Turn to the nation's most objective and informative daily environmental news resource to learn how the United States and key players around the world are responding to the environmental...
By Stephen Lee
A group of business and government representatives are exploring the possibility of keeping alive a troubled coal mine in northern Arizona.
The Kayenta mine, operated by Peabody Energy, appears likely to shut down at the end of 2019, when the nearby Navajo Generating Station is also scheduled to close. The two are linked because the power plant is Kayenta’s only customer. No rail line exists to ship the Kayenta coal to the outside world.
But now, a group of stakeholders that includes Peabody, the Bureau of Reclamation, and Rep. Tom O’Halleran (D-Ariz.) have come together to study the cost of building a rail extension to a Burlington Northern Santa Fe line 115 miles to the south.
The group’s first step is to identify what a project like this would cost, O’Halleran told Bloomberg BNA. That work is under way now.
“They’re kind of isolated,” O’Halleran said. “The infrastructure is all geared towards pushing two trains of coal a day to the power plant, and that’s not going to be available to them. But is a railroad tie feasible? How much time would it take to build? The delivery system is just not in place right now.”
Environmentalists said a rail extension was unrealistic.
“The coal industry is in a permanent decline, and investors have fled and aren’t coming back,” Bill Corcoran, western campaign director for the Sierra Club’s Beyond Coal campaign, told Bloomberg BNA. The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg, the majority owner of Bloomberg L.P., an affiliate of Bloomberg BNA.
Corcoran also pointed to recent public comments from Hunter Harrison, chief executive of rail giant CSX Transportation, about no longer investing in new infrastructure for coal.
Peabody spokeswoman Beth Sutton declined to comment on the rail spur, but said the company continues working with stakeholders that would allow NGS to stay open “well beyond 2019.” That includes “engaging a globally recognized firm to identify a new ownership structure,” Sutton said.
O’Halleran also said the possibility of building a coal gasification plant to replace the Navajo Generating Station is on the table, corroborating statements made by Navajo Nation presidential spokesman Mihio Manus to Bloomberg BNA earlier this month.
Those comments have taken many industry watchers by surprise, in light of two recent high-profile stumbles in the coal gasification industry. Duke Energy’s Edwardsport coal gasification plant in Indiana cost $1.5 billion more than originally planned and still doesn’t run reliably, according to David Schlissel, director of resource planning analysis at the Institute for Energy Economics and Financial Analysis (IEEFA).
More recently, Mississippi regulators concerned about the rising costs of Southern Co.'s Kemper plant ordered the company last month to transition the plant to natural gas.
On Aug. 11, the IEEFA said coal gasified power at Edwardsport costs $64.40 per megawatt hour, compared to $44.37 at the Navajo Generating Station.
“The federal government should stop feeding fantasies about gasifiying or exporting coal and start investing in a diversified economic transition that has a plausible future,” Corcoran said.
To contact the reporter on this story: Stephen Lee in Washington at email@example.com
To contact the editor responsible for this story: Rachael Daigle at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)