Black Mesa studies to resume, slurry appears dead

By Marley Shebala, Navajo Times, April 17, 2008

WINDOW ROCK – The 38-year-old Black Mesa Pipeline is retiring.

The federal Office of Surface Mining has directed the pipeline’s present owner, Black Mesa Pipeline Co., to remove all trace of the structure, which was used to transport coal slurry from the Black Mesa Mine to the Mohave Generating Station in Laughlin, Nev.

“BMPC must take down all structures and facilities owned by them, regrade the area, and revegetate the area under the interim regulations of the Surface Mining Control and Reclamation Act of 1977,” said John Stucker, the tribe’s senior mining engineer, in an April 10 memo. “If we have any need for these facilities we need to communicate with BMPC soon.”

At the same time, federal officials plan to resume studies of another alternative for Black Mesa coal, Stucker said in the memo, which was directed to the Navajo Nation Black Mesa environmental impact statement team.

The EIS had come to a halt after no buyer for the Mohave Generating Station came forward. Its owners close it in 2005, rather than invest $1 billion needed to make it meet federal clean air standards.

The announcement that work on the EIS will resume signals a high probability that discussions are once more underway between the tribe and Peabody Western Coal Co., which operated the Black Mesa mine under a lease that expired in 2005.

The generating station was the mine’s sole customer, and the pipeline was the sole method of transporting coal from the mine, so the mine closed when the power plant did.

That fact, along with a recent court ruling that the tribe is owed millions in back royalties on the coal, had chilled negotiations to renew Peabody’s lease and make permanent the company’s control of all coal reserves on Black Mesa.

Stucker declined to comment on his memo, saying that Navajo Nation attorney General Louis Denetsosie had instructed him to not talk to the media.

“I’m not supposed to talk about it,” he said. “It was a government deal. It was an internal message to the Black Mesa EIS team and it wasn’t to be released to people. It’s nobody’s business. When it becomes official, OSM will put out an explanation. They are the lead agency and the tribe is working cooperatively with them.”

Denetsosie did not return multiple calls this week seeking comment. President Joe Shirley, Jr. also did not return a call for comment. His spokesman, George Hardeen, said Shirley was in Washington, D.C., to testify on water rights.

Plan B

Retirement of the 273-mile pipeline is tied to the unexpected reactivation of the Black Mesa EIS.

Before the reactivation, the draft environmental assessment centered on Alternative A, which envisioned Peabody continuing to ship coal to Mohave via the slurry pipeline. Production would also increase at the nearby Kayenta Mine, which sends coal via an electric train to the Navajo Generating Station at Page.

Plan A also involved reconstruction of the 273-mile coal slurry pipeline, construction of a coal-washing facility, two more miles of coal hauling roadway for the Black Mesa Mine, 1,600 acre-feet of additional ground water usage annually, development of 12 to 21 water wells in Leupp, Ariz. and construction of a new 108-mile pipeline to transfer water from the Leupp wells to the mine.

The plan did not explain how Mohave which closed in December 2004 with no plans to reopen, would use the coal.

A majority of the people providing comments to OSM on the draft study opposed Alternative A.

OSM suspended work on the environmental review May 18, 2007, after Southern California Edison, one of the Mohave owners, announced its decision to discontinue efforts to find a buyer wiling to restart the power plant.

Stucker, in his April 10 memo, stated that the EIS will not shift its focus to Alternative B, which still assumes that Peabody would control rights to all Black Mesa coal reserves in a lease or leases that continue until the coal is gone.

Under plan B, the Kayenta Mine would continue to supply the Navajo Generating Station, but there is no customer for the Black Mesa Mine.

Peabody spokesperson Beth Sutton shed no light on this point in an e-mail Tuesday, saying only that “Operation of the Black Mesa Mine facilities will remain temporarily suspended.

“We continue discussions with both tribes on coal related opportunities. Subsequent agreements to use the reserves and facilities associated with Black Mesa Mine would require a separate permit action,” Sutton stated.

Water in question

Alternative A called for pumping large quantities of ground water from the Coconino Aquifer to replace the Navajo Aquifer, on which much of Black Mesa depends for its water supply.

Alternative B would use far less water, but the C Aquifer is still under consideration, according to Stucker.

“Since the alternative B does require water, the ‘C’ aquifer will be considered as an alternative water source to cover the minimal needs of the mine for shipment of coal to (Navajo Generating Station),” Stucker said in his memo. “No firm decision has been reached as to how it will be completed; however, Peabody Western Coal Company will be the only proponent for the project to my knowledge.”

Plan B “permits the mining of coal from the entire lease area and allows some use of the ‘N’ aquifer for mining uses, delivering the coal to the Navajo Generating Station,” Stucker wrote.

Peabody’s Sutton said in a second e-mail that any resumption of activity at the Black Mesa Mine would require a separate permit, and that it will not be combined with the Kayenta Mine to supply the Navajo power plant.

Alternative B “affirms the longstanding plan for Kayenta Mine to continue producing approximately 8 million tons per year. It also includes continued use of the Navajo Aquifer,” she stated.

In 2003 the Navajo Nation Council passed a resolution calling for an end to industrial uses of the N aquifer, specifically use by Peabody and the Black Mesa Pipeline, after Navajo and Hopi grassroots organizations rallied communities in opposition to the practice.

Local residents and the Hopi Tribe said that within a few years after large-scale withdrawals began, seeps and shallow wells in the area were drying up. Despite a long barrage of scientific studies asserting that pumping from the aquifer was not drying up surface water sources, critics argued that the coal slurry ran counter to common sense.

The 2003 resolution carried no legal force, but Peabody and the pipeline owner agreed to look for an alternative water source.

Meanwhile, Peabody continues to use the N-aquifer for its Kayenta Mine operations, albeit at a fraction of what it was using before Mohave, the Black Mesa Mine, and the coal slurry shut down in December 2005.

Also in December 2005, the tribe’s lease with Peabody for the Black Mesa Mine, as did the lease for the slurry pipeline.

New deal?

The cost of environmental impact statements is paid by those who stand to make money from the projects under review, so the study was stopped when the stake holders decided Mohave was dead and notified OSM they would not continue funding the Black Mesa EIS.

That Peabody is now asking to resume the study raises the question of whether a new deal is in the works between Peabody and the tribe.

When black Mesa shut down, the tribe had not agreed to extend or renew Peabody’s lease because it was still trying to recover coal royalties it claimed it should have received from the mine.

The coal royalties are the subject of a $600 million lawsuit. In 1999, the tribe sued the U.S. Interior Department and Peabody to increase royalty rates on Black Mesa coal.

The nation’s 1999 lawsuit is tied to a 1985 Interior decision that blocked the Navajos from increasing Peabody’s royalty payments from 2 percent to 25 percent. Instead, the tribe settled for an increase of half that, 12.5 percent rate.

According to federal records, while the Navajo Nation, Peabody and the BIA were re-negotiating the royalty rates, then Interior secretary Donald Hodel met with Peabody representatives and later suppressed a BIA staff finding that supported the tribe’s position on a 25 percent coal royalty rate.

Hodel’s action, and the BIA document, were unknown to the Navajo Nation before 1999. A federal court threw out the complaint against Hodel, but allowed the suit against Peabody to go forward.

It was believed that the federal court had ordered negotiations between the Navajo Nation and Peabody over its $600 million until Attorney General Denetsosie, during an Oct. 11, 2007, press conference, said he asked the federal court to call for negotiations in an attempt to save the 300 jobs at the Black Mesa Mine.

Shirley and his administration had gotten as far as negotiating a draft settlement of the lawsuit by March 2006. It contained sweeping changes to the way water, coal, and other natural resources are governed on tribal land, and would extend Peabody’s coal leases on Black Mesa.

However, the settlement was leaked to the media, prompting enough controversy that it was never brought before the tribal council for approval.

Then, on Sept. 13, 2007, a U.S. Court of Appeals in Washington, D.C., in a stunning reversal of lower court rulings, said the federal government owes the Navajos damages for violating its trust responsibility in connection with the Peabody leases.

Bolstered by the federal ruling, Denetsosie said negotiations were over and the nation was moving forward with its lawsuit to recover lost royalties from Peabody.

But the reactivation of the Black Mesa environmental review could mean a return to the negotiating table, especially if there is a possibility of the Black Mesa mine reopening.

At press time, Wednesday, OSM had not announced its reactivation of the Black Mesa study, and neither Richard M. Holbrook, OSM southwest branch chief, nor Dennis Winterringer, OSM southwest branch environmental protection specialist, had returned calls from the Navajo Times.

Calls to Paul Pertuit, Black Mesa Pipeline Co. spokesperson, also were not returned.