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Executive Briefing Book, Alaska Coal 1986
ALASKA EXECUTIVE BRIEFING BOOK FACTS ON ALASKA COAL This Executive Briefing Book is a publication of the Coal Operators and Alaska Leaseholders association (C.O.A.L.) with the assistance of Malcolm B. Roberts & Associates. Its purpose is to provide a reference source for the many issues surrounding the in-state and export uses of Alaska coal. It is hoped that Alaska's decision and opinion makers will find this quick reference format useful as the important issues of Alaska's energy options are discussed, debated, and acted upon in the decades to come. In order that new developments and information can be supplemented to the text, this book is presented in a loose- leaf binder format. From time to time, additions will be provided so that your copy can be kept current. At the time of the first publication of this document in February, 1986, C.O.A.L. has five member companies: Usibelli Coal Mine, Diamond Alaska Coal Company, Placer US Incor- porated, Rocky Mountain Energy, and Hawley Resource Group, Inc. Please note that the Executive Summary is printed in the form of a brochure. For more copies of that brochure or for further information, please write: C.O.A.L., Post Office Box 101, Healy, Alaska 99743. SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION SECTION 8 3 SECTION 10 TABLE OF CONTENTS Executive Summary: "The Coal Option" ALASKA HISTORICAL PERSPECTIVE Significant Events in Alaska Coal Development History of Coal in Alaska ALASKA'S COAL RESOURCE: HOW IT WAS FORMED AND HOW MUCH IS THERE Alaska's Coal Resource: How It Was Formed Alaska's Coal Resource: How Much Is There? Quality of Alaska Coal MINING AND RECLAMATION ECONOMICS COAL AND THE ENVIRONMENT Clean Air Technology Acid Rain Coal and Water Coal and Dust COAL-FIRED GENERATING PLANTS COAL AND ALASKA'S FUTURE What Alaska Needs To Do - Infrastructure The Seward Coal Terminal What Alaskans Can Do - Research Pacific Rim Markets Public Attitudes JOBS IN THE COAL INDUSTRY GLOSSARY BIBLIOGRAPHY AND REFERENCES CITED THE SIZE OF ALASKA'S COAL RESERVES BOGGLES THE MIND ii s State Geologist estimates there could be as much as five and a half trillion tons of coal in place in our state. That means there may be over half as much coal in Alaska as there is in all of the other 49 states combined. That is extremely significant because the United States has the largest proven coal reserve in the world How much coal is readily available for use by our Alaskan communities? For Alaska’s own immediate use, the numbers are large, although not so astronomical. Identified resources within seventy miles of the Alaska Railroad are estimated to be 17 billion tons, of which two to three billion tons can be mined economically at present rhere are four large coal fields that are readily accessible between Fair banks and Anchorage along the Railbelt, where nearly two-thirds of Alaska’s population resides. These are the Nenana, Yentna, Susitna and Matanuska coal fields In addition, the Beluga coal field, located on the west side of Cook Inlet the Kenai field, and the Bering River coal field near Cordova, are close to tidewater and could furnish coal for coastal communi et ties and Southcentral Alaska More remote fields such as Ton zona and Chicago Creek could be tapped for small scale village use. The mmense North Slope field prom ises to be a truly major source of energy sometime in the more dis Chicago Creek tant future Is this coal suitable for Tonzona power generation? Nenana It is ideal. The chemical and phy- Yentna — Susitna ; Matanuska sical properties of Alaska coal make it most suitable for burning to generate steam The majority of the coal in the Railbelt region is subbitumi nous and has a medium to medium- high heat energy content Herendeen Bay 2 __ WHOHAS THE OIL? =m = =WHOHAS THE COAL? (Percentage of world’s proved coal reserves) re (Percentage of world’s proved crude oil reserves) I : fi i aE RU vy “SSe Uv 'h, 4 4 U & Sap, Ang Ung Ray "Pag Mee, Rag eer, ‘S4 Us Usy ° Cony “4 UK “om Gey % Any ayota ANvagn”? HER Meg hare, The United States ranks only eighth in proven oil reserves. But when it comes to coal, the USA has the largest share. ranging from 7,000 to 9,000 British thermal units (Btu’s) per pound. A Btu is the amount of energy it takes to raise one pound of water one degree Fahrenheit. Coals in the Matanuska and Bering River fields boast from 10,000 to 15,000 Btu’s per pound. 15,000 ranks with the highest that can be found worldwide. In addition, and of great importance to Alaskans, our coal is some of the cleanest in the world. The sulfur content of Alaska coal averages less than half of one percent or approximately 0.3%, as compared to eastern American coals, much of which contain 3% to 5% sulfur. How is coal mined in Alaska? Modern surface mining requires large equipment, usually shovels and trucks or draglines, that remove the earth and rock overburden above the coal seams. The coal is loaded into large trucks to be hauled to a power plant or to a stockpile for shipment to the customer. Once an area has been mined, the rock and earth overburden is replaced into the mined area and covered with topsoil. Grading and seeding complete the reclamation and, within two or three years, the land is returned to nearly its original conditions. Much of Alaska’s coal lands are reclaimed for improved wildlife habitat. Willow and other woody plants are introduced to create suitable moose browse ae 6 Trillion Chien 8.1 Trillion 5.5 Trillion TOTAL ESTIMATED COAL RESOURCES Alaska’s identified coal resources total 160 billion short tons. Hypothetical and speculative resources, however, are over half of estimates for the South 48. Sources: 1982 Ferm-Muthig Study for DOE and 1983 Alaska DNR Information Circular 17. COAL MAY BE ALASKA'S CHEAPEST SOURCE OF POWER n the South 48, coal is already the least expensive fuel for the generation of electricity and I currently provides over one-half of all electrical power. In Alaska, approximately seventy percent of the electricity provided by Golden Valley Electric for the northern Railbelt is generated by coal, substantially lowering the cost of electricity that is otherwise produced with expensive diesel fuel. Because of its low cost, coal-fired power generation is also receiving increased attention in the Cook Inlet area Why is coal competitive? The thickness and the geological characteristics of the coal between Fairbanks and the Kenai Peninsula make it conducive to economical mining. Even with the extra expense necessary to meet the new federal surface mining regula tions, production costs are relatively low and human risk and work interrup tions can be kept to a minimum What about the other options? Oil is the most expensive fossil fuel alternative, costing 3 to 5 times as much as natural gas or coal. Natural gas has been the fuel of choice in the Anchorage area for the past two decades because of favor able contracts that were negotiated in the mid-1960’s and because of the compara tively low capital cost of gas-fired genera tion. However, natural gas prices in Alaska are increasing. Most experts expect costs to rise in the next few years to a level where electricity generated by natural gas will G ‘ substantially exceed that generated by coal OIL A Hydroelectric power could furnish an important part of the long range energ LOW B HIGH ESCALAI $5-$6 $1.50-$! needs for the Railbelt region. The n COSTS obstacle to hydro development is the Pa extremely high cost of building dams oS LOW LOW Can coal help keep your COSTS $500 $500 utility bills down? dal Rn a Yes. Without question. The existence of one BOTTOM High tuslicost rules cut erate or more coal-fired plants in a community oil in Alaska’s larger tied to uncertain - LINE communities. prices. adds to the competition and helps keep down electricity rates from other sonrcs,§§ How much electricity do we use? According to the Chugach Electric Association and Anchorage Municipal Light and Power, the region from the Matanuska Valley to Homer used in the area of 2.7 billion kilowatt hours in 1984. The Fairbanks community used 519 million kilowatt hours. What is a kilowatt hour? A kilowatt hour is 1,000 watts of electricity used for one hour. Or, put more simply, it’s the amount of electricity it takes to light ten 100 watt lightbulbs for one hour. The average family in Anchorage uses 25 kilowatt hours a day, or 9,000 kilowatt hours a year. What does a kilowatt hour cost the consumer? The residential consumer in Anchorage pays $0.06 per kilowatt hour for Coal has reemerged the first 1,500 kilowatts hours/month and $0.045/kwh after that. Please note _ nationally as a major . 7 tei ieey oe a aft . a . : — o source of electricity. that Anchorage electricity rates are some of the lowest in the nation because of gy 4990, 5496 of all the long-term natural gas contracts that soon will come to an end. Throughout —_US. electricity will be = 7 vo 5 “aalisean «im os — wee . from coal-fired plants. the rest of the state, especially in smaller, more remote communities, elec- The peason is simple tricity costs are much higher. economics. It costs ° less. Source: U.S. Dept. of Energy. How much electricity will be needed at the turn of the century? A study financed by Chugach Electric Association estimates that the region from the Matanuska Valley to Homer will need 3.7 billion kilowatt hours of electricity in the year 2000, roughly one and a half times the amount i day. ee) being used today. The best way to estimate future need LECTRICITY is in terms of “peak demand.” This ee : means the maximum amount of power needed at any one time. A utility must always have the capacity to supply the peak demand plus a prudent amount of reserve capacity to handle unexpected circumstances. The peak demand in the Railbelt area in 1984 was 650 megawatts. It is estimated by the Federal Energy Regula- tory Commission that peak demand in the year 2000 will be 1,200 megawatts. a LOW & LIKELY TO REMAIN LOW $1.00-$1.50 MEDIUM $1500-$2200 Coal could be the most economical option over the next 30-50 years. “The $3,500 figure is 1985 APA estimate for Susitna project, based on $5.6 billion capital outlay. Others estimate the project will be much more expensive. CLEAN ENERGY FROM COAL... IS IT POSSIBLE? Y ‘ In the past, coal was a major source of air pollution, especially in the midwestern e S. and eastern states. Fortunately, the past is past The pollutants released from older coal plants were mainly particulate matter (fly ash), sulfur dioxide and nitrogen oxides. Since the 1977 amendments to the federal Clean Air Act, all newly-built coal-fired plants are required to install extensive anti-pollution equipment which minimizes the release of all of these pollutants. The positive results have been dramatic. As an example, the National Coal Association reports that these improvements contributed to a 40 percent drop in all U.S. sulfur dioxide concentrations from 1972 to 1982, a period in which coal burning by electric utilities increased by 65 percent Any coal-fired plant built in Alaska now or in the future will be subject to these stringent regulations which require scrubbers to reduce sulfur dioxide and precipitators or baghouses to remove particulates. Coal boilers, themselves, have been modified to minimize the formation of nitrogen oxides. What is a scrubber? A scrubber (or a flue-gas desulfurization system) uses lime or limestone to “scrub” the flue gas and remove the sulfur. It is an expensive device. A 200 megawatt coal-fired power plant in the Southcentral area would require a scrubber costing roughly $35 million. What is a precipitator? A baghouse? The maximum emissions of particulates allowable for newly built coal-fired plants is 0.03 Ib/million [4 | Btu’s. There are two devices that can achieve ee this high collection efficiency: Goal ed Generating Fant ne! the electrostatic precipitator and the fabric filter, or baghouse. Recent breakthroughs inboller design Precipitators impart an elec- otmtrogen odes. = voee : F : tric charge that propels the fly ash towards collecting electrodes. As dust collectors, they can re- move over 99 percent of the par- ticulates in the flue gas The fabric filter or baghouse Peveriet —=¥ feos operates like a vacuum cleaner. ainia, Large fans pull the flue gas system elminates ee : notions | through cylindrical filter bags. In LZZIIS Removes Suitur. NOTE: — Notdrawnto scale. All systems iouontea Bottom Asn many cases, depending on the SOURCE: National Coal Association, Education Division. emission limits and the chemical In the last 8 years, industry has pioneered new technology that is making coal one of America’s cleanest fuels. and ash content of the coal, baghouses have proven to be even more effective and economical than precipitators POUNDS PER MILLION BTU 7 Environmentally, how will the generation of power by coal a compare with the other alternatives? COAL OIL It will create substantially less air pollution than oil and compare favorably with natural gas (see graphic right). The hydro alternative will create no air pollution. But, as with any major project, it will have its own environmental trade-offs, mainly in the areas of land use and wildlife habitat firing and are r than stationary diesel units. What is acid rain? Acid rain is rainfall that has high sulfuric acid and nitric acid content. The con- cern about acid rain stems from the widely held belief that it can raise the acid level of streams and lakes and harm plant and animal life. The major causes of acid rain are thought to be combined emissions from automobiles and older power plants that are not equipped with modern emis- sion control technology. Is acid rain a threat in Alaska? No. Alaska’s coal contains only a fraction of a percent of sulfur, ranking with the lowest in the world. In addition, current state and federal regulations require power plant exhaust gas ‘“‘scrubbing” to remove most of our coal’s already low-sulfur content. By burning low sulfur coal and meeting the emis- sion standards required by the state and federal governments, acid rain will not be a problem here What about carbon dioxide and the “greenhouse effect’’? The carbon dioxide content of the atmosphere has been gradually increasing since 1860 due to a combination of activities, including the burning of all types of fossil fuel. Scientists have divergent views on this phenomenon. Some believe it may lead to an increase in the earth’s temperature of one or two degrees centigrade by the year 2035. Others feel that excess carbon dioxide may be absorbed in increasing amounts by the world’s oceans and will have little effect on temperature In any case, the relatively small amount of coal-fired capacity required to meet Alaska’s power needs will not add significant amounts of carbon dioxide to the earth’s atmosphere. Ne em a eae aa FOR ALASKA... ENERGY FOR THE PACIFIC RIM A strong Alaska coal industry will mean, first of all, a much needed diver- sification of our economy. Long-term jobs (40 to 60 years in duration) will be created for our people, and the ripple effect of these jobs in our com- munities will be substantial Revenues will be generated to help take up the slack if the North Slope oil flow begins to diminish. In addition to the usual state and federal corporate income taxes, mining companies pay a state mining license tax, state produc- tion royalties, property taxes, and land rentals and leases Why do Pacific Rim countries want Alaska coal? The Koreans are already importing Alaska coal. The Japanese are studying it, and the Taiwanese have expressed interest. These coun- tries are actively investigating the Alaska coal situation for five reasons: 1. Alaska represents a secure part of the world and therefore a steady, uninterrupted energy supply. nN Our coal is abundant. We have vast quantities. 3. The low sulfur “clean” character of Alaska coal is a strong sell- ing point. 4. Importing Alaska coal helps offset the imbalance of trade these nations have with the United States. WN . Alaska is the closest Free World source of coal for the rapidly industrializing nations on the Pacific Rim. ELECTRICITY FROM® /VWA\@:\ For more information, please write C.O.A.L. Post Office Box 101 Healy, AK 99743 SAFE, CLEAN & INEXPENSIVE SIGNIFICANT EVENTS IN ALASKA COAL DEVELOPMENT YEAR EVENT 1786 Captain Nathaniel Portlock, English trader, finds coal at Coal Cove (presently Port Graham) on the Kenai Peninsula. 1855 First Alaska coal mine opened by the Russian- American Company at Coal Cove. 1862 First coal mined in Southeast Alaska (Sepphagen mine, Admiralty Island). 1879 Whaling ships and U.S. revenue cutters start us- ing coal from the Corwin mines along the Arctic coast. 1888 Wharf Mine opens near Port Graham. 1898 Yukon sternwheelers use coal as fuel to transport gold seekers to gold fields. 1900 Extension of coal laws to Territory of Alaska. 1902 Yukon River steamers convert coal and wood burners to petroleum-fueled engines. 1904 Enactment of Coal Act, allowing coal claim loca- tions without previous surveys. 1906 President Theodore Roosevelt closes Alaska public land to entry under coal laws due to Pinchot - Ballinger feud. 1911 Cordova "Coal Party" -- imported coal shoveled into the harbor in protest of federal coal policies. Pinchot burned in effigy. 1912 U.S. Navy investigates Bering River field. 1914 U.S. Congress passes Alaska Coal Leasing Act. 1916 Alaska Railroad is built to Matanuska Coal Field. 1918 Alaska Railroad reaches Nenana Coal Field. YEAR EVENT 1922 1924 1926 1940 1942 1943 1946-1954 1968 1973 1977 1985 Completion of 4.4-mile railroad spur up Healy Creek; Suntrana mine established. U.S. Navy begins converting its coal-burning ships to oil. Coal used to power dredges and large placer- mining operations near Fairbanks. Nearly all coal mined in Alaska comes from Evan Jones Mine in the Matanuska Field and Healy River Mine in the Nenana Field. Alaska Railroad re-opens Eska Mine. Coal needed for new Army posts and military airfields. Traditional underground coal mining in Alaska gives way to surface mining methods. Usibelli Coal Mine, Inc. begins stripping coal under U.S. Army license. Alaska Railroad replaces coal-burning engines with diesel locomotives; Eska (Old Eska) Mine closes in Matanuska field. Fort Richardson and Elmendorf Air Force bases convert coal-fired steam power plants to natural gas. Matanuska mines, except for Premier, close. Golden valley Electric Association opens mine- mouth power plant at Healy. OPEC oil embargo and severe winter result in oil and gas shortage and an increased interest in and demand for other energy sources, including coal. President Carter's energy policy includes conver- sion of utilities and industry to coal, prompting renewed interest in Alaska coal. Passage of Surface Mining Control and Reclamation Act. First shipment of Usibelli coal leaves for Korea in January 1985. HISTORY OF COAL IN ALASKA THE EARLIEST USES OF ALASKA COAL The Alaskan Natives and some of the early explorers used coal and oil shales as fuels. The first written record is that of Captain Nathaniel Portlock who discovered and used coal at Port Graham in 1786. The first commercial use of Alaskan coal began in 1855 when Siberian fur traders opened a coal mine at Port Graham for export to California. Although the export market never developed, the mine produced coal for local and maritime markets until 1865. Later in the 19th century, whaling ships and United States revenue cutters used coal from beds near Cape Sabine on the Arctic Coast. At least 16 mines operated on the Yukon River in the 1890's. These mines were all abandoned before 1910 as river traffic decreased and boats converted to fuel oil. COAL AND GOLD WENT TOGETHER Thawing of frozen ground for placer gold mining was done with coal where available, and at least a hundred small mines operated around the turn of the century. Coal "interests" were sold or bartered before the general mining laws of the United States were extended to the Territory of Alaska in 1904. The 1892 sale of Robert Lee's coal interests at Chignik to Alaska Packers Association for $1,765 is one example. Around the turn of the century, in addition to those mines along the Yukon and other navigable rivers, there were mines at Admiralty Island, Herendeen Bay, Chignik, Cape Lisburne, Kachemak Bay, Unga Island, and Chicago Creek. The last, near Candle on the Seward Peninsula, mined an 80 foot thick lignite seam from 1903 until the 1940's, despite attempts by the federal government to shut down the operation, FEDERAL INVOLVEMENT The mineral laws of the United States were first extended to the Territory of Alaska by the Act of June 6, 1900 making it possible to claim coal as a locatable mineral. Many coal entries were made under this Act in the Bering River and Matanuska Valley coal fields by prospectors appar- ently unaware that this law permitted location only on surveyed land, of which there was none in these Alaska coal fields. The Alaska Coal Act of April 28, 1904 allowed location without the precedent government survey, and most of the earlier claims were relocated under this authority. However, because of the accusations of fraudulent claims by "dummy entry-men" on behalf of "East Coast monopolies", all of the claims became suspect. Spurred by a biased Washington press and Collier's Weekly the matter of the Alaska coal claims became a national sensation, and ammunition in the growing ideological feud between Gifford Pinchot, Chief of the Bureau of Forestry and champion of conservationism, and R.A. Ballinger, Commissioner of the General Land Office and later Secretary of the Interior. THE "LOCK-UP" OF 1906 In response to the controversy, on November 17, 1906, President Theodore Roosevelt withdrew all Alaska public lands from entry under the Coal Claim laws. Although initially done under questionable authority, Congress validated the withdrawal in the Act of May 28, 1908. During the Pinchot- Ballinger controversy, the legal processing of the coal claims stopped, leaving the claimants in the unenviable posi- tion of having to do annual assessment work, but unable to remove or sell coal. Under these conditions, most of the claims were abandoned, with only 2 of the 900 claims going to patent. At this time, domestic production supplied only 2% of the territorial coal consumption. The remainder was imported from British Columbia, Australia, Japan or the State of Washington at an average price of $15 per ton. In addition to the many claimants and investors who were financially ruined, consumers buying this expensive imported (and import taxed) coal were understandably unhappy because local coal might have been had for $3 per ton. Pinchot was burned in effigy in Katalla, then a town of several thousand, which hoped to serve as a railhead for Bering River coal. In Cordova the people shoveled several tons of imported coal into Prince William Sound as a "Coal Party Protest". SCANDALS AND DIRTY POLITICS A Congressional investigation found that some of the General Land Office staff had been on a clandestine Bureau of Forestry payroll, allegedly hired to disrupt and delay the Land Office patenting operations. They were also accused of leaking information to Pinchot with which to embarrass Ballinger. Several hundred people lost large sums of money when caught in the middle of these dirty politics. Work ceased on the several coal railroads begun in the Bering River area, and the coal industry in Alaska came to a halt. Between 1880 and 1915, the total reported coal produc- tion of the Territory of Alaska was 70,000 short tons valued at approximately $450,000. This was mainly the production of the Wharf Mine at Port Graham, which produced up to 3,000 tons of coal per year at $3 to $6 per ton, but also included several thousand tons of coal produced from the McDonald Pro- perty on Bering Lake in 1907. Not included in these data is the "pirated" output of the "illegal" Chicago Creek Mine on the Seward Peninsula and that of the mines at Herendeen Bay, Chignik Bay, and Unga Island, and other mines operated within the local and native economy. THE ALASKA RAILROAD In 1914, President Wilson authorized construction of the Alaska Railroad, choosing a route near the Matanuska, Little Susitna, Broad Pass and Healy coal fields. That same year the federal government enacted the Alaska Coal Leasing Act under which mines were developed in McKinley National Park and the Nenana, Matanuska Valley and Bering River coal fields. Also in 1914, the U.S. Navy tested Matanuska and Bering River coal, concluding that the former was suitable, but the latter unsuitable for naval use. The building of the Alaska Railroad to the Matanuska coal field in 1916 and the Nenana coal field in 1918 created both the market and transportation for large scale mine development. Between 1916 and 1940, coal production in- creased steadily to 174,000 tons per year. Most of it came from the Nenana coal field and the Wishbone district of the Matanuska coal field. THE MILITARY MARKET The tremendous military build-up in Anchorage’ and Fairbanks during and after World War II created an incentive for further exploration and development. Additional mines were opened at Healy, Nenana, Jarvis Creek, Broad Pass, Wainwright, Barrow, Costello Creek and the Little Susitna and Wishbone Hill areas of the Matanuska Valley. The price of coal increased about 50%. Most of these wartime ventures were short-lived, but Overall production rose rapidly through the postwar years to 861,000 tons in 1953. The military market grew so rapidly that the switch from coal to diesel fuel by the Alaska Railroad in the early 1950's did not adversely affect the Alaska coal industry. In fact, production continued to increase in the face of this transition, peaking at about 925,000 tons per year in 1966 and 1967. It was the 1968 Congressional decision to convert the Anchorage military bases to gas power generation that signal- led the doom of the last large Matanuska Valley mine, the Evan Jones, and displaced about 100 workers. The only large mine surviving the transition to gas and oil was the Usibelli Coal Mine at Healy in the Nenana field. Until 1985, this surface mine produced approximately 850,000 tons per year subbituminous coal from thick beds, primarily for public utility and military markets in the Fairbanks area, including a mine-mouth power plant in Healy. In 1985, the Usibelli Coal Mine, Inc. began shipments to Korea through a coal-loading terminal at Seward, and the total annual production was about 1,400,000 short tons for both domestic and export markets. LAND STATUS The federal government has classified approximately 33 million acres or about 9% of Alaska as "prospectively valu- able for coal". A significant part of these potential coal lands have been selected by the State of Alaska under the Statehood Act, or by the Alaska Native corporations created by the Alaska Native Claims Settlement Act. Much coal land, however, remains under federal title in the National Petro- leum Reserve. Additional federal coal is contained in the Chugach National Forest, Denali National Park and Preserve, and the Alaska Maritime National Wildlife Reserve. Addition- al coal may exist in the Innoko, Koyukuk, Nowitna, and Kanuti National Wildlife Reserves, and in some cases near wild and scenic rivers. Most of the areas were closed to mining by the Alaska National Interest Lands and Conservation Act (ANILCA) of 1980. All or part of the Broad Pass, North Slope, Circle-Eagle, Kobuk, Lisburne, Lower Yukon, Etolin Straits, Bering River, Kenai, and Nenana coal areas or fields are affected by ANILCA. STATE SELECTIONS The State of Alaska has title to most of the Cook Inlet (Susitna Basin) coal region (Beluga, Yentna, Little Susitna, and Kenai coal fields), the Matanuska field, central portion of the Nenana coal belt (Healy coal field), and portions of the North Slope, Herendeen Bay, and Robinson Mountain fields. State selections pending include additional lands in these areas, as well as in the poorly studied Seward Peninsula coal areas, and the abandoned coal sites that occur along the Yukon and Koyukuk Rivers. Some of the "State selections" are in conflict with units created under ANILCA and will presum- ably be denied. State coal land is available under competitive lease procedure if the land has been previously classified as having potentially commercial coal, or under non-competitive Prospecting Permits in areas not known or suspected to have commercial deposits. The competitive disposal system was inactive from 1975 until 1983 when Beluga tracts were offered but not bid for. In December 1984, seven tracts in the Matanuska field were nominated and four were leased. Numerous coal prospecting permits filed from 1975 through 1985 are pending, in some cases awaiting decisions as to availability under permit or lease. ) COAL ON NATIVE LANDS Several of the 13 Native corporations established under the Alaska Native Claims Settlement Act acquired coal lands. The most significant holdings are: Cook Inlet Region, Inc.'s interests in the Cook Inlet- Susitna coal region, especially in the Beluga coal field; Doyon's interests in the Nenana coal belt, especially in the Farewell area and in the Eagle-Circle area; Arctic Slope Regional Corporation's interest in the North Slope coal field; Chugach Natives, Inc.'s interest in the Bering River coal field; The Aleut Corporation's and Bristol Bay Native Corpora- tion's interests in the Herendeen Bay-Chignik coal field. NOTE: The preceding material on the history of Alaska coal mining is based on a paper presented by Robert B. Sanders to the Focus on Alaska's Coal '80 Conference, October 21-23, 1980, at the University of Alaska, Fairbanks. This material has been edited and updated for this briefing book by David Germer and C.C. Hawley. 1-8 PN ON oe) 18 RESOURCES ALASKA'S COAL RESOURCE: HOW IT WAS FORMED Coal originated from plant debris, including ferns, trees, bark, leaves, spores, and seeds, that accumulated and settled in swamps. The unconsolidated accumulation of plant remains is called peat. Peat is being formed today in the marshes and bogs of Alaska and in swamps such as those on the Mississippi Delta. Layers of peat formed millions of years ago eventually became covered with sediment caused by floods and subsidence of the swamp areas. Heat and pressure from the overburden transformed peat into coal by a metamorphic process called coalification. Geologists have estimated that peat builds up at the rate of one foot per century, and that about three feet of compressed peat are required to make one foot of coal. Peat itself is not an ideal fuel source, since it may contain as much as 90% water (by weight). However, it will burn when dry, emitting a great deal of smoke, and is being used today as fuel in some areas of Ireland, Scotland, and Scandanavia. THE FORMATION OF COAL TYPES Coal first formed from peat has a high moisture content and a relatively low heating value. It is referred to as lignitic coal (lignite or brown coal) and is classified as a young coal of low rank. Through time, with the continued application of heat and pressure, the process of coalification of earlier coal layers continued, transforming lignitic coal into higher rank coals of lower moisture content (see Figure 2-1). Laboratory experiments have converted lignite to a sub- stance similar to bituminous coal by the application of heat and pressure, However, coal deposits being mined today have undergone a slow metamorphic process through millions of years. The first, and probably the most important, great era of coal formation began during the lower epoch of the Carbon- iferous period and extended to the Permian (see Table 2-1). Tall, sparsely foliaged trees grew in swamps among a prolific undergrowth of giant club mosses and ferns. Most of our higher rank coals being mined today, including those of the Appalachian region, date from this era. 2a: HZWMHZON BACHHHOK AAZHNPRDANHAYD Vegetation Peat Lignitic Coal Vv Subbituminous Coal Bituminous Coal Vv Anthracite Coal Figure 2-1 2-2 ASPD ABZANPADAAH TABLE 2-1 CLASSIFICATION OF GEOLOGICAL DATA AND AGE OF COALS (Adopted from Coal Science 1957, Elsevier and 1983 Geological Time Scale) Millions of Years Mean Duration Principal Principal Age of of Species of Coal _Age Coal Period ERA Period Plants Formation 1 2 Angio- and Moorland and forest peat Gymnosperms and peat swamps 2 3.5 3 Tertiary: Pliocene Angio- and Lignite in Europe, Japan, Epoch Gymnosperms New Zealand, Tasmania, Alaska 5 c 14.5 19 E Miocene Angio- and Lignite in Germany and N Epoch Gymnosperms Europe, South America, fe} China, Japan, Australia, Z Greenland 24 ° 30 12 I Oligocene Angio- and Lignite in England, c Epoch Gymnosperms France, Yugoslavia, Romania, British Columbia 36 ol 30.5 Paleocene/ Angio- and Lignite and subbituminous Eocene Gymnosperms Western United States Epoch including Alaska, Germany, Arctic Islands, Burma 66.5 105 78.5 Cretaceous Gymnosperms Lignite, subbituminous and coal, Europe, Alaska, M Ginkgoales South America 145 E 177 63 s Jurassic Gymnosperms, Northern Europe, USSR, ° Ginkgoales, China, Australia Zz Cordaitales, oO Coniferales 208 I 226 37 c Triassic Pteridophyta Poland, Austria, Mexico, Cordaitales Australia Coniferales 245 260 40 Permian Pteridophyta Coals in France, USSR, Cordaitales India, Africa, United (first States conifers) 285 300 75 Carboni- Scale trees, Bituminous and anthracite P ferous mosses- coal in Appalachia, A Bryophyta, France, Great Britian, L ferns- Germany, USSR, South E Pteridophyta American oO algae- Zz Phycophyta 360 ° 380 48 I Devonian First ferns Coals on Bear Island, c Cannel coal 410 30 Silurian Algae Bohemia (small) 440 570 230 Cambrian- Northwest USSR Ordovician Precambrian 2=3 The second great coal-forming era began in the Cretace- ous period and reached its peak during the Tertiary (see Table 2-1). Alaska's coals and the western United States lignite and subbituminous coals date to the Eocene epoch of the Tertiary period, approximately the time of the origin of primates and horses. We might conclude that one could simply determine the geologic age of the rock system and know what rank of coal may be present, but this would lead to error. Time alone appears to have had very little influence on coalification beyond the lignitic stage. There are lignitic deposits present in the Moscow basin of Russia that are known to have originated during the Lower Carboniferous age. Similarly, pressure, even powerful pressures due to geologic disturb- ances, seems to have had little effect other than decreasing the moisture content. Low rank deposits are sometimes found in strongly folded areas. Temperature appears to have had the greatest influence on coalification. Seam (layers of coal) were exposed to temperatures depending on the temperature gradient at the prevailing depth. Nominally, the temperature gradient amounts to about 0.9°C to 1.5°C per 100 feet but is not con- stant due to pockets of igneous magma in the earth's crust. COAL SEAMS Coal beds are also called coal seams. Present day seams range in thickness from less than one inch (2.5 centimeters) to 400 feet (120 meters) or more. The thickest seams are of subbituminous coal and lignite. Many coal deposits consist of two or more seams separated by layers of rocks. These formations were produced by new coal-forming swamps develop- ing over buried ones. Each new swamp became buried and developed into a separate seam of coal. Some coal beds lie nearly parallel to the earth's sur- face. Other beds have been folded by earth movements and lie at an angle to the surface. In places, as in the Matanuska and Bering River fields, further earth movements have uplifted the folded and formerly deeply buried bituminous and anthracite seams. These seams locally have been exposed by erosion, 2-4 WHERE COAL IS FOUND Coal is found on every continent (Table 2-1). Deposits occur as far north as the Arctic and as far south as Antarctica. Some coal deposits occur off ocean coastlines. Coal is widely distributed in Alaska, occurring from the North Slope to the Alaska Peninsula and from the Canadian border to the Seward Peninsula. The major fields are the vast Northern field, the Nenana and related fields on the north flank of the Alaska Range, and the Beluga and related fields of the Cook Inlet province. 2-5 ALASKA'S COAL RESOURCE: HOW MUCH IS THERE? Alaska's coal basins contain a vast amount of coal, per- haps more than half as much coal as currently inferred for the rest of the United States. The following table, prepared by Alaska's State Geologist in 1983, indicates where the main coal regions are located and the best estimate of the upper range of coal those basins contain. TABLE 2-2. SUMMARY OF THE COAL RESOURCES OF ALASKA (in short tons). Identified Undiscovered Region Resources Resources Northern Alaska 150 billion to 4 trillion Cook Inlet-Susitna lowland 11 billion over 1.6 trillion a. Beluga and Yentna fields 10 billion to 30 billion b. Kenai field (including offshore deposits) 300 million to 100 billion@ to 1.5 trillion> c. Matanuska field 100 million to 500 million d. Broad Pass field 50 million to 500 million Nenana trend 7 billion to 10 billion Jarvis Creek field 75 million to 175 million Other interior coal occurrences to 3 billion Bering River field 75 million to 3.5 billion Chignik Bay-Herendeen Bay fields 200 million to 3 billion over 160 billion over 5.5 trillion aTo 2,000-foot depth. bro 10,000-foot depth. RESOURCES AND RESERVES These two words are widely used as terms to describe the amounts and quality of coal and other natural commodities. Resource is the more general term, and mineral resources are, essentially, rocks or minerals in which valuable commodities, like coal, exist. If, however, the commodity exists in a quantity and quality that can be extracted at a profit, the resource is a reserve, or is economically recoverable. Both resource and reserve can be further classified by degree of certainty. For example, as given in the Glossary, measured or proven reserves are known more certainly than indicated or inferred reserves. As given in Table 2-2, identified resources of coal in Alaska are in specific rock units whose existence and location are known. The undis- covered resources are in less certainly known, but geologi- cally probable basins of sedimentary rock. Some of those identified coal resources of Table 2-2 which are near coastlines and transportation routes and have necessary quality and mineability will likely be converted to reserves in the near future. While much smaller than the total state resource, potentially mineable resources, measured in tens of billions of tons, are sufficient to meet domestic and export needs far in excess of the most opti- mistic projections. The next major coal fields likely to be developed in Alaska are close to tidewater or inland transportation. These coals have an economic advantage over other coals in the western United States. The Beluga field is essentially at tidewater; the Nenana field is only 250 rail miles from tidewater. In contrast, the major coal areas in the coal producing states of Utah, Colorado, and Wyoming lie at least 900 miles from tidewater. The shorter inland transport and shipping time from Alaska to the Pacific Rim countries also gives Alaska coal a significant transportation advantage when compared to other western United States coal. Coal shipped from the Port of Seward to the Pacific Rim takes ten days, compared to 14 days from Long Beach, California. Therefore, a savings of one week can be achieved on a single round trip. 2271 The profitability of a coal deposit depends on the price that the coal will bring in the market place and the costs of mining. The latter is the function of a great many factors, or which some of the most important are community and trans- portation facilities, geology, land status, and government regulations. The market place competitiveness of the coal is mainly determined by factors of quality discussed after this section, Part of the challenge of Alaska is that the vast major- ity of the state has not been thoroughly prospected and inventoried. More data is definitely required to better estimate the Alaska coal picture. ALASKA'S RESERVES Alaska coal deposits which may be considered "reserves" are located in the Beluga, Nenana, Matanuska, Yentna, and Bering River coal fields (Figure 2-2). Within these five fields, 2 billion to 3 billion tons of coal are presently considered to be economically recoverable. The remainder of Alaska's coal fields are more remote from developed transpor- tation and other essential services. Northern Alaska Nenana Matanuska - se & Herendeen Bay FIGURE 2-2 2-8 THE HISTORY OF ESTIMATING ALASKA'S COAL RESOURCES Early estimates of Alaska's coal resources gave only a general idea of the order of magnitude of the resource. Brooks (1901, 1909) and Gates (1946) estimated Alaska's coal resource at about 96,000 million tons. Several studies by the U.S. Bureau of Mines and U.S. Geological Survey compiled by Farrel Barnes in 1961 and 1967 resulted in an improved estimate of 130,125 million tons. Work by Rao and Wolff (1975), McGee and O'Connor (1975) and McConkey et al. (1977) updated these earlier estimates without any new data. Current estimates of identified resources are about 141 billion tons. Only a small percentage of this amount, how- ever, can be considered mineable by current standards. Some sources place Alaska's total coal resource in the thousands of billions of tons, but these estimates are hypo- thetical and include estimated amounts of coal occurring at great depths. NORTH SLOPE The area north of the Brooks Range may be the world's largest coal province. In the west-central Arctic including the National Petroleum Reserve, the coal occurs in the 1,000 to 15,000 foot thick Corwin formation, a deltaic sequence in the upper Cretaceous Nanushuk Group. These coal beds occur in series, with eight or nine individual coal beds commonly totaling 25 to 30 feet of coal. Although beds in excess of 7 feet and a few 20 feet thick are described, most individual beds are 1 to 3 feet thick. East of the National Petroleum Reserve, there are few coal outcrops, and most data are from seismic shot holes and oil well logs. Very few data have been published. East of the Reserve, the coal bearing unit is placed in the Colville Group, of late Cretaceous or early Tertiary age. The coal is generally less mature and of lesser rank (subbituminous C and lignite) than are the coals to the west on the Arctic coastal plain. To the south, the coals are incorporated in pro- gressively tighter and asymmetric folds with axial thrusting. The coal rank increases to high volatile B bituminous. Sig- nificant locations include the Corwin Bluffs where 80 coal beds, including beds of 5-1/2 to 9 feet, have been described; the Cape Beaufort area with 9 and 17 foot beds, and the 2-9 Kukpowruk River where a 20 foot bed of high volatile bitumin- ous coking coal occurs. The Kukpowruk River area has been opened and extensively studied since 1954 by Morgan Coal Co., Union Carbide Corp., and Kaiser Engineers. On the basis of restricted projections, Barnes (1967) estimated 120,197 million tons of coal, of which 101,000 million tons are subbituminous, as "identified resources" in the North Slope area. NENANA COAL FIELDS The Nenana coal fields occur in a series of individual Tertiary coal-bearing basins extending for at least 150 miles along the north slope of the Alaska Range in the Alaska interior. Although several of the basins bear individual coal field names; e.g., Jarvis Creek, Tatlanika, Hood River, Healy, Lignite, Suntrana, and Teklanika, they are sufficient- ly similar that they can be considered under a single title. The coal is generally subbituminous C or B, varying generally between 7,500 to 9,500 Btu. Sulfur content is low, about OF 215 The easternmost coal field identified in this trend is the Jarvis Creek coal field near Big Delta on the Richardson Highway. Thirty coal beds greater than 1-1/2 foot thick and one 8 to 10 foot thick seam are reported to occur within this field. The area is gently folded. The coal ranges from 7,800 to 8,300 Btu and contains 1.0 to 1.3% sulfur. This field has been explored under a Federal Coal Prospecting Permit, and an application for conversion to lease is pend- ing. The Healy, Lignite, and Suntrana coal fields lie in the central portion of the Nenana Belt along the Alaska Railroad and the Anchorage-Fairbanks Highway. Several properties in these areas were developed with the construction of the Alaska Railroad in 1918, and many operated during and shortly after World War II. Subbituminous C coal in beds 10 to 60 feet thick occur in cyclical series of poorly cemented sandy beds. The Usibelli Mine, the only currently active mine in the state, produces about 1,400,000 tons of coal annually from three 20 foot thick beds in a 235 foot section in moderately dipping fault blocks. Reserves of at least 250 million tons 2-10) are estimated on Usibelli's leases. The coal is subbitumin- ous C, averaging about 8,000 Btu, with 27% moisture and 0.2% sulfur, which is considered typical of the Nenana coals. Immediately to the north, Meadowlark Farms, a subsidiary of Amax Corporation, demonstrated commercial quantities of coal in obtaining state coal leases. The identified resource in the Nenana coal fields is about 7 billion tons. Recent work indicates, however, that the "undiscovered resources" of 10 billion tons estimated in 1983 significantly understates the potential. OTHER OCCURRENCES IN THE INTERIOR REGION Subbituminous to bituminous coal is found in 2 foot beds in several locations along a 120 mile stretch of the Kobuk River, between Kiana and Shungnak. The extent and distribu- tion are unknown. About 36 miles northeast of Bettles, on the middle fork of the Koyukuk River, a 9 to 10 foot bed of bituminous coal has been reported. The extent and distribution of the bed is also unknown, At several locations along the lower parts of the Yukon River, bituminous coal occurs in 1 to 3 foot beds in the Kaltag formation. Several small mines were operated for the riverboat market at the turn of the century, including the Pickert Mine, near Nulato, where a 30 inch seam of fair to good quality coking coal was worked. A 10 foot bed of coal is reported from the vicinity of Anvik. Coal and lignite have been reported from several sites along the lower Kuskokwim River, including a 6 foot bed of bituminous coal (Barnes, 1967). Along the Etolin Straits, on Nunivak and Nelson Islands, bituminous coals with high coking values are reported in beds less than 2 feet thick. North along the coast, around Unalakleet, lignite and coal were once mined from beds reported to be up to 8 feet thick. 25 SEWARD PENINSULA Several areas of lignite occur in a complex of isolated basins on the Seward Peninsula. A steeply dipping 80 foot bed of lignite at Chicago Creek, a tributary of the Kugruk River, was opened in 1908 and mined almost continuously until 1915, and at intervals until 1940. Work done on state contracts in 1980-1985, indicates a demonstrated resource of 4.5 million tons in the Chicago Creek field, with at least 1.5 million tons of additional inferred resources. The coal is’ lignite; equilibrium moisture tests suggest heating values of about 7,500 Btu/lb. A preliminary feasibility study of a power plant at Kotzebue fueled by Chicago Creek coal indicated that it would be slightly more expensive than diesel, but if additional capa- city could be installed (for example, to supply the Red Dog Mine), the coal would be an economic fuel. Near the confluence of the Yukon and Tanana Rivers, late Cretaceous bituminous coals were mined for the riverboat traffic at the turn of the century. Although the known coal beds are thin (less than 36 inches), impure and of limited "run", the area has not been explored sufficiently and should remain of interest for the potential local market. Several miles to the north, at the confluence of the Dall and Yukon Rivers, a 4 to 5 foot bed of subbituminous coal was described by the USGS in 1973. THE UPPER YUKON Thin, subbituminous coal seams are observed in open folds along an 80 mile segment of the Upper Yukon River near the Canadian border, between the towns of Eagle and Circle. At Washington Creek, five shallow-dipping coal beds greater than 4 feet thick are reported. A "pocket" of bituminous "coking coal" was mined near the mouth of the Nation River. Most of the Circle-Eagle coal is now within Yukon-Charley Rivers National Preserve and cannot be mined. About 50 miles south of the upper Yukon River coal area at Chicken, an outcrop of vertically dipping Tertiary strata includes a subbituminous coal bed greater than 22 feet thick, which was opened in the 1930's. The extent of the coal is unknown, 2a ee COOK INLET-SUSITNA BASIN COAL REGION The Tertiary sedimentary basin now partially occupied by Cook Inlet contains enormous coal resources. This area has been traditionally divided into several coal fields: the Yentna coal field lying to the north of the Castle Mountain fault, the Little Susitna coal field south of the fault extending into the Matanuska Valley, the Kenai coal field occupying ‘the western part of the Kenai Peninsula, and the Beluga coal field lying to the west of Cook Inlet. Because of differences in rock and occurrence, the adjacent Matanuska and Broad Pass coal fields are not discussed as portions of the Cook Inlet-Susitna Basin coal region. The thickest and highest ranked coals in the Cook Inlet- Susitna Basin coal region are in the Beluga area where at least 8 seams of 8,000 Btu, subbituminous coal occur in beds over 20 feet thick. These include the Canyon Bed, 23 feet thick, with "indicated resources" of 66 million tons; the Drill Creek Bed, 65 feet thick, 64 million tons; the Capps Bed, 50 feet thick, 366 million tons; the Chuitna Bed, 52 feet thick, 1,219 million tons, and the Beluga Bed, 30 feet thick, 12 million tons (Barnes, 1966) totalling 1,727 million tons. Additional beds are known and the logs of Pan American Petroleum No. 2 State show 42 significantly thick coal beds in the 7,450 feet of Tyonek strata penetrated. Although some of these thick coal beds have been traced for several miles along rivers, there is a lack of data away from several rivers, so Barnes' (1967) identified resources estimate of 2.25 billion tons is based on a small part of the possible coaliferous area. Based on more recent data, Swift et al. (1980), identi- fied at least 750 million tons as being economically extract- able under present conditions from approximately 50,000 acres in the Capps and Chuitna areas. Resources for the entire Beluga area are unknown, but this area alone probably exceeds the 29 billion ton resources estimate that McGee and O'Connor (1975) ascribed to both the Beluga and Yentna coal fields. Most of the Beluga coals range from 6,600 to 8,200 Btu (8,500 to 9,800 MMF) with 7 to 22% ash, 20 to 30% moisture, and 0.1 to 0.2% sulfur. Recently discovered beds beneath the Chuitna bed contain significantly less ash (7 to 8%) on an average than does coal outside the Chuitna area. 2-13 The younger Beluga and Sterling formations exposed on the Kenai Peninsula contain coals. Coal found near the sur- face on the Kenai Peninsula is less mature than are the Tyonek Formation coals of the Beluga field, with greater ash, volatiles, and less fixed carbon. They are generally dull, platy and cleated in appearance with considerable evidence of woody and bark tissues, and of marginal lignitic to subbitum- inous rank. Most beds are 2 to 3 feet thick and lenticular, but 7 foot beds are known, including one mined during several periods at Homer. The identified resources of the Kenai coal field esti- mated by Barnes (1967) are 300 million tons. Most of the Kenai coal field is under state and Native title, with inten- sive recreational, private, and municipal surface use. The Tyonek Formation coals of the Beluga field reappear north of the Castle Mountain fault and Mt. Susitna intrusives in the Yentna coal field. Around the western margin of the basin, moderately to steeply dipping coal seams have been reported, including 15 foot beds on Johnson Creek and the Nakochena River, a 25 foot bed near Mt. Fairview and a 55+ foot bed on Sunflower Creek. These western margin coals are similar to those of the Beluga coal field. Blumer describes these coals as 5,400 to 9,450 Btu with 6 to 40% ash, 20 to 30% moisture, and 0.1 to 0.2% sulfur, and reports 500 million tons identified resources in five 10 to 45 foot thick beds to depths of 250 feet. In the central and eastern portion of the Yentna Basin these coals are up to 8,000 feet deep, but surface exposures of younger, thinner (to 6 feet) beds of high ash, low rank subbituminous coals have been used for years by the placer miners of the Dutch and Peters Hills. Reed et al. (1978) estimated a 64 million ton resource in this area. The Alaska Railroad and the Parks Highway follow the eastern margin of the Yentna Basin. The coals of the Little Susitna coal field are similar to those of the adjacent eastern margin of the Yentna field- platy, dirty lignite to subbituminous coals in thin, general- ly lenticular beds. The only known commercial deposit, at Houston, was exhausted through surface and shallow under- ground mining. It produced about 90,000 tons of subbitumin- ous coal during World War II. 2-14 The identified resource for the Cook Inlet-Susitna coal province (i.e. the Beluga, Kenai, Yentna, and Little Susitna coal fields and that beneath Cook Inlet) is believed to be approximately 11 billion tons (McConkey et al., 1977). At least 750 million tons are included in current mining plans. BROAD PASS LIGNITE FIELD AND NEARBY LOCATIONS The Broad Pass lignite field is an apparent northern extension of the Cook Inlet-Susitna Basin coal region, following the Chulitna River in what appears to be a graben, i.e. a geologic structure bounded by faults on its long sides. These are lignitic coals in 5 to 10 foot horizontal beds, believed to be younger than are the coals in the Yentna Basin to the south. Although the coal is of low calorific value, its location adjacent to the railroad makes it attractive. Barnes (1967) estimated that 64 million tons of coal may be present in a 7 square mile area of this 300 square mile field. West of Broad Pass, a small outlying area of subbitumin- ous coal at Costello Creek was mined between 1940 and 1954. At Yanert, on the Alaska Railroad in McKinley (now Denali) National Park, a small amount of coal was mined shortly after World War I. At least two other mines operated in the National Park area, including one at Highway Pass where a 1 to 3 foot bed was mined for use in the park buildings. MATANUSKA COAL FIELD To the east of the Little Susitna coal field are the older, early Tertiary (Paleocene) coals of the Matanuska coal field. These coals occur in the upper portion of the Chickaloon Formation and are found from west to east in three main districts (Wishbone Hill, Chickaloon, and Anthracite Ridge). Because of structural deformation and to a small extent igneous intrusions, the rank of this coal increases eastward from high volatile bituminous at Wishbone Hill to anthracite beyond Chickaloon. In the Wishbone Hill district the coal seams are concen- trated into four discreet groups (Jonesville, Premier, Eska, and Burning Bed) that are persistent from one end of the dis- trict to the other. Individual coal beds are generally 2.0 to 3.5 feet thick and commonly contain shale partings. Maxi- mum seam thickness is about 12 feet and particularly in the 2-13 Premier Group, several beds total 30 to 40% of a 100 foot coal-bearing section, The bulk of the resource in the Wishbone Hill District lies in the large, steeply dipping, faulted Wishbone Hill syncline. The Wishbone Hill District's reserve exhibits a wide range in quality values, due mainly to the tremendous variability in the amount of entrapped ash within the coal seams. Some coal seams can be mined cleanly, but an upgrading process, referred to as "washing" may be necessary to remove the thin layers of shale which are pre- sent in some seams prior to exporting this coal. Through coal washing, a consistent coal quality of 12,000 to 12,500 Btu per pound with 5 to 7% ash and 0.3 to 0.5% sulfur can be produced. A number of Wishbone Hill District mines were worked from 1916 to 1983, producing a total of about 7 million tons of coal. The most productive of these mines, the Evan Jones and Eska Mines, extracted coal from both the north and south limbs of the Wishbone Hill syncline. The Evan Jones Mine was the largest in the district and produced about 6 million tons of washed coal until its closing in 1968. Eight beds were mined, including one 8 to 12 feet thick. An estimated 100 million tons of underground resources remain in the Evan Jones Mine block. Also extracting coal from both limbs of the syncline was the Eska Mine, operated by the Alaska Railroad intermittently from 1919 through World War II as a contingency supply. Identified resources of 600,000 tons remain on the Eska property. Coal beds on the steeply dipping (25 to 90°) north limb of the syncline in the western part of the Wishbone Hill Dis- trict were generally only exploited where glacial gravel cover was thin, and the coal was visible. The abandoned small underground and surface mines on this limb consisted of the Premier, Baxter, Buffalo, Matanuska Center, and Wishbone Mines. A few government drilling programs penetrated the glacier gravel cover and indicated that faulting has divided the northern limb into many noncontinguous blocks. Suffici- ent surface mineable coal is believed to be present in the larger, less structurally complex blocks to warrant interest. Although Barnes (1967) indicates that a resource of 112 million tons exists in the Wishbone Hill District, the major- ity of this resource is too deeply buried or in blocks too small to be developed at this time. Recent evaluation indi- cates, however, that surface mineable coal exists in suffici- ent quantity to supply a 150 MW power plant for 25 to 40 years. 2-16 The Chickaloon District is a small area (12 square miles) which consists of Chickaloon Formation outcrops exposed in a very complex folded, faulted, and dike-intruded synclinal structure. Low volatile bituminous coal occurs in discontinuous beds up to 14 feet thick. Although some samples have shown strong coking tendencies, the intense deformation and lack of coal bed uniformity, purity, and con- tinuity have discouraged mining. In 1921, the U.S. Navy built a coal mining town at Chickaloon, but had to abandon it when it was later discovered that the coal could not be mined at a reasonable cost and was not generally satisfactory for naval use. A single 10,000 ton shipment was made in 1922 for naval testing. Barnes (1967) estimated 23 million tons remain (best considered as hypothetical resource) in a small portion of the area. The Anthracite Ridge District at the eastern end of the Matanuska Valley coal field contains thin and discontinuous lenses of semianthracite and, locally, anthracite, in a complex of tight folds, faults, and intrusions, Although most of the coal exposures are of beds best measured in inches, beds up to 10 and 16 feet have been reported. Based on a study of the 90 known outcrops and 8 cores, Waring (1936) estimated "several million" tons of coal may be pre- sent, with most of the coal being semianthracite. Total resources for the Matanuska Valley coal field have been estimated to range from 248 million tons (McGee and O'Connor, 1975) to 274 million tons (Barnes, 1967), including identified resources of 99 million to 125 million tons respectively. The total resource, mostly hypothetical, is probably closer to 500 million tons, with a little over 100 million tons as identified resource. GULF OF ALASKA TERTIARY BASIN The Bering River coal field on the Gulf of Alaska is the state's most historically renowned coal field, being the focus of the Alaska coal scandal (Pinchot-Ballinger contro- versy) that shook the Roosevelt and Taft Administrations. The coal ranges from low volatile bituminous in the west to semianthracite in the east in this 6 by 20 mile area. The coal occurs in the Kushtaka Formation of early or mid- Tertiary age. 2-17 The area is so extremely deformed that the term "coal bed" is not applicable, the coal generally occurring as pods, lenses, along faults or as discordant masses along the axes of compressed isoclinal and disharmonic folds. Although spectacular outcrops of seemingly 20 to 30 feet thick coals may be observed, thorough study has shown that these are not true bed thicknesses. The "common knowledge" presence of coking coals in the area is not supported by published data, although Douglas Colp (personal communication) has _ noted successful coke testing in the field. Coal in beds up to 6 feet thick has been reported from the Robinson Mountains. These beds are in the Kultieth Formation and are of similar age and distortion to the Kushtaka Formation of the Bering River coal field. CHIGNIK-HERENDEEN BAY High volatile bituminous coal occurs in the upper Creta- ceous Chignik Formation at Herendeen Bay, in the Chignik area, and presumably in the hundred mile area in between. The area has been moderately to extensively folded and faulted. Dips are generally in excess of 30 degrees and con- tinuity of the homoclinal limbs is not great. The coal beds are generally 1 to 2 feet thick, but 4 and 6 foot beds have been reported in the Chignik area. UNGA ISLAND Beds of Tertiary lignite up to 4 feet thick occur ina single low dip (8 to 10°) homocline on Unga Island and in the adjacent portions of the Alaskan Peninsula. The only analytic data on this coal showed 26% ash, 25% moisture, and 0.5% sulfur giving 8,100 Btu per pound. SOUTHEASTERN ALASKA Coal occurs at several locations in the Alexander Archi- pelago. On Kuiu, Kupreanof, Zarembo, and Prince of Wales Islands thin beds of Tertiary lignite occur. There are 2 to 3 foot beds of impure, sulfurous bituminous coal at Kotznahoo Inlet on Admiralty Island. A small mine supplied Juneau with some of this coal prior to 1929. 2-18 QUALITY OF ALASKA COAL Quality of coal is determined by many characteristics, including thermal value, ash, moisture, content of sulfur and other pollutants, ability to form coke, and fusion character- istics. Thermal value, measured in Btu's per pound or kilo- calories per kilogram, is one of the most important. All the characteristics may help determine if a particular coal can be used economically. There is a general correlation of thermal value and moisture with the rank of coal. Thermal value tends to increase as rank increases from lignite through subbituminous to bituminous, Moisture content decreases and fixed carbon increases generally from lignite to anthracite rank. Alaska has extensive resources of potentially mineable subbituminous and bituminous coals. Both types are suited for thermal energy plant use. Local deposits of anthracite are found in the Bering River and Matanuska fields. ALASKA COAL IS LOW IN SULFUR One of the outstanding differences between Alaska coals and coals from other states is the much lower sulfur content of Alaska coals. Eastern United States coals often have ten to twenty times as much sulfur as Alaska coals. Even low sulfur western coals carry 1-1/2 to 6 times the amount of sulfur found in Alaska coals. This low sulfur content is one of the selling points of Alaska coal for export and domestic power use. Because of its lower sulfur content, Alaska coals emit less SO2 when burned than do most thermally equivalent coals. The lower sulfur content also means that there is very small potential for sulfur-bearing acids to pollute the streams draining the mines. 2-19 OTHER PREMIUM CHARACTERISTICS Certain less familiar factors, such as content of nitro- gen, amount of trace metals including sodium, ash fusion characteristics, coking quality may raise (or lower) market price by an amount sufficient to determine the economic value of coal. Nitrogen, like sulfur, is a potential pollutant; excess nitrogen is a negative cost factor. Large scale bulk testing of both Beluga and Nenana coals shows that they are excellent thermal coals in both pollution and burning characteristics. Matanuska coal has_ several premium characteristics, including low sulfur and nitrogen, good fusion characteristics, and some coking ability. NOTE: The basis of this section was from a paper presented by Robert B. Sanders to the Focus on Alaska's Coal '80 Con- ference, October 21-23, 1980, at the University of Alaska, Fairbanks. The results of more recent work have, however, been incorpo- rated. Specifically, Usibelli Coal Mine, Inc. supplied data on the Nenana field, C.E. McFarland of Placer U.S., Inc. and Robert Stiles of Diamond Alaska Coal updated the Beluga field. David Germer of Rocky Mountain Energy updated the Matanuska field, and C.C. Hawley of Hawley Resource Group re- viewed and edited the entire section. 2-20 5 39 iu} (oP) + fad FA | F 7) MINING AND RECLAMATION MODERN SURFACE MINING TECHNIQUES Modern surface coal mining operations use large equip- ment to carry out a sequence of tasks. They are, in order: 1) topsoil mining and storage, 2) removal of subsoil over- burden, 3) mining of the coal seam or seams, and 4) reclama- tion by replacement of overburden and topsoil. The final step is followed by revegetation. Relatively small mining operations or those that mine steeply dipping seams use trucks and shovels supplemented by bulldozers for most steps. Larger mines, particularly with flat seams, or with heavy overburden deposits, use walking draglines in the mining sequence. In general, the coal seams are drilled and blasted prior to actual excavation. In Alaska where overburden may be permanently frozen, the drill and blast approach, using relatively small amounts of explosives, is also generally used to fragment overburden. Walking draglines, in general use in industry, have buckets with capacities ranging from 10 to over 100 cubic yards, and weigh from 500 to 7,500 tons apiece. The Usibelli Coal Mine, Inc. "Ace-In-The-Hole" dragline, currently Alaska's largest, has a capacity of over 30 cubic yards. Draglines have a digging cycle of about 1 minute; smaller units can dump overburden (or coal) 150 feet from the digging area; larger units can dump up to 350 feet from the mine area. Mining plans for dragline operations typically use long narrow pits starting in shallow coal areas and progressing to deeper areas. Coal loading follows closely behind overburden stripping so the dragline can return overburden into each successively mined out pit. The overburden is then graded to the land's approximate original condition and vegetation is re-established. Truck/shovel operations are somewhat different. The shovels used for most coal mines have bucket capacities ranging from 10 to over 30 cubic yards. The trucks range in size from 35 ton capacity to over 170 ton capacity. Shovels and trucks are used first to remove and move soil and overburden to stock pile areas (where they are segregated and kept avail- able for reclamation). 35a Coal loading is similar to the truck/shovel mining of overburden. Truck/shovel pits tend to be square or irregular unlike the long narrow dragline pits. As one segment of a pit is mined out, overburden is hauled back into the pit until the approximate original con- tour is attained. In this way, even though large truck/shovel operations can ultimately mine out hundreds or thousands of acres, during any one year the pit would involve a fraction of the total acreage. Different mining operations use different mining techniques to adapt to each mine's specific conditions. While the descriptions outlined here are common to many operations, each mine will modify the standard techniques to allow it to meet its own mining and reclamation conditions. RECLAMATION STRATEGIES--A PROVEN RECORD Industry and government are thoroughly committed to effective reclamation of mined lands in Alaska. Both are serious about their responsibility to protect the environment and return mined lands to their original or a more productive condition. Exhaustive studies of the environment and how mining will affect it are performed by the mining companies and reviewed by state and federal agencies before mining permits are issued. A detailed reclamation plan is then designed and approved for the mine. Prior to and during mining, care is exercised to protect or relocate streams, wildlife, livestock, buildings, wells, fences, historic sites, archaeological sites, scenic features, roads, and other sensitive and valuable resources. Groundwater, streams, the air, vegetation, wildlife, blasting effects, and soils are continually monitored during mining and subsequent reclamation to detect any harmful effects of the mining operation, Reclamation of the mined lands follows closely behind mining. Even where the nature of the mining operation pre- vents the permanent restoration of disturbed areas’ for several years, these areas are temporarily reclaimed in the interim with quick growing grasses and plants to protect the environment. Reclamation strategies are designed to return the land to a condition equal to or better than its pre-mining state. Plants, water sources, shelter, and other features that are especially important to wildlife found in the area are re- established. Stream beds are restored with sand, gravel, rocks, and vegetation. Small lakes and ponds are created where they are useful. Forests are re-established. Farmland is restored to its pre-mining productivity. Fences, roads, wells, canals, pipelines, and other improvements are rebuilt. The technology exists to do all these things. It only takes a commitment on the part of the people and their government, such as we have in Alaska and the rest of the United States, to make it work. Fortunately, our industry has shown its willingness and capacity to meet reclamation standards. 3-3 ECONOMICS ELECTRICITY PRODUCED FROM COAL CAN COMPETE In the South 48, coal is already the least expensive fuel for the generation of electricity and currently provides over one-half of all electrical power. In Alaska, approximately 70% of the electricity provided by Golden Valley Electric for the northern railbelt is generated by coal, substantially lowering the cost of electricity that is otherwise produced with expensive diesel fuel. Because of its low cost, coal-fired power generation is also receiving increased attention in the Cook Inlet area. The thickness and the geological characteristics of the coal between Fairbanks and the Kenai Peninsula make it conducive to economical mining. Even with the extra expense necessary to meet the new federal surface mining regulations, production costs are relatively low and human risk and work interruptions can be kept to a minimum, HOW COAL COMPARES WITH THE OTHER OPTIONS Oil is the most expensive fossil fuel alternative, costing 3 to 5 times as much as natural gas or coal. Natural gas has been the fuel of choice in the Anchorage area for the past two decades because of favorable contracts that were negotiated in the mid-1960's and because of the comparatively low capital cost of gas-fired generation. However, natural gas prices in Alaska are increasing. Natural gas costs are expected to rise in the next few years to a level where electricity generated by natural gas will substantially exceed that generated by coal. Hydroelectric power could furnish an important part of the long range energy needs for the railbelt region. The main obstacle to large scale hydro development is’ the extremely high cost of building dams. Most experts agree that for new projects, coal-fired electric power competes well with all alternatives. 4-1 COAL WILL HELP KEEP YOUR UTILITY BILLS DOWN The existence of one or more coal-fired plants in a community adds competition to the market place and helps keep down electricity rates from other sources. THE AMOUNT OF ELECTRICITY WE USE According to the Chugach Electric Association and Anchorage Municipal Light and Power, the region from the Matanuska Valley to Homer used in the area of 2.7 billion kilowatt hours in 1984. The Fairbanks community used 519 million kilowatt hours. THE AMOUNT WE WILL NEED AT THE TURN OF THE CENTURY A study financed by Chugach Electric Association estimates that the region from the Matanuska Valley to Homer will need 3.7 billion kilowatt hours of electricity in the year 2000, roughly one and a half times the amount being used today. The best way to estimate future need is in terms of "peak demand". This means the maximum amount of power needed at any one time. A utility must always have the capacity to supply the peak demand plus a prudent amount of reserve capacity to handle unexpected circumstances, The peak demand in the railbelt area in 1984 was 650 megawatts. It is estimated by the Federal Energy Regulatory Commission that peak demand in the year 2000 will be 900 megawatts. DOES THE PRICE OF COAL FOLLOW THE WORLD PRICE OF OIL? No. Coal and oil are not direct substitutes for most of their uses. Therefore, a host of variables determine their prices. Coal prices are influenced largely by the supply and demand for coal. While coal prices are one variable having an influence on coal demand, other variables are more important such as heat content and cost delivered to the Market. Large supplies of coal relative to demand results in vigorous competition among coal suppliers. 4-2 All energy prices have escalated during the last 15 years. But, coal has not increased in price as dramatically as oil. In 1970 the average United States price of coal was about $7.00 per ton for 12,200 Btu coal ($0.28 per MBtu's). The price of coal has increased in current dollars to about $30.00 per ton for an 11,000 Btu coal ($1.37 per MBtu's). Over a longer period, escalation in coal cost is much less than in the period diagrammed. It should also be noted that the period 1970 to 1980 includes both the oil crisis years and the implementation of the Federal Surface Mining Act. Although the Act was widely perceived as necessary, it did result in a significant increase in the real cost of coal mining which is reflected in this period. Although real costs may escalate there is nothing in the historical record to suggest an increase similar to that of the 1970's in the near future. HOW WILL COAL-GENERATED POWER COMPARE IN COST WITH POWER FROM HYDRO AND NATURAL GAS? This critical question has no easy or certain answers. There are, however, probable answers based on experience elsewhere and the availability of the resources. Natural Gas: Natural gas will remain the preferred fuel cost-wise until sometime in the period of 1995 to 2000. From that time onward, the cost of natural gas will probably rise to a level where, even with the higher capital cost of coal fueled plants, electricity produced from coal will be cheaper than that from natural gas. Hydro: Because the "fuel costs" for hydro are practically zero, at some point in time, power from highly capital intensive hydro should cost less than that developed from coal which has moderate capital costs and relatively low fuel cost. This point in time or "crossover" is the critical item to identify. In the amended FERC application for the Susitna hydro project, the Alaska Power Authority suggests that a crossover between hydro and coal could take place in about 2007, assuming 1999 completion of Susitna. This crossover is at odds with almost any rule of thumb projection which is used to compare coal and hydro. It makes: 1) all the best assumptions for Susitna, and 2) all the worst assumptions for coal to find the crossover number. That number is not known, but under reasonable assumptions crossover will be at 35 to 50 years from completion. If Susitna is built significantly over budget or if it is not financially pre-loaded, crossover will never occur, and coal will be cheaper than hydro for any reasonable life cycle which can be projected. Coal is predictable. Coal-fired plants can be built in sensible increments. Even with some hydro and with natural gas into the early 2000's, it is not too early to start planning the coal plants that Alaska will need. 4-4 COAL AND THE ENVIRONMENT ENVIRONMENTALLY, THE GENERATION OF POWER BY COAL COMPARES FAVORABLY WITH OTHER ALTERNATIVES It is difficult to compare directly the environmental impacts of different alternatives for generating electricity. This is because different alternatives have different kinds of impacts. All alternatives, if properly designed, can provide environmentally acceptable levels of impacts in compliance with environmental protection statutes and regulations. A new coal-fired power plant will have less air pollution than today's oil-fired power plants and not significantly more than older natural gas plants. The hydro alternative will create no air pollution. But, as with any major project, it will have its own environmental trade-offs, mainly in the areas of land use and wildlife habitat. CLEAN ENERGY FROM COAL .. . IS IT POSSIBLE? Yes. In the past, coal was a major source of air pollution, especially in the midwestern and eastern states. Fortunately, the past is past. The pollutants released from older coal plants were mainly particulate matter (fly ash), sulfur dioxide and nitrogen oxides. Since the 1977 amendments to the Federal Clean Air Act, all newly-built coal-fired plants are required to install extensive antipollution equipment which minimizes the release of all of these pollutants. The positive results have been dramatic. As an example, the National Coal Association reports that these improvements contributed to a 40% drop in all United States sulfur dioxide concentrations from 1972 to 1982, a period in which coal burning by electric utilities increased by 65%. Any coal-fired plant built in Alaska now or in the future will be subject to these stringent regulations which require scrubbers to reduce sulfur dioxide and precipitators or baghouses to remove particulates. Coal boilers, themselves, have been modified to minimize the formation of nitrogen oxides. 5-1 CURRENT REGULATIONS AND MODERN TECHNOLOGY Current Alaskan state and federal regulations require the use of the best available technology to remove particu- lates, SO2 and NOx plant exhaust. These regulations for new plants not only require the best technology, they also preclude emissions that would cause a significant deteriora- tion of air quality. As a result, Alaskan air quality will not be significantly affected by new coal-fired power plants. Prior to 1971 there were no national standards for sulfur dioxide (SO2) and particulate emissions from utility boilers. Various state and local standards and site specific rulings governed emissions from power plants. Low sulfur coal and tall dispersion stacks were typical compliance practices for S092. Mechanical collectors and electrostatic precipitators were used for particulate control. In 1970, significant amendments were made to the Clean Air Act. They required the EPA to specify emission limits for SO2 and particulates. These limits were initially set at 1.2 pounds SOz per million BTU heat input (to the boiler) and 0.1 pound particulate per million BTU input for new units larger than about 25 megawatts (electric). The regulations are referred to as the New Source Performance Standards (NSPS) . Electrostatic precipitators were the principal method of particulate removal. Sulfur dioxide emissions were controlled by using low-sulfur coal or flue gas desulfuriza- tion (FGD) systems. The Clean Air Act gave rise to a number of related air pollution control regulations. ° National Ambient Air Quality Standards (NAAQS) set maximum ground level concentrations for various pollutants. fo} Prevention of Significant Deterioration (PSD) designed to protect the quality of the air in pristine areas already better than the NAAQS. ° State Implementation Plan (SIP) required each state to develop a comprehensive program for air quality management. ° Best Available Control Technology (BACT) and Lowest Achievable Emission Rate (LAER) provided more restrictive regulations for various pollutants on a regional, air basin or site-specific basis. 5-2 The Federal Clean Air Act was amended most recently in 1979. It is this most recent revision that sets the new source performance standards (NSPS) which will apply to all new coal-fired plants built in Alaska. Modern coal-fired plant designs using the best available technology meet and are frequently better than required federal NSPS emission limits. Emissions from new coal-fired power plants compare favorably with emissions from gas generating facilities. Such coal-fired plant emissions are even somewhat lower than emissions from many stationary diesel-generating systems. The NSPS are set at levels which require that the "best available technology" (BAT) be used to achieve the regulation requirements. This essentially means that new plants must be designed to reduce NOx formed by combustion and utilize scrubbers and particulate removal systems to remove SOj2 and ash. These designs and equipment have proven to be reliable and effective in eliminating the pollution problems that are often associated with older coal-fired plants. STATE OF ALASKA REGULATIONS State of Alaska regulations closely parallel federal NSPS standards for NOx, SO, and particulates. In addition, state air quality control regulations ensure that plant siting and operations will not impact the visibility of scenic vistas. Potential problems unique to Alaska's climate, such as "ice fog", are also closely regulated. These regulations ensure that sound engineering practices will be applied in the planning stages of a project. Other state regulations ensure that projects will not significantly impact wildlife and fisheries, WILL BURNING COAL IN THE SUSITNA BASIN CAUSE SIGNIFICANT AIR POLLUTION? No, it will not, but this is a fair and important question, Unfortunately, many people equate today's clean burning coal-fired plants with older, midwestern United States plants such as those in Ohio that have extremely high NOx, SO2, and particulate emissions. 5-3 The fact is that the Federal Clean Air Act regulations that were adopted in 1977 preclude construction of the old type of "dirty", high emissions plant. A modern coal-fired plant, burning low sulfur Alaskan coal, would emit less than one-sixth of the particulate and less than 1/120 of the SO9 emitted by typical older midwestern United States plants. Current state and federal regulations simply will not allow modern coal-fired plants to cause pollution. 5-4 CLEAN AIR TECHNOLOGY Current state and federal regulations do not allow modern coal-fired plants to produce significant amounts of pollutants. The technology to achieve these strict regulation requirements is available and proven. Baghouses, SO2 scrubbers, electrostatic precipitators and low-nitrogen oxide burners have demonstrated reliable performance at new power plants of the largest scale. SCRUBBERS A power plant scrubber is a large vessel where acid gases (mainly SO2) from fuel combustion are mixed with and neutralized by a "basic" reagent, usually lime or limestone. Federal regulations require SOj removal on all new coal-fired power plants before combustion gases are released to the atmosphere. PRECIPITATORS AND BAGHOUSES Precipitators and baghouses are both designed to remove fly ash particulates from the combustion gas stream before the cleaned gas exits the plant stack. Current strict state and federal regulations require devices like ESP's or baghouses for all new coal-fired power plants. Both systems must perform to very high standards that result in virtually no stack particulate emissions. These systems are well proven and have been successfully applied at many large power plants. PARTICULATES NSPS require that coal-fired plants emit less than 0.03 pounds of particulates per million BTU. For typical Alaska coal, this translates to a removal of more than 99.9% of the coal ash from the plant exhaust. Available technology such as electrostatic precipitators (ESP) and baghouses can remove more than 99.9% of exhaust stream particulates. This results in a plant exhaust that is much lower in particulates than many currently operating oil and diesel-fired generating plants. ESP's remove ash from cooled combustion gases in the following sequence: i’ Cooled combustion gases are charged by a _ strong electric field in the ESP. 2s Charged gases, in turn, transfer their charge to fly ash particles. 3. Charged fly ash particles are attracted to oppositely charged plates or wires and held. 4. After a time, the ash coating builds up at the collection point. 5. The mass of ash is then removed by shaking or vibrating the collection point. Ash falls into a hopper and is removed from the system. Baghouses are also effective in removing ash particulates, A baghouse is essentially a large number of fabric filters (similar to a large vacuum cleaner). Cooled combustion gases pass through the filters while ash particles are trapped and build up into a mass of "cake". The ash cake is periodically removed by shaking or reversing gas flow through the filters. The cake falls to an ash collection hopper and is removed. Ash from power plants is often used for road base, as a light weight cement and for other construction uses, such as_ building blocks. Alaska's expending economy and active construction industry will likely find uses for and consume much of the by-product power plant ash. 5-6 SULFUR DIOXIDE All fossil fuels, coal, oil, and gas contain varying amounts of sulfur compounds. When these fuels are burned, essentially all of the sulfur present is converted to sulfur dioxide gas (S02). Large amounts of SO2 are emitted from older midwestern power plants firing high-sulfur coals. The SO2 from these older plants, combined with smelter acid gases and transportation emissions are considered to be major contributors to low pH (acid) rain. Many coal-fired midwestern generating plants were built in the late 1950's and 1960's. They were in operation prior to the 1972 NSPS, and so are "grand-fathered" and exempt from current strict emission regulations. They are the primary focus of the "acid rain" debate now underway. Many of these older plants are quite large and are still heavily used. They are designed to burn low-cost, very high- sulfur coal. Some midwestern coals range to 5% sulfur or higher, which is approximately ten times the amount of sulfur in Alaska coal, which is typically in the 0.2 to 0.6% sulfur range. The SOj emissions from older plants burning high sulfur coal are literally orders of magnitude greater than modern plants equipped with SO2 scrubbers. Projecting emissions from these older uncontrolled plants to a modern plant is simply not valid. Current state and federal regulations require the use of proven technology to remove SOj from plant combustion gases. These regulations for new plants are strict, and they will not allow power plant SO2 emissions that cause a significant degradation of air quality. When comparing SO2 emissions from older midwestern plants with modern plants firing Alaska coal, two important points should be kept in mind: ils To begin with, Alaska coal is much lower in sulfur that midwestern coal. Low-sulfur Alaskan coal typically has 0.2 to 0.6% sulfur; about 1/10 of the sulfur content of typical high-sulfur midwestern United States coal. 2% Current strict regulations will require scrubbing for all new plants burning Alaska coal. This means that new SO2 emissions from new plants will be less than 1/100 of older plants burning high-sulfur midwestern coal. NITROGEN OXIDE Nitrogen oxide compounds (NOx) are formed as_ high temperature combustion by-products when any fossil fuel is burned. Two sources of nitrogen contribute to NOx formation: 1. Chemically bound nitrogen that is part of the fuel's organic matrix. 2. Atmospheric nitrogen from combustion air. At high temperatures, nitrogen combines with oxygen to form nitric oxide (NO). As combustion gases cool and are exposed to more oxygen, nitric oxide is oxidized to nitrogen dioxide (NO2). The following equations summarize general reactions: 2NH3 + O2 - 2 NO + 3 HQ Fuel-bound nitrogen No +1/202 - 2 NO Atmospheric nitrogen NO + 1/2 O92 - NO2 Nitrogen dioxide formation Nitrogen dioxide is formed when gasoline or diesel is burned in vehicles, and when gas, oil or coal is burned in power plants. Nitrogen dioxide can be further oxidized in the atmosphere to contribute to low pH acid rain. A general rule is: the higher the burning temperature the higher the NOx. Current regulations place strict controls on power plant NOx emissions. Modern plants burning subbituminous Alaska coal will emit less NO, than many diesel-fired Alaska power plants, and a little more than Alaska gas-fired generating systems. NOy emissions are controlled in coal-fired plants by lowering combustion temperatures. The furnace area is increased to provide a greater area for heat absorption and combustion is "staged". Staged coal burning occurs in two steps: a Stage 1: Pulverized coal is mixed with insufficient air for complete combustion = and ignited. re Stage 2: Additional air sufficient to complete combustion is added after most of Stage 1 air has been consumed. The effect of burning coal in two stages is to lengthen burning time and reduce the flame temperature. The same amount of heat is released, but over a longer time period. Low NOy staged burners can produce less than one-fourth the NOx of conventional burners. Additional concurrent NOy removal may be possible with certain SO 2 scrubbing systems. Spray dry SO2 scrubbing systems have shown NOx removal up to 50% while maintaining 90% SOz removal. Spray dry SOj removal is well proven, while simultaneous SO2 - NOx removal is still being developed. ACID RAIN ACIDITY IS A REAL PROBLEM Forests and lakes in some areas of North America and Europe have been damaged by an increased level of acidity. This process was first observed more than a century ago in industrialized parts of England and Scotland. It is unclear, however, which industrial sources are the primary contribu- tors to acid rain. THE CAUSES OF ACID RAIN Acid rain is a shorthand term for a complex phenomenon that begins when emissions of various nitrogen and sulfur compounds from both natural and man-related sources oxidize in the atmosphere. The reaction produces acidity in rain or snow which then falls on vegetation, soils, and surface waters. Rain also traps windblown dust which may be strongly alkaline or acidic. volcanic eruptions, wildfire, lightning, emissions from living organisms, and other natural phenomena all release carbon, nitrogen, and sulfur compounds into the atmosphere, Human activity in industrial societies contributes to the already sizeable natural concentrations of organic acids and oxides of nitrogen and sulfur in the atmosphere. Old coal-fired electric power plants (not equipped with modern emission control technology) and mineral smelters are major man-made sources of sulfur oxides. Nearly all forms of fossil fuel combustion, including those associated with automobiles, emit nitrogen and sulfur oxides. STEPS BEING TAKEN TO COMBAT ACIDITY PROBLEM As the sources of acidity in the atmosphere are varied and complex, quick fixes are not _ possible. Industry, however, has made some major advances. Automobile emission control has been improved. The use of low-sulfur fossil fuels is being encouraged. And gas-stack scrubbers have been installed in many power plants. 5-10 In Japan, more than 1,100 scrubbers are now in service. The result is that air pollution from the industrial combustion of fossil fuels has been reduced to less than half the 1968 level, even though energy consumption has doubled. ACID RAIN AND ALASKA Scientists generally concur that acid rain is not likely to be a problem in Alaska. Our coal ranks among the cleanest in the world with only 0.2% to 0.6% sulfur content. This compares to 3% to 6% in other parts of the country. In addition, any new power plants built in Alaska must, by federal statute, be equipped with an SOQ removal system that reduces the already small amount of sulfur by up to 90%. S> 11 COAL AND WATER THE USES OF WATER IN A COAL-FIRED POWER PLANT The overall consumptive use of water by a coal-fired utility is relatively small because of extensive recycling and the fact that in Alaska evaporative losses are low. Water is used in the boiler and for a_ variety of miscellaneous uses including domestic uses. The largest potential use of water is in cooling towers where it is used to cool and condense the steam after it has passed through the turbine, Water is circulated through the cooling tower where it is cooled much like water in an evaporative cooler. It is then recycled. It may be feasible to use air cooling in Alaska. KEEPING WATER SUPPLIES CLEAN Congress passed amendments to the federal Water Pollution Control Act in 1972 which required the establishment of "New Source Performance Standards" (NSPS) for a number of industries. These standards set strict requirements on the amount of pollution which can be released from new plants. A new power plant in Alaska would release some steam but would have no discharge of liquid effluents. Waste water would be treated and reused. Process water created would be properly disposed of or allowed to evaporate in ponds, and the subsequent solid wastes would also be properly disposed Of. 5-12 CARBON DIOXIDE AND THE "GREENHOUSE EFFECT" The carbon dioxide content of the atmosphere has been gradually increasing since about 1860. The global increase in CO2 is partly due to fossil fuel combustion and partly related to deforestation and other natural and man-caused activities. Scientific estimates of the effects of C02 increase have varied widely, but it is reasonable to believe that it will lead to a gradual increase in the earth's temperature, perhaps one to two degrees centigrade globally by the year 2025. Part of the complexity in predicting both the rates of CO2 increase and temperature increase is related to complex natural cycles that involve CO2. For example, the assumption that there will be a continued CO increase cannot be made categorically because of uncertainties on _ the equilibrium reactions between the oceans and carbon dioxide. Although some observers have made catastrophic predictions relating to temperature increase, the consensus of scientific evidence is that there is adequate time to monitor atmospheric CO2g trends and their effects before trying to impede fossil fuel consumption for transportation and power generation uses. 5-13 COAL AND DUST SOLVING DUST PROBLEMS FROM STORING OR MOVING COAL Today's coal handling systems utilize advanced control technology to reduce practices that caused dust problems in the past. Under current federal and state laws, coal handling systems cannot operate until the proper controls have been installed and are operationally functional. As examples, coal stockpiles are covered or protected by surface coatings and coal conveyors to thermal plants are commonly covered to control dust. 5-14 STEAM GENERATION Electricity is generated from a coal-fired power plant in much the same manner as oil or gas-fired steam generating plants. The primary difference in the systems is plant design for coal and ash handling. Coal contains more mineral matter (ash) than oil, while gas is ash-free. Modern coal plants are designed to remove this ash before plant exhaust leaves the stack. The following steps summarize the most common type of coal-fired power plant operations (see graphic on page 6 of Executive Summary): ales Coal is pulverized to a fine powder. a Powdered coal and air are mixed and burned in the furnace zone. re The hot combustion gases and radiant energy heat convert water in boiler tubes to high pressure steam, 4. The high pressure stream drives a steam turbine, which is connected to the electrical generator. Bre After combustion gases heat water to steam, acid gases (SO2, etc.) and fly ash are removed before cooled, cleaned exhaust exits the power plant stack. PLANT DESIGN REQUIREMENTS Modern coal-fired power plants must conform to strict federal and state emission regulations called "New Source Performance Standards" (NSPS). These regulations did not affect the design of older plants; those built before 1979 and especially plants built prior to 1971. Modern plants must be designed to meet this strict new regulations by minimizing nitrogen oxides (NOx) formation, sulfur dioxide (S07) emission, and particulate (fly ash) emissions. This is accomplished by: fee Altering the plant design so the combustion zone can operate under different conditions and at lower temperatures. This reduces NOx, formation and emissions. 6-1 2. "Scrubbing" the cooled combustion gases with a basic solution of lime or limestone. This removes 90% or more of the SO2 from already low-sulfur Alaskan coal. Additionally NOx removal is possible with some SO scrubbing systems. Se Capturing particulate fly ash in a "baghouse" or "electrostatic precipitator" (ESP). State of the art designs remove essentially all (99.9+%) of the ash before clean combustion gases exit the plant stack. COMPARISON OF OLD AND NEW PLANTS All currently operating coal-fired plants in Alaska were built before 1970 and are not regulated by NSPS. These plants are generally small and, because they burn low-sulfur Alaskan coal, do not emit substantial amounts of SOg and particulates. Even though the emission levels of existing small scale Alaskan coal-fired plants are minimal, it would be wrong to scale their emission levels up to compare with a larger modern plant firing Alaskan low-sulfur coal. As has been previously stated, new coal-fired plants would be subject to strict NSPS regulations that would greatly reduce new plant emissions. In fact, a modern 200 MW coal-fired plant, equip- ped with a state of the art scrubber and baghouse system, would emit significantly less SO2 and particulates than an older 25 MW plant, equipped with a typical ESP built before 1970 (both plants burning pulverized, low-sulfur Alaskan coal). The additional costs for particulate and gas removal are substantial. About 20% of the capital cost for a new coal- fired generating system is associated with pollution control equipment. Nevertheless, coal remains a competitive fuel for power generation. OTHER TYPES OF COAL-FIRED PLANTS BEING DEVELOPED The preceding sections have dealt with improvements in conventional boilers where modification of combustion has led to decreased NOx and where addition of scrubbers greatly decreased the amount of SO2 in flue gas. An alternative boiler technology now being vigorously pursued is that of fluid bed combustion. In a fluid bed boiler, the solid fuel feed is injected into a bed of ash or sand. Air is forced into the bed from below, and the bed and fuel materials behave like a fluid. The fluidized particles yield a very high rate of heat transfer, three or four times that available by convection or radiation above. Thermally therefore, the process is a efficient way of transferring heat to boiler tubes within the fluidized system. But there are also advantages in pollution control. Pulverized lime- stone can also be injected into the system, and the limestone captures SO2 directly by the following reactions: Limestone . ...... . . . CaO + COQ 2 SO2 + 2 CaO + O02... .. . 2 CaSO4 The combined reactions are at peak efficiency at 1,500 to 1,600°F, as against conventional boilers operating at 2,000 to 2,500°F. The lower operating temperatures minimize formation of NOy, because molecular (atmosphere) nitrogen does not begin to oxidize until about 2,200°F. The simple or classical fluidized bed reactor has been modified to circulating fluid bed units, where ash, lime- stone, and unburned carbon are circulated continuously to promote complete combustion of coal and removal of SO2. Technology is developing extremely rapidly. In a review article in Power (February 1985), it was noted that three electric utilities have committed to spend $300 million on three fluid bed demonstration plants ranging in size from 100 to 160 MW. Paul F. Fennelly in American Scientist (1984, p. 260) noted that worldwide there were more than 100 fluidized units burning coal or wood waste and producing from 4 to 350,000 pounds per hour of steam. TECHNOLOGY IS STILL DEVELOPING Although conventional coal-fired boilers have _ been improved or modified to minimize production of SO2 and NOx, and fluid bed technology is being developed, there are significant improvements which can_ still be made to conventional systems. Also, other technologies are being developed. Coal gasification, both underground (see In-situ Gasification, Glossary) and in plant (see Coal Gasification, Glossary) is an exciting development which is being tested at the pilot plant stage. 6-3 There is definite potential for continued improvement in three areas: 1) emissions, 2) higher thermal efficiency, and 3) | coat, Cogeneration, where part of the available heat is used for a secondary purpose at or near a thermal plant site, could be an especially significant development for Alaska. 6-4 PNW) COAL ON THE NATIONAL SCENE Following the spiraling oil price increase of the mid- 1970's, the American public and energy industry focused their attention on energy conservation and alternative domestic energy sources, During the last ten years, the growth rate of energy consumption has slowed significantly, and _ the gradually greater utilization of domestic resources has lessened the nation's dependence on foreign oil supplies. Playing a major role in this transition has been coal, whose role in electrical power generation is up about 15% over levels in the early 1970's. Several factors have combined to make coal an increasingly attractive source of energy. New mining and coal utilization technologies, combined with much stricter environmental regulations, have made the burning of coal a much cleaner process. Rapid development of low-sulfur western mines and continuing exploration in areas like Alaska, have made it clear that present and future coal supplies are abundant and secure, capable of supplying our needs for several hundred years. Finally, in terms of equivalent contained energy, coal is much lower in cost than its other prime competitors. THE ALASKA COAL INDUSTRY A large percentage of all domestic coal resources are located within the state of Alaska. This makes coal not only an ideal energy source for rapidly growing local needs, but a potential exportable resource as well. Alaska coals are strategically located to supply world export markets, particularly the burgeoning needs of the Far Eastern Pacific Rim countries, Alaska could become one of the world's major exporting regions in the decades ahead. With the development of major export markets, the coal industry will become an important contributor to Alaska's economic growth, providing an array of support industries, increased tax revenues, and greater numbers of jobs. Gradual market oriented and environmentally sound development of an Alaska coal industry will bring a great range of economic benefits to the state. T= REVENUES FROM COAL PRODUCTION A strong Alaska coal industry will mean, first of all, a much needed diversification of our economy. Long term jobs (30 to 50 years in duration) will be created for our people, and the ripple effect of these jobs in our communities will be substantial. In addition, revenues will be generated to help take up the slack if the North Slope oil flow begins to diminish. The following are the sources of more revenues: Le State and federal corporate income taxes. 2s State mining license tax. 3h State production royalties. 4. Property taxes. Su Land rentals and leases. 7-2 WHAT ALASKA NEEDS TO DO -- INFRASTRUCTURE (from Alaska Economic Report, February 28, 1982) Alaska has significant advantages in the competition for "steaming coal" markets in the Far East, but the timely development of key transportation infrastructure is essential if Alaska coal is to commend a respectable market Share. This was just one of the generally positive messages coming from the Alaska Coal Marketing Conference, held February 18 and 19 in Anchorage (1982), Sponsored by the Resource Development Council of Alaska. Alaska's advantages are: Le A large coal resource supply; 2. Strategic location of ample supply near tidewater, minimizing onshore transport; 3. Developable deep water ports for the largest coal carriers; 4. Proximity to the Asian market; Bs An advantage of installing modern coal terminal facilities; 6. Surplus public capital that can be used to defray the disadvantage of (5) new terminals, which is a high debt cost. Five of the six foregoing factors are transportation related advantages, which is significant, since transporta- tion constitutes two-thirds of delivered cost of coal _ in Asia. Such savings will help offset higher Alaska labor costs. In the past, Alaska's disadvantage has been its low grade (steaming) coal. (Editor's note: As Asian experience with low grade coals continues to grow, the decision on coal quality is increasingly merely an economic one.) However, Alaska also has disadvantages which must be recognized and responded to by developers and policymakers: ate Alaska has little coal mine operational experience at present, but fortunately has one modern operat- ing mine as a model (Usibelli). 2. Alaska must update and modernize the statutory and regulatory rules to guide and stabilize develop- ment. Si. The transportation and port infrastructure must be put in place, particularly the policy rules guiding such developments and expansions. However, assuming Alaska gets its "act together", there may also be advantage in the problems which plague competi- tive suppliers of steaming coal. For example, development of deeper draft westcoast ports or expansion of ports may prove difficult and prone to delay due to environmental litigation. The basic Alaska advantage is in its proximity to the Asian market, and the fact that two-thirds of landed coal price is transportation charges. The shorter distance may also permit Alaska to use the so-called wide-bodied coal carriers. The wide-bodied carriers can carry more tonnage while using less depth, but fuel costs are greater. However, the shorter distance in the Alaska case may make fuel a less Critical) factor. Additionally, while Alaska does not have established mine infrastructure, it does have an excellent railroad running right up the middle of the tidewater and inland coal belt. The railroad has 526 miles of main and branch lines, 1,800 rail cars, and 60 locomotives. The Usibelli Mine installed a rapid loading system for unit trains at Healy. 7-4 THE SEWARD COAL TERMINAL The commencement of Alaskan coal shipments to Korea Electric Power Corporation (KEPCO) represents the establish- ment of a dramatic new link in Pacific Rim energy trade. More than 11 million metric tons of coal will be moved during the 15 year contract period. The overall benefits will be felt in economic terms and in the foreshadowing of further expanded and improved trade relations between the Republic of Korea and Alaska. The pioneering efforts of the governmental and private sponsors of this project have produced a major new enterprise spanning the mining, trans- portation, and energy industries. The Seward Coal Terminal (SCT) is owned and operated by Suneel Alaska Corporation, a subsidiary of Sun Eel Shipping Co., Ltd. sctT's facilities have been designed and con- structed to work with the State of Alaska-funded dock and loading platform. Private and public financing for the total facility amounts to approximately $21 million. The port and upland facilities have been designed to move 800,000 metric tons of coal per year from the Usibelli Coal Mine at Healy, Alaska, through Seward to Korea. Vessels up to 120,000 dead weight tons will utilize the approximately 60 foot deep basin. SCT has an annual capacity of 3 million tons, in anticipation of the development of further coal or bulk material markets. The upland area was developed from 200,000 yards of dredged material that was molded to support coal handling equipment and coal stockpiles. SCT's land is leased from the Alaska Railroad for up to 55 years. Project components include a new railroad spur, a receiving hopper system, an extensive belt conveyor system, junction towers, rail shakers, a stacker-reclaimer, dust collection system, a stockpile spray water/fire fighting system, an operations/control building, 1,800 feet of dock trestle system, a dock to support an elevated shiploader, and various marine breasting and mooring dolphins. 77) WHAT ALASKA CAN DO -- RESEARCH (excerpt from paper by Dr. Joseph Leonard, Dean of the College of Mining and Energy Resources, University of West Virginia, Focus on Alaska's Coal Conference, University of Alaska, Fairbanks, October 1980.) A great deal of work needs to be done. Motivation can easily be derived from studying the experiences of Minnesota, Illinois, and West Virginia, to name a few. Many years ago at the University of Minnesota, during a period when the reserves of direct shipping iron ores appears to be unlimited, research was undertaken on the benefication of the iron bearing Taconites. This research must have looked irrelevant at the time that it was undertaken. Almost 40 years of work went into Taconite research before the actual use of this extremely finely disseminated iron ore was realized. When the seemingly inexhaustible direct shipping iron ores of Minnesota were finally depleted, private industry turned extensively to the years of documented research conducted by the University of Minnesota, and used these findings as a basis for giving birth to a whole new Taconite based industry in that state. This industry continues to flourish and grow. The experience of the State of Illinois closely follows that of Minnesota in that it was once believed that none of the Illinois coals could be coked. Nevertheless, the State of Illinois undertook 30 to 40 years of research work to overcome early doubts. This work eventually had a major impact on getting significant quantities of Illinois coal used in coke production. Hence, the usage of Illinois coal in coking is alive and well today thanks to far sighted research policies. A final and very recent example can be shown by some universities like West Virginia that, along with a number of federal agencies, conducted much research over many years on the mining, preparation, and utilization of coal, involving both gasification and liquefaction. The payoff to many years of coal research is evident in the many already-in-place mine site power stations, and the scheduled new liquefaction plants that are planned for development in different parts of the United States. Hence, one of the nation's first full scale coal-to-liquid commercial plants will be jointly con- structed at Morgantown, West Virginia by the’ federal government and private American industry, as well as with German and Japanese government participation. 7-6 The lesson that is clear for Alaska is that with oil flowing, and with the availability of financial resources, the development of more knowledge and understanding of Alaskan coal is needed. Although an excellent beginning has been made in your School of Mineral Industry, this is only a basic beginning. There is need for much more applied research involving a subStantial commitment of resources. There is an obvious need for more mining exploration research derived through extensive drilling programs, and making liberal use of mathematical based sampling theory. There is also a need for coal cleaning studies, mineability studies, transportation studies, and world market studies. Consideration should be given to the development of a complete coke testing facility with pilot scale coke test oven and petrographic laboratory. Tests of Alaskan coals with blends of other world coals could shed much light on some possible interesting combinations. Extensive coal characterization studies are needed to see how Alaskan coals differ from other comparable coals. Differences in coal properties determine whether coal will or will not be used. Cold weather extraction and transportation studies as well as studies based on the geographic position of Alaska relative to present and future markets are obvious and logical needs. An extensive compilation of the foregoing types of research can do much to hasten the time when Alaskan coals will be used. With an expected gradual increase leading to large increases in the use of Alaska coals, the state will greatly benefit by the many new developments taking place in the coal industry today. With such present and future developments, large-scale production of Alaskan coal may not suffer from the many problems encountered in other coal industries of the world. Finally, coal has always been a civilizing influence. When there are large reserves of coal such as the billions or trillions of tons that are estimated to occur within Alaska's borders, we can fully expect the eventual development of large permanent population centers. Many of the great popu- lations centers of the world were literally built and maintained on top of coal reserves. Gold rushes, oil rushes, and religious movements have had a powerful effect on the spreading and redistribution of population; but perhaps the greatest rush of all is the coal rush. It appears that Alaska's pending coal rush will be the next great and exciting event to happen to your state. dad PACIFIC RIM MARKETS Exporting Alaska's coal resources rankS aS a very popular concept in the minds of the Alaskan people. To most Alaskans, it is not just a good idea; it should be promoted by state government. In a July 1984 poll taken by the Dittman Research organization for the Anchorage Chamber of Commerce Energy Committee, 250 Anchorage residents were asked, "Do you feel the state of Alaska should or should not make a major effort to export its coal resources?" A resounding 79% said it should. THE APPEAL OF ALASKA COAL World coal markets have undergone significant changes in the past several years. Estimates of the price of coal on the world market are significantly lower today (1986) than they were several years ago. Most coal from Alaska is somewhat more expensive than other coals but other factors in addition to price are important to coal users. Coal buyers want a- secure, stable, and reliable supplier. Pacific Rim countries, major exporters of finished goods to the United States, are concerned about the balance of trade between their countries and the United States. Additionally, some other coals whose delivered price to the Orient is lower than Alaskan coal, are less expensive because ocean transportation rates have been artificially low due to worldwide shipping overcapacity. The strong dollar has also provided an artificial price advantage for other Pacific suppliers. Therefore, a number of Pacific Rim coal users are evaluating various Alaska coals. ALASKA'S ENERGY-HUNGRY NEIGHBORS Japan, Korea, Taiwan, Hong Kong, Singapore, and Malaysia, all must meet their growing coal needs with imported coal. Alaska's location provides a _ natural advantage over many other coals. For instance, it is 1,000 miles closer than Australia is to Japan. As supply and demand come back into balance for ocean freight, Alaska's locational advantage will improve in terms of the delivered cost of energy. 7-8 COMPETITION FOR THESE MARKETS In general terms, identified world coal reserves are large and located in countries anxious to develop and move the coal to market. Mining cost, heat, and sulfur content and the combination of inland and ocean transport are the principal economic considerations. World steam coal markets are very competitive. The worldwide economic slowdown in the early 1980's occurred dur- ing a time when coal productive capacity grew substantially in Australia, South Africa, Canada, and the United States. Now, in the mid-1980's, Colombia is emerging as a major exporter of steam coal. Both China and Indonesia are developing large reserves for domestic use and future export sales. Australia presently has a surplus capacity of about 5 million tons per year. Over the next three to four years, South Africa will have 7 to 10 million tons per year and Colombia will have 5 to 15 million tons of surplus capacity available. Government assistance and subsidies in these countries make their coal very competitive. The strong dollar has also assisted other countries and hurt potential United States exporters. The development of coal exports from China will not be rapid, because of the natural delays within their govern- mental system. Indonesia faces the problem of a shortage of capital that may prevent it from becoming a major supplier in the near future. THE PRICE OF COAL ON THE PACIFIC RIM In recent years, coal prices on the Pacific Rim have dropped. In 1981, per ton prices F.O.B. Japan were about $70, while 1985 spot prices range from $42 to $52 per metric ton. WHY, THEN, ARE PROJECTIONS FOR ALASKA COAL OPTIMISTIC? The market is growing with the economic recovery in the Pacific Rim. Japanese steam coal imports alone grew from 7 million tons in 1980 to 15 million tons in 1983. Excess supply capacity will be worked down, and an_— export 7-9 opportunity will exist for Alaska coal. Forecasts for steam coal demand in Pacific Rim countries range from a low of 61.5 million in 1985 to 86 million tons in 1995. Furthermore, the inordinately strong U.S. dollar is expected to fall back, thereby strengthening exports of United States coal. Korea is already importing over one-half million tons of Alaskan coal a year from the Usibelli Coal Mine. This contract is an excellent door-opener. Markets are expected to exist for more Alaska coal in Japan by 1990 and in Korea and Taiwan between 1990 and 2000. 7-10 PUBLIC ATTITUDES In July 1984, an electrical power generation survey was conducted by Dittman Research Corporation for the Anchorage Chamber of Commerce Energy Committee. During the period of July 19 through July 30, 1984, 250 residents from Anchorage were personally contacted by telephone by professional interviewing employees of the Dittman Research Corporation, The views and opinion of the Anchorage residents were recorded on a strictly confidential basis, The following is a partial report on the finding's of this poll: FINDINGS: Overall, nearly four out of five Anchorage residents (79%) feel the state should make a major effort to export our coal resources... "Do you feel the state of Alaska should or should not make a major effort to export its coal resources?" Should......... 719% Should not.....18% ..-however, approximately three out of four (62%) feel we should also use coal in-state as well... "As far as coal and hydro are concerned, do you feel the emphasis should be on exporting our coal resources while using hydro in-state, or should both hydro and coal be used for in-state electrical power generation?" Export coal/hydro in state..... 29% Use both in-state........cs.ece 62% »..and an identical percentage (62%) reported they would not be willing to pay 10% more for hydro-generated electricity... 7-11 "Would you be willing to pay 10% more for your electrical power if it came from hydro rather than coal?" Yes.....35% NO......62% CONCLUSIONS It is clear most Anchorage residents support’ the development and export of Alaska's coal resources (79%) and they also support in-state usage, too (62%), especially if it would mean lower cost electricity and if environmental concerns can be handled. 7>12 [2 JOBS IN THE COAL pla JOBS IN THE COAL INDUSTRY Regardless of direct cost comparisons which can be made between gas, coal, and hydro, coal has one significant economic advantage over its competitors. Simply put, if costs between the alternatives are at all correlative, coal has the advantage of guaranteeing local recirculation of dollars better than either gas or hydro. Coal mining and power-generation from coal are more labor intensive than the alternatives. Most of the gas dollars will go to the resource owners; most of the dollars for hydro will go to debt service; but over half of all coal dollars will be dispersed to local labor and suppliers. MINING Mining operations require a wide variety of professional and labor categories including electricians, heavy equipment operators, mechanics, drillers, laborers, truck drivers, secretaries, engineers, scientists, foremen, bookkeepers, welders, warehousemen, salesmen, and plant operators. Some, such as mechanics and engineers, are _ highly skilled. Other, such as truck drivers and warehousemen, require less training. But all categories of labor and management required can be met in Alaska. Coal mines typically operate all year. Employment is permanent and steady, providing rewarding and stable careers for the men and women in the coal mining industry. COAL INDUSTRY EMPLOYMENT IN ALASKA It takes about seven years to permit and construct a 200 MW coal-fired power plant. The number of construction workers required varies, peaking at about 500 by the end of the second year of construction and falling off near the end of the fourth year. Operation and maintenance of such a plant requires an estimated staff of about 100 to support a 3-shift, 24-hour-a-day operation over a 40 to 50 year plant life. The mining operation to support a plant of this size would employ an additional 100 to 150 people. 8-1 The most important jobs in any economy are those in the basic industries. These year-round jobs form the base from which other jobs are provided in the supporting supply and service business. That is why Alaska needs an economy which includes these basic industries. The related jobs provide consumers who are able to purchase other goods and services. The effect of this local economic activity will ripple through the entire Alaska economy. A coal-fired power plant will provide diversification to the mix of electrical generating systems and represents a source of clean, competitive reliable power. An additional benefit of a coal-fired power plant is the increased tax base for the borough in which it is sited. 8-2 wa GLOSSARY GLOSSARY Anthracite: Hard, shiny coal with a fairly high heating value, typically about 13,800 Btu per pound. It contains 3 to 5% moisture and over 80% carbon. Bituminous: Soft, black coal with a medium to very high heating value, ranging from 11,000 to 15,000 Btu per pound. It contains 2.5 to 15% moisture and from 45 to 80% carbon. A ton of bituminous coal (at 12,300 Btu per pound) contains about as much energy as 4.3 barrels of crude oil or 23,400 cubic feet of natural gas. Btu (British thermal unit): The amount of heat energy neces- Sary to raise the temperature of one pound of water one degree Fahrenheit. The standard unit for measuring quantity of heat energy, such as the heat content of fuel, in the British system. In metric units an equivalent system compares calories to kilograms. Coal gasification: Conversion of coal by chemical and physical transformation into synthetic gas is termed coal gasification, Synthetic gas can be produced either by processing mined coal through gasification plants or by using underground gasification methods. Basic coal gasification is a process that reacts crushed coal with steam and oxygen. A stream of sized coal particles is fed into a pressurized reactor where oxygen is introduced to raise the temperature. Additional hydrogen and carbon monoxide are produced by reacting coal with steam. The complex chemical reactions involved produce a low Btu synthetic gas. A second costly step combines carbon monoxide and hydrogen, in the presence of a catalyst, to produce methane (the major component of natural gas). Coal_ liquefaction: Coal can be crushed to a powder and decomposed with heat at a high pressure to produce a liquid fuel in a complex chemical process based on the interaction of hydrogen and a slurry of coal particles. The three basic processes under development are hydrogenation, pyrolysis, and catalytic conversion. Coal _ reserves: Coal deposits that can be mined profitably. The term reserve contrasts with resource. Both reserves and resources are subdivided into Measured, Indicated, Inferred, and Hypothetical classes depending on the amount of informa- tion available. The terms differ in that reserves are mineable with present economic conditions, but resources include deposits that are not now economic. 9-1 Continuous underground mining: Mechanized mining that produces more an half of the coal mined underground. Mining machines cut through the coal layers with revolving steel teeth. Using a continuous mining machine, one worker can dig as much as 12 tons (11 metric tons) of coal a minute. The machine digs and loads coal faster than it can be removed from the mine, so it is stopped often to let loading and roof bolting operations catch up. Conventional deep mining: This approach produces about one- third of U.S. coal mined underground. At the face of the coal seam, holes are drilled into the exposed surface. A machine resembling a chain saw with a 20 foot blade cuts a long slit along the base of the coal. Compressed air or explosives are used to break up the coal. Miners control a loading machine which has steel arms to sweep the coal chunks onto a conveyor belt or into shuttle cars. As mining pro- gresses long steel bolts are inserted in the ceiling to support the roof. Gigawatt: One billion watts or 1,000 megawatts. Heat rate: Btu/net Kwh. Computed by dividing the total Btu content of fuel burned for electrical generation by the resulting net kilowatt hour generation. Hypothetical resources: Undiscovered mineral resources that we may still reasonably expect to find in known mining districts. Identified resources: Specific bodies of mineral-bearing rock whose existence and location are known; identified resources include reserves and identified subeconomic resources. Inferred resources: Resources for which there are quantita- tive estimates of tonnage and grade made only in a general way, based on geologic relationships and on past mining experiences, rather than on specific sampling. In-situ gasification: In-situ coal gasification, also known as underground coal gasification (UCG), is a developing tech- nology to extract the heating value of coal by gasification of the coal in-place without the need for conventional mining. ucG is an attractive potential for coal resources that are considered unrecoverable by conventional mining methods. The process involves limited surface disturbance and uses conventional and directional drilling technology to inject air or oxygen and to recover the product gases. The product is a low to medium heating content gas which would 922 normally be upgraded by subsequent surface facility process- ing to a pipeline quality or to other liquid or gaseous fuels and hydrocarbon products. Kilowatt: 1,000 watts. A unit of electrical power indicating the rate at which electrical energy is being produced or being consumed. Kilowatt hour (Kwh): The basic unit of electric energy equal to one kilowatt of power supplied or taken from an electric circuit steadily for one hour. For example, a 100 watt bulb burning for 10 hours will consume one kilowatt hour of energy. The average family in southcentral Alaska uses 9,000 Kwh of electricity per year. Note: in the typical power plant, it takes about 2-1/2 pounds of coal to generate one kilowatt hour of electricity. Lignite: A soft brownish-black coal with low to medium heating value ranging from 4,000 to 7,000 Btu per pound. It generally contains over 30% moisture and has less than 35% carbon. Longwall mining: An underground mining method which permits removal of up to 80% of the coal. Self-advancing hydraulic supports are used to prop up the mine roof while large, mechanical shears cut out the coal and place it on a conveyor. As the roof supports move forward, the unsupported overburden is allowed to collapse safely behind the area where miners are _ working. Because of the nature of geological structures and the large capital investment, only 5% of U.S. coal is mined by the longwall method. Mcf: 1,000 cubic feet of gas; the common unit of measurement of gas volume; the amount of gas required to fill a volume of 1,000 cubic feet under stated conditions of temperature and pressure, An mcf is equivalent to MMBtu. Measured resource: A resource whose quantity is determined from dimensions shown in outcrops, trenches, drillholes or mine workings, where quality is indicated by detailed sampling, and the sites of measurement and sampling are spaced so closely that size and quality of the deposit is well established. A measured resource that can be mined profitably is a measured reserve. Megawatt: A unit of power equal to 1,000 kilowatts or one million watts. Peak capacity of 650 megawatts is needed for today's consumers in the Railbelt region. Metric ton: One metric ton is equivalent to approximately 2,204 pounds. NSPS: "New source performance standards" which apply to all new coal-fired plants. These standards were established in the 1970 amendments and were modified in the 1977 amendments to the federal Clean Air Act. Proven reserve: See measured resource. Room and pillar mining: Both conventional and continuous underground mining use the room and pillar method of mining. As the coal is removed, rooms are cut into the coal seam with pillars of coal left in place to support the roof. Tunnels 14 to 20 feet wide intersect like city streets every 40 to 80 feet. Some pillars may be removed later, increasing the coal recovery. Depending on the engineering principles used, the supporting pillars often represent half of the coal left in the mine (see longwall mining). Short ton: One short ton is 2,000 pounds. SIP: "State Implementation Plan", a requirement of the 1970 Clean Air Act. Subbituminous: A soft, black coal of medium heating value, ranging from 7,000 to 11,000 Btu per pound. It generally contains 15 to 30% moisture and approximately 40% carbon. Subbituminous coal resources of Alaska are very low in sulfur content. Surface mining: Generally used where coal is within about 150 feet of the surface. It is safer, more economical, and on an average three times more productive than deep mining, recovering up to 90% of the coal. Surface mining currently accounts for about 60% of U.S. coal production. In most surface mining, huge dozers or draglines first remove the overburden of soil and clay. Then explosives are used to shatter rock overburden, which is removed and placed to one side. The exposed coal, in seams up to 120 feet thick, is broken up, loaded into trucks, and hauled away. Underground mining: About 40% of U.S. coal is extracted by underground mining. Where the coal is exposed, mining begins directly into the coal seam. Otherwise vertical shafts or sloping tunnels are dug to the coal level where mining can begin. These shafts are used to move workers, materials, and air into and out of the mine. (See also continuous under- ground mining, conventional deep mining, room and pillar, and longwall mining.) 9-4 Volt: Unit of electric pressure that causes current to flow through a wire (similar to water pressure through a garden hose). Watt: The electrical unit of power or rate of doing work; analogous to horsepower of mechanical power. One horsepower equals approximately 746 watts. > L B e ° © a bd a] Bs < REFERENCES AND GENERAL BIBLIOGRAPHY Alaska Power Authority, 1985, Susitna Hydroelectric Project: Introduction to the amendment to the license application before the Federal Energy Regulatory Commission. Economic and environmental summary, comparison with thermal power Barnes, F.F., 1966, Geology and Coal Resources of the Beluga- Yentna Region Alaska: U.S. Geological Survey Bull. 1202- Cc. Standard reference to Beluga and adjacent fields Barnes, F.F., 1967, Coal Resources of Alaska: U.S. Geologi- cal Survey Bull. 1242-B. Best older summary of total Alaska Coal Resource Barnes, F.F., 1967, Coal Resources of the Cape Lisburne- Colville River Region, Alaska: U.S. Geol. Survey Bull. 1242-E. Standard reference to western part of Northern Alaska Coal Fields Barnes, F.F. and Payne, 1T.G., 1956, The Wishbone Hill Dis- trict, Matanuska Coal Field Alaska: U.S. Geol. Survey Bull. 1016. Standard reference to most important part of Matanuska Coal Field Brooks, A.H., 1901, The Coal Resources of Alaska, in U.S. Geol. Survey 22nd Anniv. Report, 1900-1901, Pt. III (1902), p. 515-572. First systematic appraisal of Alaska's coal potential Brooks, A.H., 1909, Mineral Resources of Alaska, in U.S. Geol. Survey Bull. 394, p. 172-207. Coal potential updated to 1908. 10-1 Edgar, D.E., Onesti, L.J., and Kaszynski, G.M., 1982, Alaskan Coal: resources and development constraints: Argonne Nat'l Lab. Rept. ANL/LRP-18, p. 77-82. Major source for "Significant Events in Alaskan Coal Development" Fennelly, P.T., 1984, Fluidized Bed Combustion: American Scientist, Vol. 72, p. 254-261. Comprehensive popular article on fluid bed combustion, including circulating fluid bed Gates, G.O., 1946, Coalfields of Alaska, in Analyses of Alaska Coals: U.S. Bur. of Mines Tech. Paper 682, p. l- 9. Major update in Alaska coal potential McConkey and others, 1977, Alaska's energy resources: Final Report, Phase 1, Vol. II, Inventory of oil, gas, and uranium resources: Alaska Div. of Energy and Power Development, Contract No. EY76C-06-2435, Dept. of Energy. McGee, D.L. and O'Connor, K.M., 1975, Cook Inlet Basin subsurface coal reserve study: State of Alaska, Div. of Geol. and Geoph. Surveys Open-File Rept. No. 74 Power (Trade Journal), 1985, Fluidized Bed Boilers achieve commercial status worldwide, Special Report, p. 5-l to 5-16, Power, Feb. 1985. Update on commercial applications and vendors, worldwide Rao, P. Dharma and Wolff, E.N., 1975, Focus on Alaska Coal, Proceedings of the Conference, Univ. of Alaska, Fairbanks, Oct. 15-17, MIRL Rept. 37. Rao, Bi Dharma and Wolff, E.N., 1978 and 1980, Characteristics and evaluation of washability of Alaskan coals, Pt. 1 (1978) Rept. No. 41, MIRL, Univ. of Alaska, Pt. 2 (1980), Dept. of Energy ET/78 G-01-8969. Summarizes quality of Alaskan coals, especially as they may be upgraded by washing Reed, B.L. and others, 1978, Folio of the Talkeetna Quad- rangle: U.S. Geol. Survey MG Map 870-D. LO=2 Sanders, R.B., 1982, Coal resources of Alaska, in Alaska's Oil/Gas and Minerals Industry, Alaska Geographic Society, V. 9, No. 4, p. 146-165. Well illustrated popular account of Alaska's coal resource Sanders, R.B., 1980, Focus on Alaska Coals 1980 Conference, Oct. 21-23, 1980, Univ. of Alaska. Major source of Section 2 Schaff, Ross G., 1983, Coal Resources of Alaska Reference Division of Geological and Geophysical Surveys, Informa- tion Circular 17. Source of table of coal resource in Section 2 Swift and others, 1980, Beluga Coal Market Study: Batelle Northwest Laboratory, Contract No. 2311104261, Div. of Policy Development and Planning, State of Alaska. U.S. Bureau of Mines, 1970, Energy Resources, esp. Anthracite and Bituminous Coal and Lignite, in Mineral Facts and Problems, 1291 p. esp. p. 13-61. General reference on coal availability, use, and future demand U.S. Geological Survey, 1964, Mineral and Water resources of Alaska: Committee Report, United States Senate, 88th Congress, esp. p. 77-94. Summary of coal resource through 1963 U.S. Geological Survey, 1973, Coal, in United States Mineral Resources: U.S. Geol. Survey Prof. Paper 820, p. 133- 142. Standard reference, coal resource of the United States Van Krevelen, D.W. and Schuyer, J., 1957, Coal Science, Elsevier, London. Standard reference and source of data for table in Section 1 10-3 Wahrhaftig, J.A. and others, 1969, The coal-bearing group in the Nenana coal field, Alaska: U.S. Geol. Survey Bull. 1274-D. Standard geologic reference on Nenana field (see also Bull. 963-E) 10-4 For more information, please write C.O.A.L. Post Office Box 101 Healy, Alaska 99743