Resource Development Council




Possibly half of the nation’s coal resource lies buried in Alaska, undeveloped due to lack of markets and infrastructure.

Geologists say Alaska may contain as much as 6 trillion tons of coal, enough to supply the entire nation’s need for more than 1000 years. Upwards of 80 percent of these huge reserves underlie the 23-million-acre National Petroleum Reserve on the North Slope. Other major deposits are located in Cook Inlet-Susitna Lowland and the Nenana Trend.

While Alaska is coal-rich, it is mining poor. The Usibelli Coal Mine operates the state’s only coal mine near Healy, selling about half of its annual production to Interior power plants and shipping the rest to Korea and Chile.

All that may be about to change. New advances in clean-air technology and rising natural gas prices have prompted several of the state’s largest fuel consumers to take a hard look at coal.

The most exciting prospect is on the Kenai Peninsula where Agrium is pursuing an environmentally-friendly technology that could add decades to the life of its Kenai Nitrogen Operations, support hundreds of good-paying jobs, preserve a major tax base, and provide a new source of competitively-priced electricity.

Agrium’s Kenai Gasification Project would develop a world-class, lowemission coal gasification facility that would provide Alaska’s largest value-added business the feedstock it needs to operate over the long term. The plant now uses Cook Inlet natural gas to make fertilizer but has operated at half capacity in recent years due to a natural gas shortage.

Agrium began investigating coal gasification in the winter of 2004 and is concluding its Phase 2 analysis, which includes a detailed feasibility study. If the company decides to go forward, the facility could be operational by 20112012.

First discovered in 1792, coal gasification has made huge environmental strides in recent years. Today’s technologies efficiently turn coal into a gas that can be cleaned of virtually all of its pollutant-forming impurities. The CO2 that is surplus to the manufacturer of fertilizer could become its own value-added product by injecting it into the aging Cook Inlet oil field to produce an estimated 300 million barrels of additional crude. This would not only increase oil production, but it would efficiently sequester a gas that some folks argue may contribute to climate change.

The Agrium project would require a new, coal-fired power plant, one of three coal plants being discussed for Southcentral Alaska.

Even though these plants are barely into the planning stages, some critics are reacting with pronouncements of environmental doom.

Southcentral Alaska now relies on natural gas to generate the bulk of its electricity, and much of the current generating equipment is approaching retirement. Replacing gas generation with coal generation diversifies our power supply, better controls the price of electricity and releases increasingly scarce Cook Inlet gas for home and business heating.

We can make this switch without adverse impact to the environment. Today, we have a new generation of energy processes that sharply reduce air emissions and other pollutants when compared with the older coal-burning systems. These technologies are in use around the world. Coal is the world’s most abundant fossil fuel and the United States has lots of it.

Coal is Alaska’s largest untapped resource, but until recently natural gas prices were so low, our coal had virtually no market. All that is changing – at the same time technology is moving coal generation into the zero emissions column.

All this adds up to a win-win situation for Alaska. Coal could give us competitive new power sources, a new feedstock for our fertilizer plant, a new industry that would create hundreds of good-paying jobs, low environmental impact, and stable economic development for many Alaskan communities.

Steve Borell is the Executive Director of the Alaska Miners Association.