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Despite impending plant closures, coal’s death could be ‘greatly exaggerated’

By   /   February 24, 2017  /   News  /   No Comments

AP Photo/Ross D. Franklin

This Sept. 4, 2011, file photo shows the main plant facility at the Navajo Generating Station, as seen from Lake Powell in Page, Arizona. Communities in the Navajo and Hopi Nations are bracing for what they say will be devastating economic fallout after the owners decided to close the coal-fired power plant in 2019, leading to the loss of hundreds of jobs, including at a coal mine that supplies fuel for the plant.

 

As another coal-fired power plant prepares for closure, an energy expert tells Watchdog the owners may be acting too hastily.

Facing financial pressure due to the historically low prices of natural gas, the owners of the Navajo Generating Station in Page, Arizona, recently voted to cease operations at the end of a lease that expires in December 2019. If an agreement can’t be reached on the removal of the plant and reclamation of the land with the Navajo Nation, the plant could close as early as this year.

Those owners including several government agencies and public utilities, such as the U.S. Bureau of Reclamation, Arizona Public Service Corporation, NV Energy and Tucson Electric Power. That means these taxpayer-supported entities are picking energy winners and losers.

Marlo Lewis, a senior fellow at the Competitive Enterprise Institute who studies energy issues, said it’s possible “coal’s death will prove to be greatly exaggerated.”

“The usual suspects crow that coal can’t come back, it can’t compete with gas,” he told Watchdog.org. “I believe it’s too early to tell.”

The Navajo Generating Station is operated by Salt River Project, which announced the impending closure on Feb. 13.

“The utility owners do not make this decision lightly,” Mike Hummel, deputy general manager of SRP, said in a statement. “NGS and its employees are one reason why this region, the state of Arizona and the Phoenix metropolitan area have been able to grow and thrive.”

The closure will be a devastating blow to the Navajo and Hopi people. About 500 people work at the plant, 450 of them members of the Navajo. Another 330 are employed at the Kayenta Mine about 80 miles away, almost all of them Navajo or Hopi people. That mine is the sole fuel source for the plant.

Tribal leaders for both the Hopi and Navajo people wrote to U.S. Sens. John McCain and Jeff Flake and Congressman Tom O’Halleran prior to the announcement, pleading with those Arizona members of Congress to help keep the plant open.

Navajo Nation president Russell Begaye and council speaker LoRenzo Bates called the plant a “vital economic engine” for the tribes, the city and the state. They cited a study from Arizona State University that said the state stands to lose $18 billion in gross state product if the plant doesn’t continue operating until 2044, the original planned closure date for NGS.

Hopi chairman Herman G. Honame wrote that coal revenue produces more than 85 percent of the Hopi Tribe’s general fund, which is used to fund essential government services. He also noted the tribe has an unemployment rate greater than 60 percent.

“These closures would have a dire impact on the Hopi as well as other local and state economies,” he wrote.

The impending closure of NGS is part of an anti-coal trend that reached a fervor pitch during the Obama administration.

Five other coal-plant closures have been announced since November. The list includes:

  • A.B. Brown in Mount Vernon, Indiana, which will close in 2024.
  • F.B. Culley in Newburgh, Indiana, which will also close in 2024.
  • Stuart Station in Aberdeen, Ohio, set to close in 2018.
  • Killeen Station in Wrightville, Ohio, also slated for closure in 2018.
  • Roanoke Valley in Weldon, North Carolina, with a closure date still to be determined.

Lewis told Watchdog that Obama’s policies were designed to put a stranglehold on coal, even if economic conditions changed.

He said that even though President Trump promised to roll back many of Obama’s environmental regulations, it will take time for the impacts to be felt.

CEI photo

LEWIS: Coal could still rebound, especially if the federal government gets its thumb off the industry.

“Trump promised to take the feds’ thumbs off the scales,” Lewis said. “It’s only now starting to happen.”

Last week Trump signed legislation to kill the Office of Surface Mining’s Steam Protection Rule.

That rule, finalized in December, was designed to protect waterways from coal mining waste, but the coal mining industry argued it would be too costly to implement and would hurt employment in an already struggling sector.

Trump called it “another terrible job killing rule” as he signed the document to overturn it.

Begaye pleaded earlier this week for the Trump administration to step in and save NGS.

“This dilemma provides an opportunity for the Trump administration to live up to its promise to the American people that it will stand behind the coal industry,” he said.

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Johnny Kampis is National Watchdog Reporter for Watchdog.org. Johnny previously worked in the newspaper industry and as a freelance writer, and has been published in The New York Times, Time.com, FoxNews.com and the Atlanta Journal-Constitution. A former semi-professional poker player, he is writing a book documenting the poker scene at the 2016 World Series of Poker, a decade after the peak of the poker boom. Johnny is also a member of Investigative Reporters and Editors.