Navajo Nation: Navajo coal mine, Four Corners plant in danger from court ruling

A federal judge, if he halts mining at the Navajo coal mine, will cause devastating economic impacts for the Navajo Nation and its members, said Navajo Transitional Energy Co. LLC (NTEC), an enterprise of the Navajo Nation.

Judge John Kane, sitting in the U.S. District Court for the District of Colorado, on March 2 ruled that the U.S. Office of Surface Mining did an inadequate environmental review during permitting of a new work area for the Navajo mine, which supplies the nearby Four Corners power plant. The issue now is the remedy to be applied from that ruling.

The NTEC said in a March 23 brief that no relief that would interrupt mining operations should be issued. “Rather, issuance of a declaratory judgment is the most appropriate remedy,” it wrote. The decision whether to issue an injunction that would stop mining work is highly fact-driven, said the company.

“Cessation of operations at the Navajo Mine (‘Mine’) and Four Corners Power Plant (‘FCPP’) would be catastrophic for the [Navajo] Nation’s economy and its ability to provide needed services to the Navajo people, including critical health and safety related services,” said the company. “The Navajo Mine and FCPP provide one-third of the Nation’s entire General Fund. Id. Even with the elimination of FCPP Units 1, 2, and 3 in December 2013 to comply with EPA requirements, the Mine and FCPP provide 2,293 jobs for the Nation, $159 million in annual labor income, and $338 million in gross Navajo Nation product (‘GNNP’). These are some of the best paying jobs on the Reservation, where the unemployment rate is a staggering 50%. For the period 2016-2041, the Mine and FCPP will generate $8.8 billion in GNNP, $4.1 billion labor income, and 59,612 job years.

“The Arizona Corporation Commission (‘ACC’) has recognized the important impacts of FCPP on the Nation and surrounding communities, including the many jobs provided there. Therefore, the Nation made substantial investments to ensure that the Mine and FCPP remain in operation, including $85 million to purchase the mine, millions for due diligence, and significant government resources as a cooperating agency under NEPA and in the formal Section 7 consultation under the Endangered Species Act. Others have also made significant capital expenditures in reliance on the continued operation of the Mine and the FCPP.

“After a lengthy review by the ACC, the owners of the FCPP paid $182 million to purchase Southern California Edison Company’s 48% interest in FCPP Units 4 and 5, mothballed Units 1, 2 and 3 of the FCPP, and agreed to spend $635 million (based on APS’ 63% share) for advanced controls on Units 4 and 5, with great environmental benefits. The Nation made its $85 million expenditure in reliance on viability of the Mine and the validity of OSM’s actions, including the Area IV North approval. NTEC committed $42 million for the Mine and Area IV North. The public at large depends on the Navajo Mine and FCPP. The FCPP provides essential baseload power to more than 500,000 customers in New Mexico, Arizona, and Texas, including major hospitals, schools, residences, and police, fire and other emergency service providers. The FCPP is ‘important to the western power grid.’ If FCPP were forced to shut down because of a lack of coal supply, this would eliminate 31% of Arizona Public Service Company’s available baseload electricity.

“In stark contrast, the harm to Petitioners if an injunction did not issue would be speculative or illusory. Petitioners’ core claim of harm is a procedural claim, that the effects of the permit revision should have been examined more closely in an EIS. That harm has been cured by the Respondents’ preparing the very EIS sought by Petitioners, to be issued in about three months. The other harm identified by this Court is the possible harm to the Colorado Pikeminnow. A Draft Biological Opinion prepared for another project opined that a .1% increase in mercury deposition in the basin is likely to jeopardize the continued existence of that fish. But there will be at least as much mercury deposition in the basin even if mining had to stop at Area IV North temporarily, because mining would be moved to Area III, albeit at great cost to NTEC, and that coal will be burned at FCPP in conjunction with 1.3 million tons of stockpiled coal.”

OSM says there is no need to halt mining while new enviro review is worked on

OSM said in its own March 23 brief: “As contemplated in the opinion and order, the Court should remand the March 2012 decision to OSM. During the remand period, OSM would consider the potential effects of mercury emissions from the Four Corners Power Plant and reevaluate its finding that approving the application would not have a significant impact on the environment (and thus also its decision not to prepare an environmental impact statement). The agency ultimately also would reevaluate its March 2012 decision to approve the permit revision application.”

OSM added: “[T]he Intervenor-Respondent, the Navajo Transitional Energy Company, is in a better position than OSM to assess how vacatur of OSM’s March 2012 decision will impact the company’s continued operation of the Navajo Mine and the rate of coal combustion at the Four Corners Power Plant. If the March 2012 decision is vacated, the company could not continue to mine approximately 6 million tons of coal per year from the Navajo Mine without applying for, and securing, certain federal approvals, including OSM’s approval of a revision to the permit that authorizes surface coal mining operations at the Navajo Mine.”

The group that brought this case, the Dine Citizens Against Ruining our Environment, said in its March 23 arguments filed at the court: “In prior filings, the Navajo Nation asserted that stopping mining in the portion of Area IV North approved by the 2012 Revision might result in significant economic losses. However, vacating the 2012 Revision will cause no such dire economic impacts.”

  • “First, vacating the 2012 Revision will not cause the Navajo Nation to forego any of the economic benefits of mining in Area IV North because vacatur will only temporarily delay mining operations (the coal will not spoil).”
  • “Second, delay in mining in Area IV North would not stop mining in other areas of the mine. Considerable permitted coal reserves remain in Area III. OSM’s 2012 EA determined that mining would continue through 2016, albeit at lower rates, even it did not approve any mining in Area IV North. The impact of temporary cessation of mining in Area IV North will be even less than the EA predicted because Units 1-3 of FCPP were retired in December 2013, significantly reducing coal demand. Plus, when OSM completes the FEIS for the Pinabete expansion, NTEC will be able to start strip-mining those reserves. Thus, temporary slow-down in operations due to vacatur, if any, and consequent impacts will be short-lived, a matter of months.
  • “Third, the suggestion that unlawful conduct may continue simply because it generates significant revenue undermines the rule of law and equal protection.”

The group added: “In stark contrast to the short delay in mining from vacatur, strip-mining and burning the coal would cause irreparable harm to public health and the environment.”

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.