As the Navajo Nation draws ever closer to the purchase of its first coal mine, a grassroots group is publicly blasting the terms of the deal.
Steve Gundersen is chairman of the management committee for the Navajo Transitional Energy Company (NTEC), the limited liability enterprise that was set up in late April to handle the purchase of the Navajo Mine near Farmington, New Mexico. He says even as Navajo Nation officials work around the clock in an attempt to finalize a deal by the year’s end, several items remain to be settled before the tribe can take the reins from the mine’s present owner, BHP Billiton.
First, NTEC still must commit to a coal supply agreement with APS, the utility that operates the 2,040 megawatt Four Corners Power Plant that is the only purchaser of coal from the mine. The power plant itself faces a bumpy road ahead both in terms of environmental regulation and ownership. One of the partners, Southern California Edison, has backed out and APS is expected to take over its share, but that transfer isn’t quite finalized. Finally, both the plant and the mine are under ongoing federal environmental reviews. The review at the plant will spell out the terms under which the plant may continue to operate beyond the end of its current permit in 2016.
Those unresolved issues are some of the reasons a Navajo grassroots group called Diné Citizens Against Ruining our Environment, or Diné CARE, is speaking out against the tribe’s purchase of the mine. Diné CARE board member Lori Goodman says the uncertainties make for a bad business deal, and the Navajo Nation is at risk of taking on environmental headaches that are likely to be fully revealed in the ongoing environmental reviews – just after the ink dries on the sale.
“BHP is trying to dump this coal mine on the Navajo Nation,” she said. “It’s a bad business decision. And this could bankrupt the Navajo Nation.”
Diné CARE has been encouraging individual chapters on the reservation to pass resolutions opposing the sale; four of the Nation’s roughly 100 chapters have done so to date. The group has also been writing letters requesting federal oversight of the deal – something proponents say is unnecessary given that the BIA approved the original mining lease in 1957 – and circulating a petition to enlist citizen opposition.
“We, the undersigned concerned community members request for the Navajo Nation Council to rescind Legislation 0149-13, which includes the waiver of BHP Billiton’s past, present, and future liabilities … from the Navajo Mine,” part of the petition reads.
Despite the uncertainties that are bothering Diné CARE, NTEC’s Gundersen says he’s optimistic about both the prospects of sealing the deal for the purchase of the mine, and its benefits for the Navajo Nation. He points out that political will is high for resolving all remaining aspects of the sale.
“The Four Corners Power Plant supplies the most cost-effective source of electricity to the southwest,” he said. “The reliability of the power grid in the southwest depends on Four Corners’ continued operation.”
As for the sale terms that would absolve BHP Billiton of “past, present and future” liabilities connected with the mine, Gundersen said that’s standard in a transaction like this.
“The purchase price reflects that cost-benefit analysis,” he said. “At some point you have to cut off the liability, just as you do the benefits. Otherwise, there’s no point in selling.”
The Navajo Mine is actually owned by BHP Navajo Coal Company (BNCC), a subsidiary of BHP Billiton, which is an international company with two mines in the United States. The complex is separate from the controversial Navajo Generating Station in Page, Arizona, which gets its coal from the Kayenta Mine.
In 2011, the mine poured $41 million into the Navajo Nation economy, or about 32 percent of the Nation’s general fund. While Gundersen couldn’t provide more recent figures, he said they haven’t changed appreciably. Together, the Navajo Mine and the Four Corners Power Plant employ about 900 people, primarily Navajo tribal members.
Gundersen said besides the short-term continuation of the jobs, tribal ownership of the mine has already spurred education campaigns to encourage school-age kids to go into professions that will support it, including engineering, financing and marketing. And the word “transitional” in NTEC’s name is key, he said; it represents a slow switch to renewable energy. Proponents of the sale have long pledged that 10 percent of the mine’s profits will go toward greener and longer-term energy solutions, including but not limited to clean coal.
That may come as some small solace to environmental groups, which have complained that the buying of a coal mine keeps the tribe dependent on an industry infamous for its negative impacts on regional air and water quality.