The Chuitna Coal Project is a proposed coal strip mine that, if granted state and federal permits, would be built about southwest of Anchorage, Alaska, in an area known as the Beluga Coal Fields near the Chuitna River and the small communities of Tyonek and Beluga in upper Cook Inlet.
Proposal
The Chuitna Coal Project is a proposal of PacRim LP, a Delaware-based corporation owned by the Texas-based energy company Petro-Hunt LLC. PacRim holds a state lease to of Alaska Mental Health Trust property where an estimated 1 billion metric tons of low-sulfur, sub-bituminous coal is thought to exist. Proven reserves are reported to be 771 million tons. The company is in the advanced stages of state and federal mine-permitting processes. PacRim has surveyed three Logical Mining Units, or LMUs, within its lease. If permitted, the company has said it plans to extract up to 12 million metric tons of coal from the first of these units over a minimum period of 25 years. Other LMUs, could be developed in future years.
The surface coalmine itself could eventually spread to cover , but the project also would include assorted support facilities, a mine road and a long, covered conveyor system to transport coal to Cook Inlet at Ladd Landing where a port facility would be built. Ladd Landing is property owned by the Kenai Peninsula Borough and subject to a lease-option held by PacRim. A letter of intent to exercise the Ladd Landing option was filed by PacRim in March, 2009. For more, see Lease-Option History section below.
Only about 10 percent of Alaska's electricity is generated by coal, all of which is produced by the Usibelli Coal Mine, near Healy, Alaska. That operation supplies six Interior Alaska power plants and ships its surplus overseas. Currently, Alaska's coal-fired generating capacity has no need for the coal that would be produced at Chuitna. Thus, coal extracted from the Chuitna project would most likely be shipped to Asian markets, including South Korea, Japan and Mainland China, with other possible markets being Mexico and Chile.
Interest in exploiting the resources in the Beluga Coal Fields has waxed and waned over the decades since the late 1960s, with the lease passing through a succession of corporate hands. The proposed Chuitna Coal Project has both proponents and opponents and is becoming increasingly controversial in the Cook Inlet region.
Geography
The proposed Chuitna Coal Project mine site is located within PacRim's lease area designated as follows: Sec 14, 15, 21-28 and 33-36, T13N, R12W, Seward Meridian.
Land ownership
Land within and around PacRim's lease area is owned by a variety of entities, including the State of Alaska, the Alaska Mental Health Trust Authority, the Kenai Peninsula Borough, the Tyonek Native Corp., Cook Inlet Region, Inc. (CIRI), and private owners. The state of Alaska owns about (including mental health lands), and coal leases have been issued on some , including the leased to PacRim. Two state wildlife refuges are near the project zone. They are the Susitna Flats Wildlife Refuge to the northeast, and the Trading Bay Wildlife Refuge to the southwest. According to the state, neither would be affected by the mining project. Tyonek Native Corp. owns more than to the southeast. CIRI owns a scattering of properties around the mine site. The Kenai Peninsula Borough owns south of the mine lease boundary and a small area of land around Beluga and Ladd Landing. Private land is mostly along the Cook Inlet coastline in Beluga, Tyonek, as well as at North Forelands and south of Granite Point, which are coastal locations south of Tyonek.
Lease-option history
The Kenai Peninsula Borough-PacRim Ladd Landing lease-option document shows that in 1987, the borough entered a lease-option agreement with Tidewater Services Corp, which merged with Midgard Energy Co., in 1994. That year, Midgard assigned its option to Richard Bass, William Herbert Hunt, and William Herbert Hunt Trust Estate. The option was extended multiple times through years while coal mining in the state lease area remained financially impractical. Early in 2008, Bass, Hunt and the Hunt Trust Estate assigned the Ladd Landing option to PacRim Coal LP. In March 2009, PacRim signed a letter of intent to exercise its Ladd Landing option. As of April 2009, the Kenai Peninsula Borough's Land Management Office had begun the process of bringing that lease to closing under the existing 1987 terms, a process that had to be completed within 180 days. According to borough officials, the two sides will renegotiate terms they have mutually agreed are outdated and in need of revision.