Alaska decides it will offer the Canyon Creek coal tract for lease

Alaska’s Department of Natural Resources issued a July 5 finding that it will proceed with a competitive lease sale on the Canyon Creek coal reserve located near Skwentna, Alaska.

The DNR’s Division of Mining, Land and Water (DMLW) has written a final decision to offer for competitive coal lease about 13,160 acres of land in the Canyon Creek area, south of the Skwentna River. The proposed sale area is approximately 18 miles southwest of Skwentna, and around 6 miles southwest of Shell Lake. Public notice of the lease sale will be published at a later date.

In general, the coals in this area range in heat content from 5,400 to 9,450 Btu/lb and have ash contents of from 6% to 40%. They are generally very low in sulfur (0.1–0.2%) with moisture contents consistent with subbituminous rank coal (2%-30%). Based on the coal drilling and outcrop examinations, where present within the Canyon Creek coal lease area, the coal is at relatively shallow and surface minable depths.

If coal were to be mined from the lease area, it would have to be transported from the mine site to a shipping facility at tidewater, to the Parks Highway, or to the Alaska Railroad adjacent to the Parks Highway. No mine project or transportation routes have been proposed at this time.

There are several possible routes and modes of coal transport. The nearest tidewater shipping location is the Tyonek/Ladd Landing area, about 50 miles south-southeast of the coal leasing area. Ladd Landing is a few miles north of Tyonek on Cook Inlet, and is the proposed shipping point for the longstanding Chuitna Coal Project. The community of Beluga also lies eight miles northeast of Tyonek, and is connected to Tyonek and Ladd Landing by road. A transportation route south to the Tyonek/Ladd Landing area would need to avoid the large wetlands area around the headwaters of the Talachulitna River and between Beluga Lake and Little Susitna Mountain. The route could pass to the west of the wetlands by Judd, Coal Creek, and Beluga Lakes, or it could go down the west side of Beluga and Little Susitna Mountains. Any transportation route south toward Tyonek would have to cross the Talachulitna State Recreation River.

An alternative route would be to transport the coal to Port MacKenzie, or possibly to a point along the proposed Port MacKenzie Rail Extension. A route into the Port MacKenzie area would be roughly 60-70 miles long, and would require crossing the Talachulitna and Susitna rivers.

DNR received a request from Alaska Energy Corp. for coal leases or prospecting permits in the proposed sale area. State corporate records show that an “alien affiliate” of the company is CanAm Coal Corp. out of Canada, with CanAm CEO Timothy Bergen listed as the president of Alaska Energy. CanAm has several producing mines it partially owns in Alabama and has been trying for years to develop the Limon lignite coal reserve in Colorado. Another officer of Alaska Energy is CanAm CFO Jos De Smedt.

Usibelli Coal Mine Inc. has for many years been the only coal producer in Alaska, serving small utility and industrial markets in the state and exporting some coal to other countries. But several companies have over the years pursued mine projects in the state, with a big lure being the state’s relatively shorter shipping distance to some Pacific Rim markets compared to cargoes coming off of the West Coast of the mainland U.S.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.