HomeMy WebLinkAboutThe ABCs for Understanding Coal in Alaska 2008The ABC’s for
Understanding
Coalin Alaska
3 --
A GUIDE FOR DECISION
MAKERS AND CITIZENS
Overview
_Alaska possesses substantial apostle of coal and with rising oil and natural gas prices, anereasing eaetey demands and rapidly growing Asian markets, there is renewed in- ' terest in Alaska coal as a domestic energy source and as an export commodity. Inter- est in coal is also generated by price. Coal remains one of the most affordable ener ty sources, with a current 2008 price of $65 per ton, or about $2.00 per MMBtu, or Spout 2.5 cents per kilo-watt-hour of electricity generated. However, this renewed interest | is mitigated by a number of factors, including Wall Street’s uncertainty about future carbon taxes, environmental standards and concern over escalating capital costs of coal ‘, projects. Nonetheless, Alaska stands at a vital energy crossroads, and several energy options are on the table, including coal.
: The ABC's for Understanding Coal in Alaska is intended as an introduction to Alaska’s * coal resources for all stakeholders involved in Alaska’s energy future. The ABC’s exam- *' - ines the state’s coal reserves and potential for production, the costs and benefits of coal ‘ mining and combustion, and the viability of new coal technologies such as coal-to- liquids. It is intended to help stakeholders weigh the pros and cons of coal mining and ‘combustion in Alaska and make an informed decision about our state’s energy future. » Independent review through the University of Alaska, Fairbanks was retained to en-
. sure the educational value of this document.
’ Special Thanks
" Special Thanks to Dennis Witmer, Director of the Arctic Energy Technology Developmental °
. L horstory and Professor at University of Alaska, Fairbanks for his review of this document. '.
Special Thanks to Michael Redlinger for his help and research.
' ' } ' I | |
This document was produced by the Alaska Conservation Alliance (ACA). . ACA is the statewide umbrella group for approximately 40 member organiza- “tions with a combined membership of over 38,000 Alaskans.
Table of Contents
Background on Coal
pp. 1-4
Coal Deposits in AK
pp. 5
Coal Mining and Energy Production in
Alaska
pp. 6-8
Coal Development Regulation
pp. 9-10
The Socioeconomic Impacts of Coal
pp. 11-12
Questions to Ask When Considering
Coal Development
pp. 13-14
PHOTO, CREDI Es,
Cover and Pg. 12: Russ Maddox
Pg. 7: Denali Citizens Council
Pg. 10: Damion Brook Kintz
i
Types of Coal
Background on Coal
Coal is carbon rich metamorphic rock that has been transformed from dead vegetation matter through intense heat and pressure over millions of years. The following table illustrates the relative carbon and energy. content of “younger” coals (e.g. lignite) and older coals (e.g. anthracite).
As coal is transformed from lignite to anthracite, its potential for heat pro- duction increases, making it a more desirable fuel source. Fixed Carbon % re- fers to the amount of car on in the coal that is suitable for burning after im- urities such as water, ash and volatile compounds have been removed through eating. Calorific Value refers to the amount of heat released during combus- tion o one pound of coal. Energy Production Grade indicates the coal’s poten- tial for energy production relative to the fixed carbon percentage.
Coal Rank
Fixed Carbon % Calorific Value Btu/lb
Energy Produc- tion Grade
LIGNITE 7,400 LOW
SUBBITUMINOUS 42.4 9,720 LOW
BITUMINOUS 47 - 64.6 1,288 - 15,160 MEDIUM
SEMI-BITUMINOUS 75 - 83.4 15,360 - 15,480 MEDIUM
SEMI-ANTHRACITE 83.8 14,880 HIGH
ANTHRACITE 95.6 14,440
Lignite: “Brown Coal” is the lowest grade coal and is often burned for apatite 1 & steam-electric power generation.
Subbituminous: A lower heat yielding grade than bituminous coal, subbi- tuminous is an intermediary between lignite and bituminous coal. It is mostly used for steam-electric power generation. The Alaska Department of Natural
Resources (DNR) Map of Alaska’s Coal Resources codes most coal in Alaska as subbituminous, including coal currently mined at the Usibelli Mine in Healy, and the large coal reserves at Beluga, near Anchorage.
Bituminous: The U.S.’s most abundant type of coal, according to the American Coal Foundation, it is used mainly for electricity generation and ‘coke production for the steel industry. Alaska’s coal deposits on the north Slope are bituminous.
Semi-Bituminous: An intermediary between bituminous and semi-anthra-
cite, semi-bituminous is smokeless when burned.
Semi-Anthracite: A slightly lower grade then anthracite, semi-anthra- cite coal has a higher heating value though a lower fixed carbon level then the higher ranked anthracite.
Anthracite: The highest grade and most mature form of coal, it is also one of the rarest. Within the United States, it is found primarily in Northeast Pennsylvania and is mostly used to heat homes. :
Electric Power Generation The process of burning coal in a boiler to create steam which is used to turn
turbines and generate electricity has been around since the 19th century. The
basic process is much the same today as it was then, with some increased tech-
nological refinements. The recent revival in coal powered energy has spurred
new developments in how to utilize coal as an energy resource. Eincigiie tech-
nologies such as coal gasification, coal-to-liquids and carbon sequestration are being studied and tested in many parts of the world.
Stoker Bed Combustion: This is the
simplest form of coal combustion, where coal sc ciahiillal
is placed on a grate, and air is fed from be- E : e eee
neath. While this form of combustion is easy f
to do, it is difficult to control the combus- ae ae
tion process, and so this process is generally not used in modern coal fired power plants.
ieee Z
Fluidized Bed Combustion: This form of combustion uses forced air and coarsely crushed coal mixed together in a combus- J tion bed. The mixing of fuel and air results hy in eee better combustion than in stoker beds, but the mass of fuel in the system does Goal Fired Power Plant not easily allow changes in the heat rate of the plant.
Pulverized Coal Combustion: Coal is pulverized or crushed into pow- der to increase its surface area and combustibility, then burned to generate steam that turns turbines and generates electricity. Pulverized coal combustion
(PCC) is the major current form of coal combustion used to generate electric-
ity.
Coal Gasification: Gasification is the process of reacting coal with steam and oxygen to produce a syngas, a mixture of hydrogen and carbon monoxide. The syngas can be used in a gas turbine for electric power generation. Through additional processing, hydrogen can be separated and used for carbon diox- ide-free power production or for fuel cells. The syngas can also be turned into liquid form through the Fischer-Tropsch process and used as a substitute for crude oil in refineries.
IGCC (Integrated Gasification Combined Cycle) Power Plants: Syngas is produced as above, but the turbine system uses multiple stages to recover more energy from the resulting steam. In some plants, the coal is burned with oxy- gen to produce pure carbon dioxide. The high concentration of carbon dioxide in IGCC plants operating on oxygen makes it easier to capture this gas versus conventional PCC plants.
Four IGCC plants are commercially operating in the United States and Europe with government subsidies. In addition to producing 40-50% less solid waste than their traditional counterparts, IGCC plants have lower electricity cost increases then PCC plants. According to an interdisciplinary study conducted
by Massachusetts Institute of Technology (MIT), The Future of Coal, IGCC plants can be constructed that have the capability to add carbon sequestration technologies with an additional energy cost. However, a US Department of
Energy Carbon Sequestration Pere e Rouen? report states that capital costs are estimated to be 27-50% higher for IGCC plants with carbon capture and sequestration systems.
Coal Liquefaction: Liquefaction, or coal-to-liquids (CTL) technology, has been available since the 1920’s, but production of liquid fuels from coal required significant capital investment, and fuels could not be produced at costs comparable with fuels from crude oil during the 20th century. Current prices of nearly $100 per barrel for crude oil are high enough to justify coal to liquids technology. Indirect liquefaction, versus direct liquefaction through the use of heat and high pressure hydrogen, is now considered a potentially economically feasible method of making coal-to-liquid products. A syngas is produced By gasification and then sulfur compounds and other impurities are removed. The gas is condensed and converted into synfuels such as petroleum,
diesel, or chemical feedstocks. The fuels created combust cleanly, are sulphur- free and are low in particulates, oxides and nitrogen.
More carbon dioxide is produced during the full fuel cycle for coal liquids than petroleum and the production costs for coal-to-liquids are significantly higher than synthetic natural gas. Without sequestration, coal-to-liquid fu- els emit 150% more CO2 than crude oil and 175% more than synthetic natural gas, according to MIT’s The Future of Coal.
Clean Coal Technology: The phrase “clean coal” as used by the US De- partment of Energy (DOE) refers only to the elimination of sulfur dioxide, nitrogen dioxide and ash from coal emissions by washing the coal prior to combustion. This terminology came into play when the industry was faced with the challenge of reducing acid rain and does not address coal’s mercury or carbon dioxide emissions.
“THE PHRASE “CLEAN COAL” AS USED BY
THE US DEPARTMENT OF ENERGY...DOES NOT
ADDRESS COAL’S MERCURY OR CARBON
DIOXIDE EMISSIONS.”
Carbon Capture and Sequestration: Carbon capture can happen at both the pre- and post-combustion process of firing coal. Chemical methods for pre-combustion carbon capture use scrubbers with amine solvents, recovering up to 98% of the CO2 in the flue gas. Further research is being performed to use membranes for capturing carbon.
In the post-combustion process, fuel and air burn in a boiler and carbon di- oxide from the boiler’s exhaust can be captured using chemical and physical
solvents, chemical and physical sorbents, and N2/CO2 membranes. ebayer. trace impurities in the flue gas hinder carbon capturing capabilities over an exiendea period: Post-combustion capturing can considerably raise energy costs.
Once the carbon is separated, it is stored through geologic sequestra tion. The carbon can be pipelined to a facility and injected into geologi cal formations including oil and gas reservoirs, deep saline formations,
un-mineable coal seams, oil and gas rich organic shales, and basalts.
Basalt formations offer the possi- bility of eliminating CO2 by trans- forming it into a solid mineral, but more research is needed. Carbon dioxide injected into oil and gas reservoirs can increase the recov- ery of oil between 10 and 20% but may return the carbon to the atmo- sphere once the oil or gas is tapped for production. Deep saline forma- tions have high CO2 storage capac- ities and are more commonly found, but less is known about the ability of saline formations to adequately Coal stockpiles being transferred immobilize CO2. Alaska has a large number of deep saline formations bach on and off shore, as well as an abundant supply of depleted natural gas forma- tions in the Cook Inlet.
Carbon dioxide is expected to be adequately contained through geological se- uestration. The United Nation’s Intergovernmental Panel on Climate Change IPCC) considers it to be very likely (90-99%) that sequestered carbon will re- main so for the next 200 years and estimates a probability that between 66 and 90% of carbon will remain sequestered for 1,000 years. However, according to a U.S. Government Accountability Office report, Key Challenges Remain for
Developing and Deploying Advanced Ener Technologies to Meet Future Needs,
neither industry nor the Department Bf nciny (DOE), “have demonstrated the technological feasibility of the long-term storage of carbon dioxide captured by a large-scale, coal-based power plant.” Demonstrations are currently in progress in Texas that may answer some of these questions.
Carbon capture and sequestration adds considerably to the cost of using coal, as it involves costs for capturing, transporting, and storing carbon. Capture
expenses alone could increase efecteitity production costs by 60-100% at exist- ing power plants and 25-50% at IGCC power plants according to a US Depart- ment of Energy Carbon Sequestration Technology Roadmap report. CO2 trans- Ber euoe costs via pipeline could raise the electricity needs of Bre wet plant y 65%. In January 2008, the DOE canceled its support for the ‘Future Gen Project’, “an initiative to equip multiple new clean coal power plants with ad-
vanced carbon capture and storage (CCS) technology,” due to escalating costs. The coal-gasification demonstration plant is proposed to test ‘clean coal’ tech- nologies PY capturing and sequestering CO2 and is heralded to be the first emission-free coal fired power plant. Industry observers estimated the proj- ect’s cost to exceed $2 billion foe the 275-megawatt plant.
Coal Deposits in Alaska J Anthracite or Semianthracite
Beds of Mineable Thickness
Anthracite or Semianthracite
}Coal
Bituminous Coal Beds of
Mineable Thickness
| Bituminous Coal
| Semibituminous Coal under-
lain by Bituminous Coal
}Subbituminous Coal Beds of ! Mineable Thickness Subbituminous Coal
Lignite underlain by
Subbituminous Coal
Lignite Beds of Mineable
Thickness
Lignite
From: Map of Alaska’s Coal Resources, Alaska Department of Natural Resources, 1986.
wwwdggs.dnr.state.ak.us/pubs/pubs?reqtype=citationSID=2636
The U.S. Geological Survey estimated in 1964 that Alaska possessed roughly
95 billion tons of economically recoverable coal. However, 1986 estimates by DNR put hypothetical statewide coal reserves closer to 5.5 trillion tons. Even
under more conservative estimates, Alaska’s coal accounts for about half of
the nation’s total future coal reserves.
The two main coal deposits are located in the Cook Inlet-Susitna Province
and northwestern portions of the state, with additional resources in the Ne-
nana basin and around Cordova. The Cook Inlet-Susitna Province, which con- sists of mostly subbituminous coal, runs along Cook Inlet and north to De- nali National Park, underlying portions of the state’s most populous region, including Anchorage, the MatanggkerSieitne Valley and the western portion of the Kenai Peninsula. The Cook Inlet-Susitna deposit, with Alaska Railroad and tidewater access, as well as the smaller Nenana Basin deposit are consid- ered to be the state’s more economically viable fields. The northwestern de- posit, which runs mostly from the Colville River north to the Arctic Ocean, is by far the largest deposit in the state and consists of subbituminous and bi-
tuminous coal. hile not considered as Seenorieaty recoverable due to a lack of development and transportation, sections are still being explored by BHP-
Billiton.
Coal Mining and Energy Production in Alaska
Alaska’s extensive coal reserves, coupled with coal’s relatively low purchase rice compared to other fossil fuels, has prompted a new look at coal for both domestic and foreign energy needs. As of February 2008, at least eight Alaskan coal projects were in various stages of planning. Existing and po- tential markets for Alaskan coal include Toe coal-fired power plants, west coast facilities in Seattle and Los Angeles, South American markets such as
Chile and Asian markets in China, South Korea, Singapore, Taiwan, Japan
and India.
Coal Mining in Alaska Alaska has a long history of small-scale coal mining with commercial mines dating back to the mid 1800’s to supply steamships, canneries, homestead- ers and the U.S. military. The rise of oil and gas production and use in the early 1900’s, however, stymied the growth of Kies a’s coal development. The Energy Information Administration calculates that Alaska’s only active coal
mine, the Usibelli Coal Mine, produced about 1.5 million short tons of coal in 2004 and in 2005, dropping to 1.4 million short tons in 2006. The value of this coal in 2006 dollars was just under $49 million. In 2006, more then
352,000 tons of coal was exported to South Korea and 80,000 plus tons to Chile. Another 900,000 tons was sold to six area power plants, according to Alaska’s Mineral Industry 2006: A Summary.
Usibelli Coal Mine holds four active permits and two exploration permits, all within the Nenana fields. The active permits include Two Bull Ridge,
Gold Run Pass, Poker Flats and Rosalie Miues: and the exploration permits are for the Hoseanna and Emma Creek and Healy Valley exploration sites.
From: U.S. Department of the Interior, Bureau of Land Management. East Alaska
Proposed Resource Management Plan and Final Environmental Impact Statement.
East Assts Prosotes RMUPIFIna! B12
a
Nafional es ie ‘ * Coal Fields
Pagk and = at 7m Map 52
‘ina! Environmental
[CT] exnne riannieg ares FRG] com esas sOenerai Land statue
Sint State-seiectes
Sin Ouarserectes me.
0 10 20 40 eo 80 [EE _——— Niles, 1:1,700,000 _1 inch equals 27 miles
Coal Plants in Alaska Coal generates about 9% of the electrical power in Alaska’s Railbelt region, through the following sources:
Healy Clean Coal Power Plant (50 MW)*
Healy Power Plant (28 MW)
Aurora Energy’s Chena River Plant in Fairbanks (28.5 MW)
Clear Air Force Station Plant near Anderson (22.5 MW)
Fort Wainwright Plant near Fairbanks (25 MW)
Eielson Air Force Base Plant near Fairbanks (22.5 MW)
University of Alaska, Fairbanks Power Plant (9 MW)**
Coal Development Projects The Matick Electric Association (MEA) recently tabled a proposed 100
MW coal plant in the Matanuska-Susitna Valley, citing increased building costs as the main deterrent. Additionally, the Home! iteeirie Association
(HEA) has entered contracts to re-start the defunct 50 MW Healy Clean Coal
Plant, though litigation between Golden Valley Electrical Association and
the Alaska Reducer Development & Export Authority (AIDEA) must be re- solved before this can move forward. HEA has also proposed a 100 MW coal fired plant to support a coal gasification unit at the former Agrium fertilizer facility in Nikisks. Goslto-newide has also gained attention with a feasibil- ity study underway for facilities on the west side of Cook Inlet near Beluga/ Tyonek and another facility proposed by Usibelli northwest of Healy. Finally, there have been recent proposals to develop coal-fired energy in Sutton and Seward.
* The Healy Clean Coal Plant (pictured above) owned by the Alaska Industrial Development
and Export Authority is currently not operational but when functioning, could contribute up to 50 MW of power to the energy grid.
** The UAF plant has a peak load of 9 MW that is supplied by 4 boilers, two coal fired and
two fuel oil.
Known & Proposed Coal Projects in Alaska
= «1 Coal Mines in |Chuitna Coal Mine (near Beluga and Tyonek villag-
‘ Development es): Proposed by PacRim Coal LP, their leases cover
Permitting 20,000 acres and contain about 1 billion tons of coal, i but the currently proposed project is for half that I; farea and 300 million tons of coal.
my. Coal Chickaloon Coal Project (near Chickaloon): The Alas-
Exploration ka Mental Health Trust put coal leasing plans on hold in late 2007 after local concerns caused the previous leaseholder to back out.
7 Western Artic Coal Project (near Point Lay): Arctic “ Slope Regional Corporation (ASRC) has entered into ih a 5 year agreement with BHP-Billiton to conduct ex- ‘f ploration on ASRC lands. Measured resources totaled 45 million tons and identified resources totaled 390
; : million tons.
iF Combustion HEA Healy Coal Plant (near Healy): HEA and AIDEA Projects have entered into a Project Development Agreement aimee at restarting the AIDEA-owned Healy Clean oal Plant.
MEA (Mat Su Valley): MEA’s plan to develop a 100 MW coal-fired plant met with strong local opposi- tion, promoting the passage of a local ordinance and an announcement from MEA to delay the project for 5 years.
Agrium “Blue Sky” Project (Kenai Peninsula): HEA has taken the lead in developing the power generation portion of this project, which includes construction of a 100-200 ee power plant to supply power to the Agrium Nitrogen facility and sale of any remaining power to the railbelt energy grid. According to Phase II of HEA’s operational study, the project is expected to be operational by 2011.
Coal to Liquids |Agrium “Blue Sky Project (Kenai Peninsula): Agrium and Coal USA’s proposed coal gasification project would sup- Gasification ply power and feedstock for the plant’s urea and am- monia operations. Recently passed by the Alaska State Legislature, HB 229 provides the Alaska Rail- road with tax exempt bonding authority to raise near- ly $3 billion in capital costs.
Beluga Coal-to-Liquids (Beluga/Tyonek): ANGTL Inc. is proposing a large mine-mouth CTL project on the West Side of Cook Inlet, with a focus on production of transportation fuels. This project is undergoing a feasibility study by AIDEA.
Emma Creek Energy Project (near Healy): Usibelli is exploring a concept for a 200 MW CTL plant at the Jumbo Dome Deposit, which would supply energy to the railbelt.
Coal Development Regulation
Coal Mining Spurred by concerns over the impacts of coal mining, Congress passed the Sur- face Mining Control and Reclamation Act in 1977 to address the impacts of coal mining. Alaska enacted the Alaska Surface Coal Mining Control and Rec-
lamation Act (ASCMCRA) on May 2, 1983, and assumed jurisdiction over coal mining within the state. DNR’s Division of Mining Land & Water, administers ASCMCRA and implements coal mining regu- lations on private, municipal, state and federal land from exploration through operation and
final reclamation. Under ASCMCRA, DNR is authorized to set sensitive lands aside as “un- suitable” for coal mining, though the agency has never made any such designations.
In addition to obtaining an ASCMCRA per- mit, coal mining operations in Alaska gen- erally must secure numerous other permits,
such as the Clean Water Act, Clean Air Act
and determinations under state law. Further, federal agencies are typically required to prepare an environmental impact statement pursuant to the National Environmental Pol- icy Act (NEPA) before issuing federal permits.
For more information:
Bulldozers moving coal stockpiles
www.dnr.state.ak.us/mlw/mining/coal/index.htm
www.dnr.state.ak.us/mlw/mining/2004Reg_ book.pdf
Coal Combustion Coal combustion is subject to state and federal regulatory standards, and any local standards that have been enacted. In addition to federal laws such as the Clean Air Act and the Clean Water Act, both administered by the Environmental Protection
Agency, DNR, Alaska’s Department of Environmental Conservation (DEC), and Fish & Game (ADF&G) administer air quality, water quality and wildlife permits pertaining to coal-fired power plants. For more information:
www.dec.state.ak.us/air/index.htm. www.dnr.state.ak.us/pic/permits. htm Wor Che fetihke cE ub] SAR R/S cecal A reie/aaperinit. cfm
Considerations Surrounding Alaska’s Coal Permitting Process Although coal mining and coal combustion projects are subject to numerous laws and regulations, Alaska’s Perr process has nonetheless raised questions regarding its quality and fairness. These issues raised by industry members, non-governmental or- ganizations and permitting agency personnel include:
* DNR and other state regulatory agencies are understaffed, under-funded, and often lack sufficient training, leading to inadequate state review and oversight. * State and federal regulatory agencies often participate in meetings with project pro- ponents before permit applications are submitted, and members of the public are not usually invited to attend these meetings.
* Surface coal mining laws do not take into consideration downstream impacts or coal-related impacts beyond those immediately associated with coal extraction. + There is no state NEPA process that requires an analysis of alternatives and potential cumulative effects. + Alaska’s laws governing mining do not require regulatory agencies to weigh the full costs of a proposed mine against its purported benefits. * Reclamation bonds or financed assurances often do not reflect the true cost of reclamation.
Potential National Legislation Regarding Carbon Emissions Coal will likely be subject to a national cap and trade system or a carbon tax in the near future. This will increase the cost of coal relative to other energy sources. Since
2005, both the U.S. Senate and House have introduced several bills to establish an economy-wide, greenhouse gas reduction cap and trade system. Some bills also impose a carbon tax. A cap and tage system, similar to that enacted to address acid rain in the 1990’s is more likely than a Sabon tax.
In a cap and trade system, Congress sets overall reduction goals for certain pollutants, and phases in those reductions over time. Industry must meet those reductions, either exclusively through cuts in their own emissions, or by cuts in their own emissions to- gether with purchasing emission offsets from others. There are two major pieces of cap and trade legislation before Congress at this time: The Low Carbon Economy Act of
2007 (S.1766), which is co-sponsored by Senator Stevens and Senator Murkowski; and the America’s Climate Security Act (S.2191), which is primarily sponsored by Senators Lieberman and Warner.
A carbon tax is designed to help address external costs caused by emissions, most nota- bly costs associated with global warming. There are two carbon tax bills currently be- ing considered in the US tauee of Representative Ways and Means Committee. They
are the Save Our Climate Act (H.R.2069), sponsored by Rep. Pete Stark of California and Rep. Jim McDermott of Washington and the American Energy Security Trust Fund (H.R.3416), sponsored by Rep. Wohi Gareon of Connecticut. Location of the Proposed Chuitna Coal Mine
10
The Socioeconomic Impacts of Coal
Economic Impacts According to the State of Alaska’s Economic Performance Report 2006, mined coal and peat accounted for approximately $50 million in mineral production value out of a total $2.8 billion for statewide mineral production. The American Coal Foundation calculates a con- tribution of more than $200 million dollars in direct and indirect contributions to Alaska’s economy. Alaska’s Mineral Industry 2006: A Summary listed coal mining as employing 95 individuals, down from a previous high in 1999-2001 of 121 employees. The proposed Be- luga Coal field is projecting employment of up to 300 peak construction jobs and as many as 350 peak operating jobs. The American Coal Foundation also states that Alaskan coal miners have a greater income than coal workers in any other state, earning $86,400 per year. The Institute of Social and Economic Research is also in the process of producin report titled “Economic Analysis of Beluga Coal Gasification Options,” which will include an economic analysis of the use of coal from the proposed Beluga Coal Mine.
The Fraser Institute's Annual Survey of Mining Companies 2006/2007 reveals that only 6% of companies surveyed indicated Alaska’s current taxation regime would be a strong deterrent to investment or that they would not pursue exploration in Alaska for this reason. It also showed that 20% of companies thought environmen- tal regulations would be a strong deterrent or that they would not pursue explora- tion in Alaska due to these regulations.
According to the National Energy Technology Laboratory, the overall quality of Alas- ka’s coal makes it less marketable and cost effective to develop then coal resources else- where, and anticipated federal carbon taxes will add to the cost of coal development. Despite these barriers, if the cost of oil and gas continues to rise, then coal could be- come an increasingly cost effective energy source, especially for export consumption. China in particular is a massive consumer of coal, which provides about 78% of the na- tion’s energy needs. No longer able to produce enough coal to meet its energy de- mands, China has begun to import coat to fuel more then 540 proposed coal fired power plants. In the United States, there is some market concern over coal’s rising capital costs, as well as a fear of diminished future earnings from environmen- tal capers These concerns have resulted in new coal fired power plant projects being canceled, revised or delayed in several parts of the country. In February 2008, several major Wall Street financial institutions, including Bank of America, Citibank and Morgan Stanley, announced new guidelines that raise the bar for fu- ture investments in coal-fired power plants.
Environmental and Social Impacts Mining Impacts: A large portion of Alaska’s coal can be found close to the surface, making surface strip mining the most efficient means for extraction. Strip mining re- moves the overburden, or layers of vegetation, soil and rock between the coal and the surface. Once exposed, the coal is removed then typically crushed and washed prior to transport. Best management practices proscribe sequenced development where mined areas are re-filled, re-contoured and reclaimed as development along the coal seam progresses. Despite newer mining tech- nologies, coal strip mining is inherently intensive land use. Reclamation to provide for pre-development ecological func- tions can be difficult especially in the uniquely cold and wet environments found in Alaska.
Water quantity and water quality are important issues for most mines. The nature of strip mining invariably changes surface water flows in local watersheds, and groundwater resources may also be affected. Most mines wash their coal using large amounts of water to remove impurities before
U1
Coal miners
combustion. The slurry, or product of the washed coal, is then stored in holding
ponds until sediment settles out. The remaining slurry water is recycled for further coal washing, or discharged into surface waters. Discarded coal and other wastes can, depending on the local geology, be a source of acid mine drainage.
Improper storage and transportation of coal can also lead to health impacts. Coal dust aed coal particulates that accompany mining, storage and transport can aggravate re-
spiratory problems, particularly in children. Traditional mechanisms of suppressing
coal dust, such as water sprays, do not work well in freez- ing temperatures. When coal ALgEA EE piles are subjected to heavy rains and snowmelt, toxic heavy metals and other contaminants can leach into nearby waterbodies.
Carbon Dioxide and Global Warming: The Intergovern-
mental Panel on Climate Change (IPCC), a scientific inter- governmental body set up by the World Meteorological Or-
anization and by the United Nations Environment Program, aecemined in their Fourth Assessment issued in 2007 that warming of the earth’s climate is “unequivocal”, that there Seward, AK coal transfer facility is a 90% probability that most of this warming is due to hu- man emissions of greenhouse gases, and that CO2 constitutes the primary contributor to global warming. Phe National Assessment Synthesis Team found Alaska has warmed an average of 4 degrees F in the past 50 years, compared to the national average of 1 degree. Impacts from increased carbon emissions like coal combustion include melting perma-
frost, infrastructure damage, glacial recession, warming salmon streams, disease out-
breaks, species migration, ocean acidification and melting sea ice.
Mercury: Mercury is a potent neurotoxin that poses serious health concerns to humans and wildlife. While mercury occurs naturally, the EPA cites coal-fired power plants as the greatest source of manmade mercury in our environment today. Mercury is a long-lived toxin that can be transported far distances through atmospheric and oceanic currents. Alaska and other polar regions are well-known “sinks” where mercury and other persistent toxins accumulate at higher rates than elsewhere. Once in the food huis mercury bioac- cumulates putting predators higher on the food chain at greater risk. In 2007, Governor Palin announced consumption restrictions for certain larger and older fish due to mercury contamination. According to the State Veterinarian, a suspected source of the mercury in Alaska waters are coal-fired power plants in Asia. Mercury pollution of Alaskan fish could undermine efforts to huekerentty brand and market Alaska seafood as healthy and fresh.
Water and Solid Waste: Coal combustion also produces significant volumes of solid waste (bottom ash, flue ash and boiler slag), which are typically disposed of in landfills or depending on toxicity, used for backfill, cement and other uses. Depending on the com- position of the source coal, coal waste can contain metal oxides and trace amounts of ra- dioactive materials. Recent studies have shown background radiation levels near coal-fired power plants are higher then levels found near nuclear generation plants. Coal combustion also uses large quantities of cooling water, and discharges must be temperature regulated to prevent harm to fish and wildlife.
Other Emissions: Another potent contributor to global warming is methane, a gas that is released during the mining and post-mining handling of coal. Other coal combustion emissions include sulfur dioxide and nitrogen oxides, both components of acid rain. Ac- cording to the American Lung Association, nitrogen oxide is a major source of particu- lates and ozone smog, which can also impact human health. Numerous studies indicate that individuals living near coal-fired power plants are more likely to suffer from respira- tory ailments like ek than those living farther away.
12
Questions to Ask When Considering Coal Development
What questions should locals, citizens, agencies and decision makers ask about the site specific impacts of coal mining and combustion? What do stakeholders need to know in order to make an informed decision? The sam- ple questions below are designed to help citizens and decision makers deter- mine the benefits and drawbacks of coal development in their communities and in Alaska. This list is by no means exhaustive, but should provide an
outline of the pros and cons of coal from an economic, energy, environmen- tal, and social perspective.
Economic Questions * How many jobs are expected from the coal development project, and for how long? What jake will be available directly at the mine? * What is the expected number of local or statewide people to be em- ployed? * Do these jobs require special skills? If so, will training be available? * What is the expected revenue the coal develop- ment project will bring to the community or state? How does this compare to expected rev- enue from the development of other resources? * What are the long term economic impacts to the community and state? * What direct economic impacts are expected, both positive and negative? + What indirect economic impacts are expected, both positive and negative?
* How much will the coal development project cost? What are the funding sources? * Can project proponents quantify the costs of air, water, habitat and human health impacts likely to flow from the project? * How will a new coal plant affect the economic viability of a natural gas pipeline? * How will a new coal plant affect the economic wiabitley of a natural gas spur line to Anchorage and Southcentral?
* Are carbon taxes likely to be enacted in the near future, and if so, what effect will they have on project competitiveness and feasibility? * How would potential carbon legislation ehenge an average utilities us- er’s monthly rate in the highest and lowest cost scenario?
Energy Questions * How much coal or how much power will be produced? * Is this coal for local or foreign markets? + Will natural gas and oil be used to develop the coal? + What are the community’s or state’s projected future energy needs? * What is the projected cost of the energy? * Is the coal development project LeRGed to meet future energy needs? Are there other energy alternatives available?
Environmental Questions * How will the coal development project impact global climate change and what does that mean for the community and Alaska?
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How will the coal development project impact mercury emissions and what does this mean for the community and Alaska? How will coal development affect the natural landscape? Where is the area of coal development? Is it special, sensitive or com Ree in any way? ow will regulatory standards be enforced? Where are prevailing winds expected to carry coal dust and combus- tion emissions? Where will water discharges be released and how will this impact wa- ter bodies including fish and wildlife? What are the potential health impacts? Given the site conditions of the project area are there sufficient regu- lations, permitting processes and local controls in place? What are the long-term environmental impacts to the community and
state? For coal mining, how feasible is long-term reclamation of the site?
For coal combustion, how will solid combustion wastes be handled and disposed? What will the impacts of coal development be to fisheries and wildlife? What does coal development mean for subsistence users, and sport and recreational hunting and fishing opportunities?
Social and Other Considerations Do local community members want the coal development project? What are the eocet nnaer expected to be? Are eney positive or neg-
ative? Will eminent domain be used to condemn a private property right for coal development, and should it be used this way? Who is developing the coal resource? What is their track record re- garding coal development: economic, social, energy and environmental impacts? Is the coal development project to be subsidized in any way and by whom? Is the coal or energy it produces intended for local, statewide or foreign markets? What does Alaskan coal use in foreign countries mean for the
community or the state in terms of economic revenue, social and envi- ronmental impacts? Does the coal development project satisfy Article 8, Section 2 of the Alaska Constitution, which states that, “The Legislature shall provide
for the utilization, development and conservation of all natural re- sources belonging to the State for the maximum benefit of its people”?
Data Sources
The American Coal Foundation. www.teach coal.org
Massachusetts Institute of Technology. The
Future of Coal: Options for a Carbon-
Constrained World. 2007.
http://web.mit.edu/coal/The_Future_of_Coal.pdf
US Department of Energy, Office of Fossil Energy National Energy Technology Laboratory. Carbon Sequestration Mechaolozy oadnis and Program Plan. 2007. www.netl.doe. Boe ee a eesnest pinjecmeupor tole Aun eUOTKousmap. ee gee Boe ir ——— — —=
i i|
| The United Nation’s Intergovernmental Panel on Cli- | mate Change. www.ipcc.ch/ |
U.S. Government Accountability Office Report GAO-
07-106. Key Challenges Remain for Developing and De-
es Advanced Energy Tech-
nologies to Meet Future Needs.
December 2006.
Energy Information Administration. www.ecia.doe.gov/fuelcoal.html
Szumigala, D.J. and Huges, R.A. Alaska Division of Geological and Geophysical Surveys. Alaska’s Mineral Industry 2006: A Summary. 2007.
Usibelli Coal Mine, Inc. www.usibelli.com
Institute of Social and Economic Research.
www.iser.uaa.alaska.edu
National Energy Technology Laboratory. The Arctic Energy Office, Fossil Energy - Alaska Coal. www.netl.doe.gov/technologies/oil-gas/AEO/FossilEn- ergy/AlaskaCoal.html
| State of Alaska’s Economic Performance Report 2006. | Office of Economic Development.
| www.dced.state.ak.us/pub/2006_Performance_Report_ web.pdf
McMahon, F. and Melham, A. Fraser Institute Annual Survey of Mining Companies 2006/2007. March 2007.
Fish Consumption Guidelines for Alaskans. www.epi.hss.state.ak.us/eh/fish/default.htm#guidelines