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JUN 11 l:iol
EBAscn SERVlGES INCORPORATED
ENVIROSPHERE COMPANY
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Ward H.Swift
May 1981
COl1lnent Draft Working Paper No 1.2
ALASKA COAL FUTURE AVAILABILITY
AND PRICE FORECASTS
Prepared for
Office of the Governor
State of Alaska,
Division of Policy Development
and Planning and The Governor's
Policy Review Committee
under Contract 2311204417
Battelle
Pacific Northwest Laboratory
Rfchland,Washington 99352
[}{]£OO{g£c §IID&®@@
Susitna Joint Venture
Document Number
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DOCUMENT CONTROL
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CONTENTS
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TABLES
FIGURES
4 ..1 Preliminary Projection~of Steam Coal Imports by
Country--MMTPY.• • • • • •
4.2 Estimated Total Export Steam Coal Production for Non-U.S.
Countries Servicing the Pacific Rim.Markets.• •
4.3 r';arket Share of Stearn Coal T."acie in the Pacific Rim
4.4 Steam Coal Prices Sanded in Hapan and Net-Back to
Alaska-Current 1980 $'s/MMBtu • • •
4.1 Procedure for Estimating Steam Coal Price Escalation--
Pacific Rim Markets II ••••••••..12
4.2 Composite Export Steam Coal Supply Function FOB
Australia--Current 1980 0011 a,rs •......<>....13
4.3 Composite Export Steam Coal Supply Function FOB
South Ptfri ca--Current 1980 Dollars ....~•....•14
•4.4 Composite Export Steam Coal Supply Function FOB
Canada (British-Columbia)--Current 1980 Dollars
(Less Fraction to Met-Coal Market)15 IJ..•....•..•
4.5 Estimated Coal Prices FOB Port of Origin Current
1980 Dollars ••........••••..17
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In the context of central station utility supplied electric power,
coal-fired thermal generation is an obvious alternative to hydroelectric or
the presently predominate natural gas/oil-fired generation systems in the
Railbelt region.Given the expected costs (as developed in this report)of
coal in the Railbeltregion,coal-fired thermal generation is a clear
alternative to other concepts particularly for base-load generation.Direct
coal-fired steam electric plants are not however suitable for peaking
service.Coal gasification coupled with combined cycle power generation and
off-peak methanol synthesis (a load leveler for the gasification plant)is
also an alternative worthy of consideration.Additional reasons for
considering coal are as follows:
-Resources within the region are very large and can or could be made
available at significantly lower costs (heating v~lue basis)than
Oil or natural gas particularly over the 10i.g term.
The nature of steam coal markets and resources are such that price
escalation Over and above general inflation is not expected to be as
high as for oil or natural gas.
-Long term supply contracts can be entered into thus establishing
relatively predictable future costs.
-National policy certainly encourages coal use in place of gas and
oil if not outrightly mandating its substitution for these fuels in
large scale operations.
Two major surface minable coal reserves are located within the Rai1belt
Region.These are the currently producing Nenana Coal Field near Healy (and
connected to the Alaska Railroad);and the Beluga/Chuitna coal fields (not now
being produced)remotely located on the west side of Cook Inlet.Other coal
reserves occur on the Kenai Peninsula and in the Matanuska Valley.The former
are in the form of thin,lenticular deposit,>not suitable for largescale
mining,and the latter requires more costly underground mining techniques.
1.0 INTRODUCTION
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Still ether rescurce$occur in the lower Susitna Ba~in and in the Jarvis Creek
area..Little reserve data ;s avvailable for these latter areas and costs are
speculative.
The Nenana Coal Field is now being produced by Usibel1i Coal Mine,Inc.
at a rate of about 700,000 tons per year.Coal is supplied by truck to the
near-mine-mouth 25 MW Healy generation plant of the Golden Valley electric
Association.The Healy plant operates in a base load mode.Additional coal
is crushed and marketed via the Alaska Railroad to the Fairbanks Municipal
Utilities System,the University of Alaska,and the military installations at
Cl ear AFB,Eie 1son AFB and Fort Wa i nwri ght.More recent ly,export market
test'ing has occurred to the cement/lime industry in Korea via the Alaska
Railroad and the Port of Anchorage.
The Beluga/Chuitna coal fields at ~now in the exploratory and
pre-development phase.Located in a regien with very little to no
infrastructure development,these ....t'ieldswhile containing very large reserves,
are not likely to be produced unless a firm mark.;;'L of 5 or more million tons
per year can be established.On an electric power equivalent basis,this
annual tonnage amounts to aboutl~lOO MW of base loaded coal-fired power
g\"..:neration capacity or just slightly less than eqUivalent to the proposed
combined (Watana plus Devil Canyon),Susitna hydroelectric devel~pment
capacity ..(a)
Should coal fired power generation become a significant factor in the
Railbelt,it ;s likely that generation capacity would be added in the
increments ranging from 200 to 400 MW.It appears that this staging
t'equ;rement would not,in itself,support opening of the Beluga/Chuitna coal
fields for local consumption.Nevertheless,the outlook for developing the
Beluga/Chuitna fields for export to Pacific Rim markets appears quite
favorable.
(a)On an annual energy basis,a fully developed Upper Susitna hydroelectric
system is expected to produce about 6.1GWH (gigawatt hours)per year as
limited by hydrologic considerations.The 1)100 MW's of coal fired
generation would produce about 767 GWH per year under base load conditions.
·...
However,Placer Anlex Inc.and the Bass-Hunt-Wilson Group,the major
leaseholders in the Beluga/Chuitna region,are persuing coal-to-methanol
conversion and a direct export mine respectively.
This report evaluates the future availability and expected prices of the
potential major sources of coal supply in the Railbelt Region including the
cost of rail transport (if necessary)to potential coal-fired power plant
sites ..
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$/MM Btu
0.27
0.41
0048
0.56
0.63
Site
Nenana(a)
Willow
Matanusha(a)
Anchorage
Seward
4
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2.0 EXECUTIVE SUMMARY
Two significant sources of Surface-minable coal appear appropriate for
consideration in electric power planning for the Railbelt region.These
include the now producing Nenana Field near Healy and the prospective
development of the Beluga/Chuitna fields on the west side of Cook Inlet.
The Nenana Field,now being produced by the Usibelli Coal Mine Inc.at
about 700,000 TPY could be expanded to about 4-million TPY with additional
major equipment such as draglines.Current equipment is limiting to ~bout
2-mil1ion TPY.Marketing of2-million TPY of Nenana Field coal in ala~ka
could support about 800 MW's of coal-fired,base loaded steam electric power
prod~Jcti on.
For the 1980 base year,the coal price FOB the Nenana Field tipple is
$1.20/MM Btu.According to the Usibelli Coal Mine Inc.,th,s price is not
expected to escalate in real terms and could in fact decline slightly as
incremental production increases equipment utilization.Depletion is not
believed to be a problem over the next several decades even at high mining
rates.The Alaska Railroad serves the Nenana Field and could provide unit
train coal shipments to potential power plant site!;along the railroad right
of way.Transportation costs from Healy would be as follows:
Ca)Candidate siting areas.
Approximately 30%of the transportation cost is associated with fuel
consumption (diesel)and hense is subject to any real escalation in Vlorld 0;1
prices.
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The Beluga/Chuiti'i~fields are yet to be produced in any significant
quantity and thus,from an availability standpoint,must be considered
pro!cpective.Mine and infrastructure development wi 1i be dependant on
successful establishment of a market which could support a production roate of
more than 7 MMTPY.From a power production standpoint,this amounts to about
2,900MW of baseload coal fired generation capacity.Clearly the
establishment of an export market is a necessary precursor to the availability
of Beluga/Chuitna coals for in-state use at reasonable costs.
The Pacific River market for steam coal is expected to expand rapidly in
the coming decades as consumers seek to convert away from high cost oil and
LNG.As a consequence,it appears very likely that an export market will be
established in the 1980·$and that Beluga/Chuitna coal will become available
possibly as early as 1986 but with more certainty by 1988 ..
Expected market conditions and production costs for the Beluga/Chuitna
Fields are such that coal fot'"in-state use at limine mouth ll should cost close
to $1~10/MM Btu in 1st quarter 1980 dollars.Further,market conditions are
expected to be such that the cost will escalate in real terms at near 1.5%per
year.
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8000 Btu/lb
7-8%average
11%max.
25-30%
'U34 as mined
210QoF
.08%
<O.25%
0.60%
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Heating Value (coverage)
Ash Content
Moisture
Hardgrove Grindability Index
Ash Softening Temperature
Ash Na,r Content
Sulfur Content
Nitrogen Content
3.2 BELUGA/CHUITNA FIELDS
3.0 AVAILABILITY AND QUALITY
3.1 NENANA FIELD
6
The surface mineable Chuitna Field (the reference field for the Beluga
region)is located about 12 miles from tidewater on the west side of Cook
Inlet.The mine area would also be about 12 miles (air)from the existing
Chugach Electric Association,Beluga Generation Station and the point of
connection to the existing transmission corridor to the Cook Inlet load center.
A recent report by the Bechtel Corporation indicates reserves of
350 million tons can be mined With a cumulative stripping ratio of 4 ..4 over a
30 year period.(a)
(a.)Bechtel Corpora,tion,"Prelimina.ry Fea.Sibility Study Coa.l Export Program,
Bass-Hunt-Wilson Coal Leases,Chuitna River Field,Alaska",April,1980.
'.
Th-;s field,located on the north slope of the Alaska Rcmge,is currently
in production at a rate of about 700,OQO TPY by the Usibelli Coal Mine Inc.•*
Existing mining capacity is about 2 million tons per year and the present
bases could support expansion to 4 million TPY.At this higher rate,mine
life is expected to be about 60 years without significant depletion.
The quality of the coal is as follows:
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7-8%
20-28%
20-25
2350 0 F
0.95%
0.16-0.18%
N.A.
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Heating Value
Ash Content
Hoisture
Hardgrove Grindability Index
Ash Softening Temperature
Ash Ha20 Content
Sulfur Content
Nitrogen Content
Thus a mining rate of 11,,7 ~TPY could be supported without significant
depletion of the reserves that have received the greatest attention.
In order for Chuitna coal to be available for in-state use at a
reasonable price,establishment of an export market will be necessary.The
outlook for this development appears excellent however based primarily on the
rapidly growing East Asian markets.
In addition,time is required for mine design and environmental and
licensing activities.Based on these considerations,Chuitna coal could be
available as early as 1986 but with more certainty by 1988.A decision on
proceeding with development is expected in 1981.
The run-Of-mine quality of coal expected from the Chuitra Field ;s as
follows:
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4.1 BACKGROUND
The general approach to be used in forecasting steam coal prices in
Alaska is similar to that employed for other fuels such as natural gas and
petroleum based fuels.That is,future prices are based on recent actual or
estimated prices (January 1980 basis)and then modified for the future based
on the concept of an lIopportunity price ll or "shadow price."This price is
that which the seller would receive in the open market.Modifications to this
approach are necessary when 1)long term contracts exist t 2)non-market
factors exist,or 3)competition from other sources of coal does not exist.
This approach therefore necessitates some understanding of the steam coal
market and price formation factors at least for those coals which have access
to alternative non-Alaskan markets·.In this case,these markets are primarily
in East Asia.
...
4.0 COAL PRiCE FORECASTING
A recent study by Battelle-Northwest addressed the steam coal market
outlook on the Pacific Rim (East Asian and U.S.West Coast)in relationship to
the potential development of the Beluga Coal Fields.(a)In that report,
several points were made that are relevant to this study:
1.Steam coal markets differ sUbstantially from petroleum markets
...long tet"'m contracts are cOl1111on in order to accommodate the
financing needs of the producers on one hand,and assure
relatively firm supplies and prices of known quality coal to
the purchasers on the other.Quite frequently,purchasers seek
an equity position in the producing operation to assure
stability.
2.Market prices are determined primarily by the costs of
production plus profit.This is in contrast to the case of
crude oil markets where prices are established by national oil
comp:lOies or the host governments in producing countries.The
(a)SWift,W.H.,J.P.Haskins~M.J.Scott~1980.Beluga Coal MarketStudx
(Final Report).Prepared for the Division of Policy Development and
Planni,ng,·Office of the Govel"nor ll State of Alaska.
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coal markets are thus generally competitive.High world oil
prices provide the major stimulus for switching to coal,but
due to the competitive nature of the market,do not acutally
establish coal prices.
3.,Tn turn,the costs of production are determined primarily by
the nature of the mining operation,e.g.surface vs.
underground,and the geologic conditions such as thickness of
seams,depth of overburden,and general terrain conditions.
4.For r~asons of transportation costs,Alaska's coal market
appears to be decQupled from the western U.S.market and will
more likely be closely linked by international trade to East
Asia,and specifically to Korea,Japan and Taiwan.In these
markets,Alaskan coal will compete primarily with coals from
Australia,South Africa,Canada,The Peoples Republic of China,
and Westetn Canada..Due to high domestic rail transportation
costs,western u.s.coals are not believed to be major long
term competitors,
5.Steam coal trade on the Pacific Rim is currently in its infancy
with no well established patterns as yet.Despite this,growth
is expected to be dramatic as illustrated in Table 4.1.This
has been brought about primarily by the high cost of the
imported oil and liquified natural gas both of which coal can
displace given adequate time for installation of new coal-fired
plants.
6.Despite price disparities between different suppliers,coal
purchasers and governments,e ..g.Japanese electric power
utilitie.sand the Ministry of International Trade and Industry,
appear to have taken the position that diversity in sources of
supply is worth some cost pena:ty.In fact,it now appears
that despite significant differences ;n coal costs,market
shares for supplying countries will be determined more by
policy decisions and less by pure economic considerations.
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Year
1979 1985 1990 2000
2.8 26.4 50.4 103.2-123.76.2 9.6 16.8 52.85.5 3.7 16.8 43.3N/A 4.8 9.6 l~.O
14.5 44.5 93.6 211.3-231.8
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Japan
KOrea
Tai.wan
Hong Kong
Total
10
Source:u.s.Department of Energy;UInterim Report of the
Interagency Coal Export Task Force,tI January 1981,
p.42.Data adjusted to 11,500 BTU/lb coal by
Battelle.
TABLE 4.1.Preliminary Projections of Steam
Coal Imports by Country -MMTPY
7.If the major East Asian Coal importing country,i.e.,Japan,
adheres to its announced policy of source diversification
inclUding the u.s.as asupplier~Alaskan coal,particularly
from the Cook :'let rer-ion,could capture a major percentage of
the U.S.exports to the Pacific Rim.
In addition to the question of whether or not Alaskan coals will enter
international trade (we believe it can),the problem in forecasting future
prices lies in the fact that there is little market precedent in the Pacific
Rim.Steam coal trade to date has been miniscule relative to its expected
I
future levels;prospective purchasersi·n East Asia have had little experience
with coal-fired plants;standards for contractual arrangements inclUding
equity participation in producing operations and infrastructure have not been
worked out and tested.
Rega1-'d 1ess of the above prob 1ems,it seems reasonab le to expect that the
Pacific Rim market will function in the future in a manner similar to the U.S.
domestic market with the exception that targets for diversified supplies will
be set as a matter of policy rather chan simply economics.With that
exception,it appears that competitive market forces will prevail at least
once an initial base contract price is established.
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(a)Linkage to absolute cost levels (the free market approach)appears
unlikely due to the policy decision to preestablish target market shares.
11
4 ..2 FORECASTING RATIONALE
Due to the joint necessity for long term contracts (10 years)on the part
of both the sellers and buyers,it seems likely that a contract for Alaskan
coal will start with a negotiated base price established largely on the cost
of production and de.livery plus a reasonable rate of return.Clauses will be
included to cover production cost increases or decreases due to changing
mining conditions (e.g.,depletion),regulatory and tax changes,and labor and
other cost factors.
In addition,it seems reasonabl£;;.that the producers (inclUding the equity
participation by the purchaser)will require some market place clearing
mechanisms.That is~they will require contract provisions that link the
prices they receive for their coal to at least the changes in the landed cost
of coals supplied from other sources.(a)Such terms are comparable to those
currently applied to agreements for purchases of other energy commodities such
as LNG and LPG.
Beluga/ChuitnaCoal
Given the above background and assumptions,the overall rationale for
forecasting future prices of Alaskan steam coals (particularly those strongly
tied to other markets)is shown diagralTl11atically in Figure 4.1.
The process starts wi t·~est imates of coal supp ly functions (pri ces as a
function of production rate)for steam coals for each of the sources of supply
competing with Alaskan coal.These estimates are shown in Figures 4.2,4.3,
and 4.4 for supplies F.O.B.dock Australia,South Africa and Canada
respectively.All prices are expressed in current 1980 US dollars and are
based on composite supply functions for each country as shown disaggregated in
the previou.s ly referenced Battell e report "Be 1uga Coal Market Study.II A
separate figure dealing with Wyoming coal (the US steam coal from the
contigous states we believe most likely to participate in large tonnage
contract exports)is not Shown as the nature of the reserves point t~an
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ESTIMATED LANDED---------)11........COST OF COAL IN PACIFIC
RIM BY COUNTRY OF ORIGIN(3,4)
Price as function of production rate
Production rate as function of time
Price as function of time
Japan used as pro~y
FIGURE 4.1.Procedure,for Estimati og Steam Coal
Price EScalation -Pacific Rim Markets
12
-
ESTIMATE COAL SUPPLY
FUNCTIONS BY EXPORTING
COUNTRY (1)
ESTIWfTE TOTAL ESTIMATED FOB ('QST OF
PRODUCTION BY --------~.........COAL BY COUNTF,y(3)COUNTRY OF ORIGIN(2)
ESTIMATED COST OF
TRANSPORTATION BY
COUNTRY OF ORIGIN
ESTIMATED PACI FIC RIM ESTIMATED WEIGHTED
MARKET SHARE BY --..------....;..........AOVFERCAOAGLE L1A
N
•...NpD.AE.cDICFOrCS.TRI'lJ1(3)COUNTRY OF ORIGIN .'.........'.~.
t
ESTHt1.ATED COST OF ESTIMATEDESC~LATION
TPANSPORTATION,ALASKA --.......------)Jr......RATE
TO MARKET
....•'."..'
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';(1)11 (2)•
11 (3),
(4)
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FIGURE 4.2.Composite Export Steam c.~al Supply Function
FOB Australia -Current 1980 Dollars
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1.00
0.80
0.6.0
0 ..40
0.20
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FIGURE 4.3.Composite Export Steam Coal Supply Function
FOB South Africa -Current 1980 Dollars
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1.40
1 ..20
1.00
0.60
0.80
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FIGURE 4.4.Composite Export Steam Coal Supply Function FOB Canada (British Columbia)
.-Current 1980 Dollars (Less Fraction to Met-Coal Market)
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---E South Africa
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1.60
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---~3::E---"-----I Canada
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FIGURE 4.5.Estimated Coal Prices FOB Port of Origin
Current 1980 Dollars
o z?adR I-,1 _
1980 1900 2000
16
1.40
1.20
1.00
0·.80
0.60
0.40
0.20
2000
75-120
80 ..180
4-24
1990
35-40
60-70
4...10
1985--
15-20
40 ..50
4
Australia
South Africa
Canada
Source:US Department of Energy "Interim Report of
the Interagency Coal Export Task Force,
January 1981,pp 51,53,58~
TABLE 4.2..Estimated Total Export Steam Coal Production For
Non-US Countries Serving the Pacific Rim Markets
MMTPY
17
.sources.
essentially flat supply function ..However in general,essentially all supply
curves show upward trends as production rates increase.This comes about as
each new increment of production capacity encounters more costly mining
conditions,i ..e ..,the marginal cost of production rises in real terms.
Next,estimates of total steam coal (of a grade likely to be exported)
production rates over time are applied to the supply functions to estimate the
future cost of coal F ..O.B,.the producing country..The production rate
estimates used are shown in Table 4..2 based on recent US Department of Energy
forecasts that draw on a large number of estimates from domestic and foreign
The net result of this stage of analysis is depicted in Figure 4..5.A
range of future prices is shown illustrating the uncertainty introduced by
Possible bands of production rates.Australian,coal prices though starting
(1985)at the lowest level,increase more rapidly than others as a result of a
combination of marked increases in expected production rates coupled with
moderate upward increases in costs of producti0n.
Market shares (for producing countr7es)are then entered to result in the
we';ghed average 1anded cost of steam coal del ivered to Japan,the 1atter as a
proxy for the Pacific-Rim market as a whole.Estimated market shares are
shown in Table 4.3 based on US Department of Energy studies.
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)
J
10
10
16
..
An-
Others
10
10
12
20
20
20
25
25
25
Canada
15
15
12
25
25
25
20
20
10
50
50
50
·..-a-
30
30
25
50
50
50
60
60
60
25
25
25
AustraliaUSA
(Percent)--------~So-u""-i-th
Africa China
15
15
25
20
20
20
25
25
25
Jap-'an
f9S5
1990
2000
TABLE 4.3.Market Share of Steam Coal Trade in the Pacific Rim-
South Korea
1985
1990
2000
Taiwan
1985
1990
2000
Hong Kong
1985
1990
2000
Source:US Department of Energy,lIInterim Report of the Interagency Coal
Export Task Force,n January 1981,pg 101.
...
18
Npi'i'··1'."(-
Finally,the expected future costs of transportation to the Japan proxy
market from Alaska are backed out from the weighted ave~age ianded cost from
other major competitors to provide a "ne t-back ll price to Cook Inlet,Alaska.
Not all potential suppliers are shown primarily due to the absence of cost or
price data for ma1nland China or Russia.Nevertheless,the results should be
indicative and are given in Table 4.4.
It is concluded that Beluga/Chuitna coals can be expected to escalate in
price in real terms at about 1.5%per year ..
Discussions with the Bass-Hunt-Wilson group indicate that the run-af-mine..
price of coal at mine mouth is expected to be about $1.07/MMBTU (1980 dollars,
•11
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I
I
~
1
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Ir
f
I~,
~
.'.f.....J.
0.54
1.35
.0
1..4%
0 ..47
1.17
1 ..6%
1985 1990 2000
1.09 1.23 1.54
30 30 .25
1.58 1.62 1.71
10 10 12
'::)1.38 1.49 1.65
20 20 10
2..52 2.66 2.78
15 15 15
1.52 1.64 1.89
0..44
1.08
-
Battell e:liBel uga Coal Market Studyll
December 1980 •
US Department of Energy "Interim Report
of the Interagency Coal Export Task
Force January 1981.
3)US market share of Japan coal markets
adjusted to reflect only non-Alaskan
coal,Wyoming source 4ssumed.
South Africa
Market Share %
Australia
Market Share %
Canada
Market S:iare %
Country of Origin
u.s.(other than Alaska)
Market Share %
19
Cy =1 ..10 (1.015)(Y -1980)
Weighted Average Landed
Less Transportation Cost
From Alaska
Net-Back
Escalation Rate %/Year
Sources:1)
2)
TABLE:4.4.Steam Coal Prices Landed in Japan and Net-Back
to Alaska -Current 1980 $'s/MMBtu
round to $1.10)based on information available and an expected price FOB
trimmed ship for export of $1.48/MMBTu.(a)Thus the future cost of Chuitna
coal expected to track the equation ..
(a)Personal Communcation R.L.Purvin to W.H.Swift March 3~1981.
..
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$/ton (1980 basis
4.25
6.50
7.70
B.SID
10.00
t t '
MATANUSHA
Nenana
Willow K
Matanuska
Anchorage
Seward
The eXisting 25 MW Golden Valley Electric ASSOciation Healy plant is
recognized •.However for purposes of :onServative cost estimation,it is
assumed that further larger scale generation sites will be located as to
avoid conflict with the Prevention of Significant Deterioration clauses of
the Clean Air Aetas a result of proximity to Oenali National Park.
Persona 1 Commu neat ion.Joseph Us i be 11 i to W.H•Swift.May 6 1981.
Letter.A.T.Polanehek.Alaska Railroad to W.H.SWift.May 8.198'1 and
personal communication from Fred Hoesler toW.H.Swift May 28,19B1.
20
Nenana Field Coal
Unlike Beluga/Chuitna field coal,it is expected that further consumption
for power generation will Occur not at mine-molAth but rather at siting areas
along the Alaska Railroad right-of-way ..(a)Thus delivered costs of coal
will include rail transportation costs,
Based on discussions with M.Joseph Usibelli of the Usibelli Coal Mine
Inc.,the base price of coal (1st Qt 1980 dollars)should be $1.2Q/MMBTU FOB
rail cars at Healy.As equipment utilization increases as a result of higher
production rates,this price might decrease about B%at a 2MMTPY production
rate.However for conservative cost estimation PUI--poses a flat frequency of
$1.20 will be used.Although Nenana Field coal costs have increased in past
years due to increased mining and reclamation costs,the Usibelli has
indicated that now that the more highly mechanized (dragline)Operation is in
place,further prices should not escalate in real terms.(b)This
expectation is confirmed by the terms and conditions of the contracts for
supply to the Golden Valley Electric Association and the Fairbanks Municipal
Utility System.These contracts (which expire in 1988 and 1986 respectively)
provide for cost increases indexed to a wholesale (Produce)Price Index
(Industrial Conmodities).
The Alaska Railroad has advised that tentative rates for scheduled
unit-train movements of coal from Healy to various sites along the railroad
will be as follows based on railroad arrival cars.(c'
(a)
f
$/MMBTU
1.39 +.08 {L.03)y -1980
1.47 +0.12 (1.03)y -1980
1.54 +0.14 (1.03)Y -1980
1e59 +0.17 (1.03)Y -1980
21
........
qi .......•~
"''"'l:'
Nenana
Willow
Matanuska
AnChorage
Location
Converting to $/MMBTU the above analysis results in the following
estimated delivered costs of coal supplied in year y.
Future costs would be subject to escalation using The Association of
American Railroad's Cost Index.r:or purposes of this analys.is it is assumed
that any real transportation cost increase will be associated with fuel costs
(expected to increase 3%per year)which amount to about 30%of rail haul
costs.
•
i...
I
i./
l 0
rI~
!
III
I
I
A.Polencheck
R..L.Hoffman
C..Debe1;us
Ron Lehr
Charles Conway
Eric Yould
L10yde Pernela
Robert Cross
Steve Bredthauer
Individual
Frances Ulmer
Donna Lehr
Tom Stahr
L.J ..Schultz
Bob Huffman
Jim Movius
Tony Begovich
D'j ck Bass
Joe Usibel1i
Jack Kreinheader
Milt Barker
Mark Wittow
Davi d Rogers
,.~*'''''•""'.........••
APPENDIX A
-
Organization
DISTRIBUTION OF COMMENT DRAFT WORKING PAPER
22
Division of Policy Development &Planning
Alaska Power Authority
-
Division of Budget &Management
Division of Energy &Power Development
Alaska Power Administration
Corps of Engineers,Alaska District
Alaska Railroad
Dow-She 11 I;roup
Acres American
Anchorage Municipal Light &Power
Chugach Electric Association
Fairbanks Municipal Utility System
Golden Valley Electric Association
Federal Energy Regulatory Administration
(San Francisco)
Bass Hunt Wilson Group
Usibelli Coal Mine Inc ..
Legislative Staff
Department of Natural Resources
•
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;~
I
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1
I
I,
I
j:
Chuck Sitkin
Fred Boness
Dan Malick
Steve Simmons
Ron Schnoor
Dennis Rohan
-
23
r1
f'iiijiw .'''':.~;~i
&.......
Ii
Arthur Young Associates
Management and Planning Services Alaska
Preston Tho~grimson
Ebasco Services Incorporated
SRI International
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