaded with coal approaches the Levin-Richmond Terminal in Richmond, California, on July 23, 2015. \u00a0(Carlos Avila Gonzalez\/The San Francisco Chronicle via Getty Images)<\/p>\n