Tuesday, December 2, 2008

Strip mine lease renewal calls out foes — Chuitna coal mine idea troubles residents on both sides of Cook Inlet

By Naomi Klouda
Homer Tribune

A small settlement across Cook Inlet at Beluga is hoping a reworked contract between the Kenai Peninsula Borough and a coal company will result in a fresh look at a 21-year-old plan to a strip mine.

The borough owns a parcel of land known as Ladd Landing, where PacRim Coal LP plans to build a dock. From this staging area, PacRim’s plan is to ship in supplies for working the Beluga Coal Fields to extract an estimated 300 million metric tons of sub-bituminous coal over 25 years.

“The borough holds the key to this coal project,” year-round Beluga resident Judy Heilman said. “They lease the land where PacRim wants to build a dock. Once they make a dock, and if they get all the permits, it opens the whole west side of Cook Inlet for coal or any kind of mining.”

PacRim Coal LP, a Delaware-based company, plans to develop what is considered Alaska’s largest coal mine about 10 miles outside of Beluga. The 5,000-acre strip mine, called that because it removes the wetlands-tundra overlay, would sit at the bottom of Lone Ridge in the shadow of Mount Spurr.

About 12 people live there year-round, though the summer population swells to 200 setnetters, sportfishing enthusiasts and commercial fishermen, Heilman said. The settlement sits adjacent to the Chuitna River, nicknamed the “Kenai River” of the west side.

At a standing-room only Kenai Peninsula Borough Assembly meeting Nov. 18, the matter came up under Ordinance 2008-31. That piece of legislation dealt only with extending the Ladd Landing option-to-lease deadline from Jan. 9 to April 9. But it touched a sore spot among constituents who came to register concern about PacRim’s plan to develop a coal deposit along 12 miles of the pristine Chuitna River. Nearby Tyonek residents and Beluga residents have stated they are against the plan proceeding.

Assembly Vice President Pete Sprague said he, too, has reservations about a coal development there, but this ordinance would waive a 90-day requirement that would have made the lease option expire on Jan. 9. That served neither party, he said.

“Both sides are trying to renegotiate the lease,” Sprague said. “I tried to postpone it, (the ordinance), with the intent that if the administration wanted to, it could bring forward a proposal. But that didn’t pass.”

The ordinance asking for the option deadline extension passed in a 6-1 assembly vote.
Many were tuned in to the ordinance on the misperception that what was adopted would eliminate the public comment period, but “that is not the case,” Sprague said. Borough Mayor Dave Carey likewise assured listeners that he wouldn’t allow legislation to revoke the public’s right to comment.

“I have serious concerns about the project but that is not what we were addressing last night,” Sprague said, speaking the day after the meeting.

PacRim’s work ahead on environmental impact statements means the “project is a long way from going forward,” he said.

Borough Land Management Officer Marcus Mueller said the lease contract requires a lot of work. Amendments heaped on revisions have made it complicated.

“We’re working with PacRim to renegotiate the lease. With the Jan. 9 deadline, that didn’t give us much time. Now with the assembly’s actions we have more time,” Mueller said. “At the same time, we acknowledge that it’s likely we won’t have a product ready until April 9. A public comment period follows.”

PacRim pays $40,000 per year to the borough for keeping its lease option open, Mueller said. Since 1987, the project, under various previous owners or merging interests, has paid the borough about $1.5 million.

The contract badly needs “cleaning up” in order to give a fresh slate to negotiations, Mueller said.

Cook Inletkeeper Executive Director Bob Shavelson has concerns about the Chuitna project.

“I think this is a highly complicated matter. For one thing, it’s a lease that is as thick as a telephone book. I’m not confident the borough has the legal, technical and historical capacity to negotiate a complex lease,” Shavelson said.

Chuitna is the most significant land legislation to come before the borough since the previous lease was negotiated, he said.

Year-round Beluga resident Heilman agrees that losing people and public officials with historical knowledge of the project dating back to 1987 is one source of frustration. PacRim’s project manager, Bill Stiles, recently retired and with him went two decades of project knowledge.

To interest the borough in a closer look, Heilman and her husband, Larry, have invited borough assembly members and past mayors to visit the site of the proposed coal mine. An invitation was extended to Mayor Carey at the Nov. 18 meeting.

“Mayor (John) Williams never came. No assembly person has visited here,” she said.
A fellow resident recently called the Kenai Peninsula Borough. The clerk answering the phone didn’t believe Beluga was part of the borough, Heilman said.

“She had to put her on hold until the clerk could figure out whether we are part of the borough,” Heilman said.

As residents of the borough, Heilman said they would like to be heard in this process of a new contract, with protections for the surrounding wetlands.

“The 90-day grace period gives the borough time to look at the lease, to change it some way,” Heilman said. “I say, ‘go ahead an redo the lease.’ The lease has not been restructured for 20 years. It needs to be reworked, and new wording to make new protections for the land and the dock.”

Land manager officer Mueller said he understands residents have “a host of concerns.”
The reality is some concerns can be addressed by the borough, and many of them cannot, he said.

“We’re not a regulatory agency, though regulatory agencies are involved. We have a seat at the table. We’re certainly interested in using that seat wisely,” Mueller said. “There are areas of concern we can address and we’ll be looking at those and seeing how we an influence the project in a positive way.”

Land holding coal deposits is owned by the Alaska Mental Health Lands Trust and CIRI, Mueller said.

The 5,000-acre proposed mine site is just a tip of the project’s impact in the area. More than 55 square miles of wildlife and fish would be impacted, It would go through 11 miles of salmon spawning streams, a first for Alaska, Shavelson said. The process for getting at the coal involves digging 350 feet and pumping water out, as much as 7 million gallons per a day.

According to PacRim information on its proposed project, the coal would be destined for Asian markets.

In a lawsuit last summer, Trustees For Alaska, representing several environmental groups including Cook InletKeeper, had asked the Department of Natural Resources to stop the project.

Alaska attorney Rebecca Bernard said that decision ignored 20 years of research on the wetlands, and strip mining the area could destroy those wetlands. She said the success rate of restoring wetlands is quite low, meaning the operation could yield major flow changes to the drainages — thus affecting the fisheries.

But Irwin’s decision allowed PacRim to proceed with permit applications.

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