Chuitna River mine
The Chuitna River mine is a suspended coal strip mine 45 miles west of Anchorage, Alaska, on the Cook Inlet. PacRim Coal hopes to extract 300 million tons of low-sulfur, sub bituminous coal over 25 years (12 million a year), making the mine Alaska’s largest coal strip mine and the third largest in the United States.
Plans call for building the surface strip mine, as well as a road, a conveyor system to transport coal, housing, an air strip, a logistics center and an export terminal with a 10,000-foot trestle into Cook Inlet. Most of the coal would be shipped to Asia for burning in power plants. 2010 plans filed with the state Department of Natural Resources show the coal would be crushed and transported 12 miles by conveyor belt to a storage and loading site at Ladd Landing. Up to 500,000 metric tons of coal would be stored there. A dock extending two miles into the inlet would shuttle the coal to freighters several times a week.
The mine is opposed by a number of citizen action and environmental groups under the umbrella of the Nobasscoal coalition.
- Sponsor: PacRim LP
- Parent Company: Petro-Hunt LLC
- Location: Beluga and the Native Village of Tyonek, AK
- GPS Coordinates: 61.0696571,-151.1763701
- Status: Suspended
- Production Capacity: 2 Mtpa, increasing to 8 Mtpa
- Total Resource: 1 billion MT
- Mineable Reserves: 771 MT
- Coal type: sub-bituminous coal
- Mine Size: 30 square miles (78 km2) potential
- Mine Type: Strip Mine
- Start Year:
- Source of Financing:
The Chuitna River mine (Chuitna Coal Project) is a proposal of PacRim LP, a Delaware-based corporation, which holds a state lease to 20,571 acres of Alaska Mental Health Trust property where an estimated 1 billion metric tons of low-sulfur, sub-bituminous coal is thought to exist. Proven reserves are reported to be 771 million tons. The company is in the advanced stages of state and federal mine-permitting processes. PacRim has surveyed three Logical Mining Units, or LMUs, within its lease. If permitted, the company has said it plans to extract up to 12 million metric tons of coal from the first of these units over a minimum period of 25 years. Other LMUs, could be developed in future years.
The surface coalmine itself could eventually spread to cover 30-square miles, but the project also would include assorted support facilities, a mine road and a 12-mile-long, covered conveyor system to transport coal to Cook Inlet at Ladd Landing where a port facility would be built. Ladd Landing is property owned by the Kenai Peninsula Borough and subject to a lease-option held by PacRim. A letter of intent to exercise the Ladd Landing option was filed by PacRim in March, 2009. For more, see Lease-Option History section below.
Only about 10 percent of Alaska's electricity is generated by coal, all of which is produced by the Usibelli Coal Mine, near Healy, Alaska. That operation supplies six Interior Alaska power plants and ships its surplus overseas. Currently, Alaska's coal-fired generating capacity has no need for the coal that would be produced at Chuitna. Thus, coal extracted from the Chuitna project would most likely be shipped to Asian markets, including South Korea, Japan and Mainland China, with other possible markets being Mexico and Chile.
Interest in exploiting the resources in the Beluga Coal Fields has waxed and waned over the decades since the late 1960s, with the lease passing through a succession of corporate hands. The proposed Chuitna Coal Project has both proponents and opponents and is becoming increasingly controversial in the Cook Inlet region.
The proposed Chuitna Coal Project mine site is located within PacRim's lease area designated as follows: Sec 14, 15, 21-28 and 33-36, T13N, R12W, Seward Meridian.
Land within and around PacRim's lease area is owned by a variety of entities, including the State of Alaska, the Alaska Mental Health Trust Authority, the Kenai Peninsula Borough, the Tyonek Native Corp. Cook Inlet Region, Inc.|Cook Inlet Region, Inc. (CIRI), and private owners. The state of Alaska owns about 132,500 acres(including mental health lands), and coal leases have been issued on some 46,000 acres, including the 20,571 acres leased to PacRim. Two state wildlife refuges are near the project zone. They are the Susitna Flats Wildlife Refuge to the northeast, and the Trading Bay Wildlife Refuge to the southwest. According to the state, neither would be affected by the mining project. Tyonek Native Corp. owns more than 40,000 acres to the southeast. CIRI owns a scattering of properties around the mine site. The Kenai Peninsula Borough ownes 16,800 acres south of the mine lease boundary and a small area of land around Beluga and Ladd Landing. Private land is mostly along the Cook Inlet coastline in Beluga, Tyonek, as well as at North Forelands and south of Granite Point, which are coastal locations south of Tyonek.
The Kenai Peninsula Borough-PacRim Ladd Landing lease-option document shows that in 1987, the borough entered a lease-option agreement with Tidewater Services Corp, which merged with Midgard Energy Co., in 1994. That year, Midgard assigned its option to Richard Bass, William Herbert Hunt, and William Herbert Hunt Trust Estate. The option was extended multiple times through years while coal mining in the state lease area remained financially impractical. Early in 2008, Bass, Hunt and the Hunt Trust Estate assigned the Ladd Landing option to PacRim Coal LP. In March 2009, PacRim signed a letter of intent to exercise its Ladd Landing option. As of April 2009, the Kenai Peninsula Borough's Land Management Office had begun the process of bringing that lease to closing under the existing 1987 terms, a process that had to be completed within 180 days. According to borough officials, the two sides will renegotiate terms they've mutually agreed are outdated and in need of revision.
No roads connect the project area to Alaska's highway system. The areas is accessible only by sea and air. Airstrips exist at Beluga and Tyonek. PacRim proposes to build a third airstrip in the project area. Conoco Phillips has a private strip south of the Beluga Power Plant. Gravel roads connect Tyonek and Beluga, and there are remnants of old roads used for logging, oil, gas and coal exploration efforts. Barge landing areas exist at Ladd Landing, Tyonek and Granite Point, and are used to supply local residents.
Risks of development
Extracting coal from the Beluga Coal Fields is an idea decades old, but several factors have so far discouraged construction, including the costs associated with developing a mine, the market price of coal, the lack of demand for coal in Alaska, among others. In recent years, opposition to mining the fields has grown, specifically with respect to PacRim's Chuitna Coal Project, the project most advanced in state and federal permitting processes. Many Alaskans, including fisheries biologists, are voicing opposition because of the mine's proposed location amid environmentally important wetlands and because of the nature of coal itself. Critics charge that development would devastate more than 30 square miles of critical wildlife habitat and destroy 11 miles of salmon spawning streams. There is no precedent in Alaska for permitting mining in active salmon streams, and no guarantee that post-mine mitigation would restore the ecosystems. Chuitna would be the first if permits were granted. Regarding coal itself, the U.S. has about a quarter of the world's reserves; its been called the Saudi Arabia of coal. U.S. coal-fired power plants generate roughly half the nation's electricity, according to the United States Department of Energy. But coal is problematic. It is dirtiest of fossil fuels, and burning it produces a third of the nation's carbon dioxide (CO2), a greenhouse gas contributing to climate change.
Chuitna's developers predict mine construction and operation will produce between 300 and 350 good-paying jobs, and royalties to the state upwards of $350 million over the 25-year lifespan of the first Logical Mining Unit project. PacRim also expects numerous service contracts with the local business community. PacRim will develop Ladd Landing as a port (see above) for loading large vessels that would transport the coal to Asian markets. That port could be important for the future development of public and private property on the west side of Cook Inlet. The 300 million tons PacRim expects to excavate from its Chuitna mine is thought to equal two-thirds of the total recoverable coal in the Beluga Coal Fields. Some estimates put the total at around 500 million tons. If the transport infrastructure to Cook Inlet is built, it is likely that, over time, coal mining in the region would expand.
Environmental issues of the mining phase
If permitted, the Chuitna River mine would be the first strip mine in Alaska excavated directly through salmon spawning habitat. In August 2009, scientific reports commissioned by an environmental law firm in Anchorage concluded that the proposed mine would cause irreversible damage to local wetlands and headwater streams in the area, as well as to salmon fisheries. PacRim's Clean Water Act permit states it would discharge on average 7 million gallons a day of coal waste and runoff into the Chuitna River.
2006 revisions to PacRim's National Pollutant Discharge Elimination System (NPDES) filing with the Environmental Protection Agency (EPA) shows the company expects to discharge more than 7.4 million gallons of mine area runoff daily into salmon-bearing tributaries of the Chuitna River, including Creek 2002 (Lone Creek), Creek 2003 (Middle Creek) and Creek 2004. That effluent would reach Cook Inlet. The NPDES documents demonstrate that PacRim anticipates a variety of discharge pollutants, including organic carbon, assorted suspended solids, ammonia, nitrates, oil and grease, and metals including aluminum, iron, and manganese. In addition, housing and other operational facilities would be expected to discharge small amounts of fecal coliform and residual chlorine. According to the NPDES filing, PacRim would build four sedimentation ponds to remove some suspended solids. Three ponds would receive runoff from areas affected by mining operations, the fourth would receive runoff from mine facilities. Four outfall locations would discharge effluent to the fresh water creeks, waterbodies that support all five species of Pacific salmon, as well as Dolly Varden and trout.
PacRim's mining project would carve through more than 11 miles of Middle Creek. To date, no permit allowing mining operations to mine through and destroy a salmon stream has ever been issued by the Alaska Department of Natural Resources. Such a permit would be precedent-setting. Alaska has strict laws governing the protection of natural systems such as salmon streams. A clean, clear-water environment is crucial for successful natural salmon rearing. How those laws might be applied during the permitting process remains to be seen.
PacRim's planned port at Ladd Landing would affect existing shoreline salmon set net fishing sites and the coal-loading trestle necessary to reach deep water would have an impact on fish migration zones and the habitat of an endangered species of beluga whale (Delphinapterus leucas also known as white whale) that is distinct to Cook Inlet. Under provisions of the 1973 Endangered Species Act, the National Marine Fisheries Service placed the Cook Inlet species on the nation's Endangered Species list. What effect that may have on permitting PacRim's port facilities has yet to be determined.
Post-mining environmental concerns
Repairing the damage surface strip mining leaves behind is costly and a considerable physical enterprise. A specific federal law governs such recovery phases, and would apply to a Chuitna Coal Project. It is called the Surface Mining Control and Reclamation Act of 1977. The act created the Office of Surface Mining within the U.S. Department of the Interior. State programs - in Alaska's case, the Alaska Division of Mining, Land & WaterCite error: Invalid
<ref> tag; invalid names, e.g. too many - generally regulate mines, but among the OSM's jobs is inspecting state programs to ensure they are meeting federal requirements.
Water protection petition rejected
On October 24, 2011, the state of Alaska rejected a petition seeking to declare state lands within the Chuitna Watershed as unsuitable for coal mining, a petition that the Chuitna Citizens Coalition and Cook Inletkeeper had submitted in January 2010. Part of PacRim's plan calls for the removal of 11 miles of Middle Creek, a tributary deemed by the Department of Fish and Game to be significant to salmon spawning in Cook Inlet. The company claims it would be able to restore the stream after more than 25 years of the mine's operation. The AK Department of Natural Resources ruled "that reclamation is technologically feasible."
Benefits versus costs of mine
A 2011 report by the Center for Sustainable Economy, "Chuitna Coal Project - economic damages to Alaska likely to be far greater than benefits" compared the revenue that would be obtained for the state if the mine is developed versus if it is not developed. Based on publicly available information, the report compares the net revenues PacRim will most likely receive from the sale of Chuitna coal on the Asian market; the jobs, income and tax revenues received by Alaskans with the cost of developing and operating the mine and transporting the coal to Asia, and the cost associated with lost fisheries, wetlands, forests, marine areas, air pollution and carbon emissions. The report determined that "Under the most optimistic scenario, Alaskans may receive roughly $50 million a year from the mine in direct and indirect income and tax revenues," said Dr. John Talberth, a Center economist and lead author of the report. However, a conservative estimate of costs to Alaska from lost fisheries and lost economic values associated with forests, wetlands, rivers and marine ecosystems destroyed by the project is almost $77 million a year, or at present value, nearly $2.1 billion over 50 years. Taking an even broader view of costs and benefits, and taking into account PacRim's revenues as well as carbon and air quality damage where the coal will be burned, social costs are likely to exceed benefits by a factor of 3 to 6, according to Talberth.
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