Alaska agency stops short of banning coal mine in water rights decision

The Alaska Division of Mining, Land & Water’s Water Resources Section has issued a decision on the Chuitna Citizens Coalition Inc.’s three Reservation of Water applications for Middle Creek/Stream 2003, a tributary of the Chuitna River.

These applications, aimed in part at a long-planned coal mining operation, were requested to protect flows for the purpose of protection of fish and wildlife habitat, migration, and propagation.

The decision was signed on Oct. 6 by Water Resources Section Chief David Schade and published on Oct. 7, said the Alaska Department of Natural Resources in an Oct. 7 statement. The decision grants a Reservation of Water to the Chuitna Citizens Coalition in the lower reach of Middle Creek/Stream 2003. The decision does not grant the applications for the main reach and the middle reach of Middle Creek/Stream 2003. This decision does not award any water rights or permits for mining-related activities.

In this case the Water Resources Section also received competing water right applications for use of water in Middle Creek/Stream 2003 to support PacRim Coal LLP’s proposed Chuitna coal mine. When it receives applications for competing uses from the same source of water and there is not enough water to supply all applicants, the Water Resources Section is required to balance the interests involved and give preference to “the use that alone or in combination with other foreseeable uses will constitute the most beneficial use.”

In the decision, Schade wrote that he found two arguments regarding the Reservation of Water applications to be compelling. First, the applicant made a compelling argument that the Department of Natural Resources should not allow PacRim to develop a coal mine that would significantly and negatively impact the Chuitna River watershed, and second, the Alaska Mental Health Trust Authority and others made the compelling argument that while the state and federal permitting processes must be stringent, they must also allow for a predictable and complete permitting process that allows all available information to be compiled and presented to the state and federal regulatory agencies.

“The Water Resources Section will analyze the entire Chuitna watershed and the consequences and protections of the different proposed uses. This review will occur after other mine-related permitting is complete and the best information is available for all the Chuitna water right applications,” Schade said.  

Division of Mining, Land and Water Director Brent Goodrum added: “This decision culminates a vast amount of hard work and public participation on these applications. The decision provides for the continued protection of fish and wildlife habitat within in the Chuitna River watershed. The decision also allows for a continued rigorous evaluation of the proposed coal project by state and federal regulators. This decision is unique in that it is the first time that the State of Alaska is awarding a water reservation on state waters to a private entity.”

By issuing this decision, the department has complied with and fulfilled an Alaska Superior Court order to issue a decision on the Chuitna Citizens Coalition’s Reservation of Water applications. The decision may be appealed to the commissioner of the Department Natural Resources within 20 days.

The decision noted: “PacRim is currently working to permit a coal mine in the area through which portions of the Main Reach and the Middle Reach applications extend. Current (draft) plans for development of the mine include redirecting a portion of Middle Creek/Stream 2003 water from the proposed mine site, out of the natural channel, and then back into Middle Creek/Stream 2003 at a point above the Lower Reach. PacRim and other industry representatives have asserted that a reservation of water granted in the mine site area will stop the project from moving forward, as the elimination of portions of Middle Creek/Stream 2003 will be required during the life of the mine. The applicant has asserted that granting the reservations of water at this time will not stop the project, because ADNR can review the reservation if and when the PacRim water right applications are adjudicated.

“PacRim and other industry representatives who objected to the reservation applications argue that granting the reservations could be perceived as pre-judging the project, and it would be difficult, if not impossible, to convince potential investors that ADNR will agree to review and possibly revoke the reservations in the future, upon adjudication of PacRim’s water rights applications. They allege that granting the reservations at this time will cause loss of funding, and will cause other agencies reviewing the project to close, or at least shelve, the permitting review process.”

The Alaska Department of Environmental Conservation (ADEC) said in May that it had made a preliminary decision to approve PacRim Coal LP’s application for an Air Quality Control Minor Permit for the Chuitna Coal Project. PacRim LP, through years of stops and starts, has slowly been working toward government approvals on this major strip mine project, designed to produce coal for the Pacific Rim export market. Usibelli Coal Mine Inc. has for many years been Alaska’s only coal producer, which would change when this project is developed.

PacRim plans to develop and operate a surface coal mine, coal handling system (preparation plant), and coal export facility in the Beluga Coal Field region of south central Alaska, approximately 45 miles west of Anchorage. The project consists of a surface coal mining operation, coal crushing/handling (preparation) facilities, and an eight-mile elevated overland conveyor to a coal export and storage facility on the west coast of Cook Inlet. The surface coal mine will utilize both truck/shovel and dragline mining methods for excavation. The life-of-mine (LOM) is projected to be approximately 25 years of active coal production, and time for initial infrastructure development and final mine closure and reclamation. Maximum annual coal production is projected to be 14 million tons, which is far more than Usibelli alone produces.

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.