The coal conundrum: The Navajo Nation weighs the cost of saving power-plant, mining jobs

Owners of the Navajo Generating Station announced in February that they intend to shutter the coal-fired energy plant in Page, Ariz., by December 2019, when their lease agreement with the Navajo Nation expires.

The decision is purely economic, they explained. Coal, the fuel used to power the three 750-megawatt units at the plant, is nearly twice as expensive as natural gas in today’s market.

The closure date is contingent on amending or changing the current lease agreement with the Navajo Nation to allow additional time after 2019 for the Salt River Project and the plant’s four other owners, including the Bureau of Reclamation, to complete clean-up efforts at the site. If a new lease arrangement with the Navajo government is not finalized by May, they will be forced to close the plant, located about a mile from Lake Powell, in July of this year.

SRP serves electric customers in Arizona and Nevada. The station also supplies more than 90 percent of the power needed to pump water through the Central Arizona Project. CAP is both the single largest end user of power as well as the largest single source of renewable water supplies in Arizona.

The Kayenta Mine, on Black Mesa, Ariz., in the Navajo Nation, is the only source of coal for the plant and feeds all of its coal production to the plant. At full capacity in 2016, NGS used 240 train cars of crushed coal ore per day shipped over 80 miles of track from Black Mesa. If NGS closes, Peabody Coal, the owner of the mine, will have to find another coal buyer or shut the mine.

Without an extension, about 500 employees of the plant, 90 percent of them Navajo, and 390 Navajo and Hopi coal miners could lose their jobs.

Hopi Chairman Herman Honanie recently told the U.S. Department of Interior that the Hopi tribe will lose significant revenue if Kayenta Mine and NGS close, adding that it would also increase the unemployment rate, currently approximately 60 percent, according to the Washington, D.C., Bureau of Native News. Honanie said approximately 80 percent of their budget is derived from royalties from the Kayenta Mine.

‘A critical point’


Officials from 18 Western Navajo Agency chapters gather March 25 in Cameron, Ariz., to consider a resolution to request a federal coal subsidy.It passed. From left are chapter Secretary-Treasurer Sara Slim, President Henry Stevens, and Vice President Jerry Williams. Courtesy photo.

Estimates of unemployment on the Navajo reservation vary between 40 and 50 percent. The loss of many of the best jobs in the nation would be a blow to more than three dozen Navajo chapter communities in the northwestern reservation and the nearby border towns of Page and Flagstaff.

At a recent meeting with Kayenta coal miners, Navajo Council Speaker LoRenzo Bates explained that there is enough coal to mine until 2047 if a company could be found to run the coal plant. “It’s important not only to Peabody and the nation but also to everybody up here – the extended families. It’s more than a paycheck, it’s a way of life,” he said, according to the Navajo Times.

Kayenta general manager Audry Rappleyea told the miners that Peabody paid the nation $26 million in 2015 royalties for the 6 million tons of coal bought by NGS, their only client. That number represents a steady decline, Rappleyea said. In 2014 the mine sold NGS 8.2 million tons. Last year it was 5.7 nmillion.

But in March, Navajo President Russell Begaye told a gathering of indigenous financial leaders at the 2017 National Reservation Economic Summit, “The nation is at a critical point where it must diversify its revenue sources away from the coal and oil industry,” pointing out that the Navajo Nation’s revenue from coal and oil has fallen from 77 percent of the total to 66 percent. Leaders foresee this dropping 20 percent more if the NGS shuts down in 2019.

Later that month, Begaye reassured NGS employees at a meeting in Lechee Chapter that the Navajo government is working on keeping the plant open through 2030. The Navajo Nation has met with the Department of Interior and the owners and operators of the NGS and continues to lobby the Trump administration, Begaye said, to support the use of coal in the United States.

Rolling back

On March 28, President Trump signed an executive order to roll back Obama administration protections for clean air, clean water and the global climate.

Trump’s executive order rescinds a moratorium on federal coal-leasing implemented under Obama and directs Interior Secretary Ryan Zinke to “amend or withdraw” the order that initiated a comprehensive review of the federal coal program. The next day, Zinke formally did so and ended review of the program.

Coal is rapidly losing out to cheaper energy sources like natural gas and renewables, leading to a historic downturn in mining.

Robert Murray, head of the largest private U.S. coal firm, Murray Coal, told The Guardian recently that Trump should “temper his expectations” on reviving coal industry jobs, adding, “He can’t bring them back.”

Other options

Regardless of the effort the Navajo government is making to find a company to save the NGS plant, other solutions are being proposed by Navajo organizers like Nicole Horseherder.

The Navajo Nation should be thinking about renewable-energy production and transmission, not coal or natural gas, Horseherder told the Free Press. She is a Black Mesa resident and organizer from the Big Mountain community. The proposal she developed with Tó Nizhoni Ani, a water-justice organization on Black Mesa, is based on lengthy discussions with allies.

Her group joined a coalition of Navajo and Hopi organizations to express concern about the stakeholder input around the future uses of the plant. In a letter to Acting Interior Secretary James Cason, the indigenous community leaders urged the Bureau of Reclamation not to repeat the mistakes of the past in shutting out Navajo and Hopi voices from the stakeholder process addressing the future of NGS and the Kayenta mine.

“Our future depends on a transition that addresses cleanup, securing rights to Navajo water, job and economic development assistance, and mapping out a future built on clean energy,” the letter said.

The only way that will happen is if Navajo officials are given a seat at the table where decisions are being made, said Percy Deal, who signed the letter on behalf of Diné CARE and whose family has lived in the shadow of the coal mine for generations.

Horseherder said the Tó Nizhoni Ani proposal requests that the Navajo Nation advocate for a renewable-energy retrofit at the plant. She admits power generation wouldn’t be as large as the 2,250 megawatts coal produces today, but said retrofitting for renewable energy is a step in the right direction.

“We cannot adapt the plant for coal, or even natural gas. Extraction technologies, like fracking for gas and oil, will only increase the risk to the environment in the future,” she said. “A much greater decision is at issue; we need a long-lasting solution. It’s not enough to just keep [NGS] open for jobs. We don’t have to go back to something that wrecks water or the air.”

A coal-cost subsidy?

Jerry Williams, president of Lechee Chapter, the nearest Navajo community to the plant, has worked 36 years for NGS. When news of the possible closure came, he and another employee, Erwin Marks, developed a plan to save the coal mine and create a cost-effective solution that could keep coal energy fueling the plant for years to come.

They are suggesting a federal subsidy to offset the price of coal. Although the subsidy would change as the difference in cost between coal and natural gas fluctuates, the money would save the plant, the mine and the jobs at both.

The Williams-Marks plan was submitted as a resolution to the Western Navajo Agency Council at the quarterly meeting in Cameron Chapter on March 25. Officials representing 18 chapters in the affected region passed the resolution. Williams and Marks assert that the Northern Agency Council of 20 chapters also passed it.

President Begaye is supportive of the subsidy idea as well as other emerging plans to keep the facilities open. “We support the Western Agency Council’s resolution and we will continue to work diligently to make sure the power plants and mines continue operation until 2029,” Begaye told the Arizona Republic. “This will afford the nation the time needed to transition into solar and other renewable-energy operations.”

But the Black Mesa Water Coalition, an environmental-justice group working to break dependency on the fossilfuel industry, responded to the Western Agency vote of support for the subsidy in a statement sent to their 10,000 followers. “Bailing out NGS is not a solution,” they said. “It will not create new jobs and will not reduce our current unemployment rate. It will only keep us stuck in the same place and leave us with even more polluted lands and health impacts. If we ask the feds for money, shouldn’t it be to help us transition away from the dying coal economy? A just transition can help to retrain workers, establish new sectors of the economy, and solidify water rights.”

Horseherder agrees. “The money that the nation is asking to subsidize the cost of coal can be used instead to retrofit the plant and retrain employees in renewable energy. I know it’s hard on people, yet so many of us have had to change careers many times and we know it can be done, so we could do this again.” She feels confident that money is available to invest in a sustainable transition to renewable energy. “SRP, Central Arizona Project and independent commercial solar developers, plenty of companies, are willing to talk with us and work something out instead of subsidizing a coal plant at the end of its life.” “My heart goes out to the people who may lose their jobs,” said Arizona State Rep. Eric Descheenie in a telephone interview with the Free Press, “but as a leader for our people I have to ask where are we going to be in 10 years?” He said NGS, the Kayenta mine, loss of jobs and revenue to the communities and the nation is a very complex issue. He is cautious about the role the Navajo government should play in rescuing the coal plant.

In 2012, Arizona Public Service created an opportunity for the Navajo Nation to acquire the BHP Billiton Coal Mine near Shiprock, N.M. So naturally, Descheenie explained, the Navajo Nation saved it in the end by buying the coal mine to continue providing cheap energy to Arizona Public Service. “The quality of the coal and the fact that natural gas is a price competitor now, due to evolving technologies like fracking, makes you wonder in the long run if was such a wise decision,” he said.

He represents approximately 85,000 residents, mostly Navajo. Prior to his election he served as co-chair of the Bears Ears Inter-tribal Coalition as the group negotiated the Bears Ears monument proposal in Washington D.C.

“Are we utilizing our higher consciousness as we make these decisions?” Descheenie asked. “Are we being responsible about our ability to care for this land so we can stay in this place? For me it simply comes down to making decisions that assure indigenous people – not just my own tribe – can stay where we belong. Navajo people assert through our creation story that Dinétah is our place on the planet. Yet, even our homeland is affected by climate change.”

Descheenie points to the Alaskan tribes that are being displaced due to climate change. In that instance, the melting polar ice cap is causing rising waters on coastline homelands to crumble foundations and infrastructure and flood tribal cemeteries. Displacement is on their doorstep, he said.

Any decision involving industries and energy generation in the Colorado Plateau, and Dinétah needs to consider climate change and the land “before it’s a crisis and the house is on fire, when the water cannot sustain us and the next generations,” he said.

The coal-subsidy proposal is gaining strength in chapter resolutions on the reservation while President Begaye and Speaker Bates are simultaneously working toward settling a lease extension agreement with SRP by May 1.

Descheenie said he is not opposed to the mining industry and agrees that the economic benefit to 800 employees is a good thing, “but what will the effect be on the other 300,000 of us? We are all affected by the decisions. This is what I feel we are not asking at this point.

“When we look at the price of natural gas, a subsidy from the federal government may be a good short-term solution, but in the end the Navajo Nation could be left holding a hot potato.”

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