An uncertain future
Stakeholders in negotiations for lease extension
Near Page, a small Arizona town bordering Utah and the Navajo Reservation, there are two masses along the horizon that stick out like sore thumbs. One, a shimmering body of water that almost looks like a mirage beyond the spans of red desert dirt and nestled below the high plateaus and, two, tall stacks reach up into the sky, bellowing dark clouds of smoke into the air. The stacks belong to the largest coal-fired power plant in the western United States — generating about $40 million from coal royalties and lease payments for the Navajo Nation.
In February, the utility owners voted to close the plant following the end of their lease in December 2019 due to what they say is their current inability to compete with natural gas prices. Currently pending, is an agreement with the Navajo Nation as to whether they will be allowed to operate until the end of the lease and then start decommissioning the plant or if they’ll have to close sometime this year in order to complete that process by 2019.
Salt River Project (SRP) operates the plant and is part-owner along with Arizona Public Service Co., NV Energy, Tucson Electric Power and the U.S. Bureau of Reclamation. The Bureau of Reclamation would like to see the plant continue operations, but cannot afford to operate the plant on its own.
A decision will have to be made by July 1 on a Replacement Lease, which according to a press release by SRP would allow continued employment at the plant and revenues for the Navajo Nation and Hopi Tribe for more than two years. It also allows for an option for the Navajo Nation to operate the plant beyond the end of the lease, if they decide to in the future.
The plant provides approximately 800 jobs between the power plant and the coal mine in Kayenta, which slurries coal to the plant from nearly 100 miles away. NGS coal royalties and lease payments make up 80 percent of the general revenue for the Hopi Tribe, and 18 percent for the Navajo Nation, according to Navajo Nation Speaker LoRenzo Bates.
The facility contributed about 14.2 million metric tons of carbon dioxide emissions in 2015, is the third largest coal plant in the United States and the seventh largest individual source of greenhouse gas emissions in the country, according to an EPA report. This is down from 17.2 million metric tons reported by the coal plant in 2014 and the lowest emissions reported in in the last five years.
The tribal governments hope that President Trump’s promise to save coal will extend to federal assistance for the continued operation of NGS. In March, The Trump Administration signed the Energy Independence Executive Order which directs energy regulatory agencies to identify ways to eliminate regulatory barriers to the operation of coal, oil and gas producers. However, some individuals locally are pushing for more direct action.
“The basic foundation of any society to thrive is power and water,” said Erwin Marks, an SRP employee working at NGS. “That to me has to come before anything else.”
Marks has worked for SRP for nearly two and a half years. He currently manages the planning and scheduling for the maintenance department at NGS. Marks, along with Lechee Chapter President Jerry Williams, drafted a resolution from the chapter to encourage the Navajo Nation Council to consider a federal subsidy for the coal that NGS buys from the Kayenta Mine. First he says that the current lease negotiations between the Navajo Nation and SRP need to be finalized before a fuel subsidy or other solutions could be considered.
“The Navajo Nation needs to sign this lease extension, that is so critical,” said Marks. “Because otherwise nothing else will matter — we can’t work an additional three years, we can’t plan anything.”
He came up with the idea for a fuel subsidy back in January during an employee meeting in which senior management at SRP announced that they were considering shutting down NGS. He wanted to help keep the plant open and felt that as a tribal member that maybe he could.
“Fuel cost is the biggest expense for NGS so I figured, where can we get the biggest bang for our buck,” said Marks. “How can we find a way to reduce the fuel costs outside of the negotiations with Peabody Coal Company?”
Marks notes that the fuel subsidy is just a partial solution and that it will take finding new ownership and additional ways to reduce costs. This will take looking at the operation and maintenance of the plant as well as changing the overhaul schedule without sacrificing reliability and safety.
Marks suggests that if the Navajo Nation takes over ownership and operation of the plant, it could be a way of lowering costs as they would no longer be collecting royalty or lease payments but collecting a profit from the direct revenue of the plant.
“It would really give them a chance to be in control and decide their own destiny,” said Marks. “There’s always a struggle on the reservation to have something that produces an economy and they’ve been struggling with that for years.”
Born and raised on the Navajo Reservation, Marks left — like many young adults do looking for opportunity — to attend school in California and Utah, where his wife currently resides finishing up her respiratory therapy program at Weaver State University. Marks has previously worked for 23 years as a manufacturing and quality engineer for what is now Orbital ATK, building rocket motors for the space shuttle program. He has also worked in manufacturing for military communications systems and aircraft and tactical missiles.
“NGS offered me an opportunity to come home and to really spend some time with my immediate family, my extended relatives and to be able to use my own language and to redevelop the relationships with the Navajo people,” said Marks. “Because there is no opportunity we always see a mass exodus of young Navajo people leaving the reservation to get educated and to get experience outside the reservation.”
Marie Justice feels the same way about her job working for Peabody Energy at the coal mine in Kayenta. Back in 1988, she started driving trucks for the Black Mesa Mine, which is adjacent to the Kayenta mine. Following the closure of the Black Mesa mine in 2006, she was laid off. She found a job driving trucks at the Kayenta mine a few years later. Before that, she was driving a school bus — a job that didn’t provide enough to raise her family.
“At the time it was probably unheard of for a woman to go to work in the coal mine,” said Justice. “But I did.”
Justice is also the president of the Kayenta 1620 chapter of the United Mine Workers of American (UMWA). She is concerned about what will happen to young mine workers with families if the plant closes.
NGS is the sole customer of the Kayenta Mine, which generates _____ coal each year for the facility. If NGS closes its doors, the mine will soon follow.
She says that those that want to see the mine close aren’t considering the services that the mine offers that may go with it, like the community water pumps Peabody operates, the free coal available to Navajo families in the winter months and the maintenance of the rural dirt roads that the mine utilizes for operations.
“The NTUA will take over and they’ll charge everybody,” said Justice. “They charge everybody for water. Everybody’s going on about their water and whatnot — well, you’ll have to pay for it.”
In addition, she doesn’t feel that the jobs lost can be replaced with renewable energy operations like solar, as some opponents to the mine are lobbying for. As a result, she fears that young Navajos who lose their job at the mine will have to leave the Navajo Nation to find work that pays a similar salary — leaving their family on the reservation and parenting from afar.
“Both parents are on the road and the grandparents are raising their kids,” said Justice. “These are the kinds of things that are going on and people don’t seem to understand the situation.”
With the unemployment rate on the Navajo reservation about 42 percent, and closer to 66 percent on the neighboring Hopi reservation, preservation of good paying jobs is important. According to the 2000 U.S. Census, 46.5 percent of families with children living in the Navajo Nation were living below the poverty level.
However, the fate of the Navajo Generating Station and the mine will not only affect those living on the reservations, but in the city of Page as well.
Page Mayor Jim Diak fears that the jobs that will be lost at NGS and the mine are just the tip of the iceberg, if families of these skilled workers leave to find better paying work elsewhere.
“So then how many people leave the community before your schools suffer because SRP pays a lure of taxes to the county which distributes that back to the school system,” asks Diak. “How many jobs do you lose before Walmart says you know what, it is just not worth us being here anymore?”
While Diak sees tourism as a continuing industry for the Page community, he says the growth in the service industry cannot replace the typed of skilled labor jobs lost at NGS and Peabody.
“You put that 10 dollar an hour wage against a 70 dollar an hour juryman, instrument tech — or operator or electrician or mechanic — and you’ve got to add a lot a lot of jobs to produce that type of income back into the community,” said Diak. “A lot more jobs.”
This is the first year that SRP didn’t bring around 400 employees in to do overhauls at the facility between January and April. Diak says that their patronage supported the local economy through their slowest period — the tourism off-season. However, looking at the first few months of the year so far, revenue is 17 percent higher than last year, though that is only in hotel.
“So it can be very, very devastating,” said Diak. “Will page survive? Yes. will we be surviving as we know it today? Probably not. I think the median income will decrease considerably.”
Coconino County Board of Supervisors Chair Lena Fowler is working in conjunction with ECoNA President and CEO John Stigmon to develop new economic strategies for the region. The Economic Collaborative of Northern Arizona, or ECoNA, is an agency that offers services to cultivate business attraction, workforce development as well as business retention and expansion in northern Arizona.
Stigmon has been working with the county since May of last year to gather insight into how the surrounding communities could be affected by the closure of NGS. In addition to hearing from the Page City Council and the Page Chamber of Commerce, he’s traveled to cities along the Utah-Arizona border, like Kanab, Utah and Fredonia, Arizona. Focus groups with local Navajo chapters have also been a focus, the largest recently being held in LeChee right outside of Page with almost 100 people in attendance.
“Replacing a major industrial employer is not an easy task in a very rural area,” said Stigmon. “So there is no magic bullet here, there’s no big company that we’re looking at at this point to replace it, because number one, it is hard to put something there.”
While he says he sees tourism playing a part in their economic plan, he says that it has not been the focus because it cannot replace the average salary coming out of NGS, which is close to a 100 thousand dollars a year.
“So we have some challenges with replacing those types of jobs,” said Stigmon. “Tourism won’t get it done.”
However, he says that it’s too early in the process to say what their recommendations would be to promote a sustainable economic future for the region. The plan will further be discussed at the Economic Development Conference hosted by the Page Chamber of Commerce on May 18.
Last week, a community forum on the future of NGS was held at the Lake View Elementary Primary School, state legislators, Page city officials and other stakeholders spoke on what the closure could mean to the surrounding communities.
“I think that it’s safe to say that we know that the power of the generating station will be decommissioned,” said Ariz. State Representative Mark Finchmen. “What we’re really talking about is how and when.”
Finchmen went on to say that while he hears the conversation around renewable energy, he just doesn’t see how solar could replace coal due to what he feels would be unreliable optimal weather conditions.
“What does cause me grave concern is the potential of the destruction of a couple of nations,” said Finchmen. “The Hopi Tribe is at significant risk of not having income.”
Many spoke on the amount of money that NGS brings to the Page and surrounding communities not only through royalties to the Navajo Nation, but donations to schools and hospitals as well. Mayor Diak stated that the facility owners, SRP, donated $200 thousand Coconino Community College in Page, pointing out that other locations of the community college have been closed down due to lack of state funding. The Page Unified School District’s Superintendent Rob Varner said NGS provides $2 million dollars to their school district.
Judy Franz, the Executive Director of the Page Chamber of Commerce, also owns a fishing guide service. She worries that the business that NGS employees bring her business, as well as others, during the off-season will be lost as well.
Most in attendance spoke about the economic injury the loss of the plant would inflict, but there were a few environmentalists invited to speak to the community. Percy Deal, a Big Mountain resident who lives near the Peabody mine and a member of the environmental activism group DINE Care, spoke on the adverse health effects of the plant and the mine. In addition, he said that the Navajo Nation should look toward renewable energy like solar and wind.
Navajo Nation officials, the federal government and NGS had aimed to come to a decision on the possible NGS lease extension by the beginning of May, but have not yet released one to the public. Time is running out for their July 1 deadline, as the Navajo Nation Council will have to start voting on the agreement once it is drafted.
In 1969, the construction of the Navajo Generating Station (NGS) was seen as the necessary means to a fruitful end. The end being the power waiting under the red earth, Arizona’s massive coal reserves. $650 million was spent constructing a plant in which both the Navajo and Hopi economies would become heavily dependent upon.
Arizona needed water — and in 1968 President Lyndon B. Johnson signed a bill approving the construction of the Central Arizona Project, a large canal diverting water from the Colorado River near Lake Havasu down through central and southern Arizona. The project allowed irrigation of land for farming and the transportation of water to Phoenix and Tucson, in addition to rural areas.
Changing the course of water from the Colorado River takes a lot of power — dams constructed of steel and concrete, with pumps that use a great deal of electricity to move the water around.
A lake seems out of place in Page, a small desert town on the border of Arizona and Utah. That’s probably because Lake Powell isn’t really a lake at all — but the second-largest man-made reservoir in the U.S. Glen Canyon Dam holding over 27 million acre feet of water. But it isn’t efficient in the high desert of Arizona, and much of this water is wasted — seeping below our water tables or evaporating into the air.
Since then, thousands of tons of nitrogen oxide have been released into the atmosphere every year. The burning of coal creates emissions made up of sulfur dioxide (SO2), nitrogen oxides (NOx), and particulates, all of which have been shown to contribute to respiratory illnesses and lung disease. Mercury, along with minute traces of other metals, is also released into the air during the process and has been linked to neurological and developmental damage in humans.
While NGS meets the standard for air requirements, the contaminants from the Kayenta Mine pollute the air and eventually reach potential water supplies. Between the pollution and the usage of the aquifer to move coal, this leaves little water nearby for those who live life on the reservation.
The economic hardship on the reservation makes the fight against coal pollution difficult. The question remains as to whether there is a solution that appeases a dichotomy of giving jobs to a highly-unemployed demographic and worshipping water as a life force.
The Navajo Generating Station is the seventh largest contributor of emissions in the United States, with nearly 14.2 million tons of greenhouse gases barreling into the atmosphere in 2015 alone according to the EPA.
The U.S. EPA Clean Air Act – Obama administration’s Clean Power initiative requires Arizona to reduce its carbon output by 52 percent. Wrapped up in litigation, the state has not yet been forced to comply.
Forest Lake Chapter House can’t be located on a map. Even with the correct coordinates, cell reception is spotty and unreliable in the area — so relying on a smartphone is out of the question. Written directions, instructing you to drive 17 miles north of the Conoco Gas Station located in Pinon, can be found on the chapter house’s website.
“Maps aren’t any good on the reservation,” says Percy Deal, a lifelong resident of the Big Mountain area.
A seemingly endless road of red dirt spans ahead, wide and graded for the trucks that pass to and from the Peabody mining operation near Kayenta and Big Mountain on the Navajo Reservation. A cloud of dust – oddly, black in color – hangs in the air, kicked up by a truck barreling down the road. Signs lettered in spray paint can be seen every few miles, reassuring travelers that they aren’t lost.
A paved road appears ahead. Just over the hill, nestled next to a senior center and a few modular homes, a handful of vehicles are parked in front of Forest Lake Chapter House.
The meeting was scheduled to start at 10:30 a.m., but it’s thirty minutes past the hour and Percy is still rifling through papers on a fold out table setup at the front of the hall. People are slowly trickling in as the minutes pass, but he doesn’t seem worried. Percy is 67 years old and retired, but spends a lot of his time volunteering with Dine CARE (Citizens Against Ruining Our Environment), a non-profit environmental group from the Navajo Nation. He says his family has lived on the land located about 20 miles from the Kayenta mine for six or seven generations.
“That’s where our root is — that’s where I want to stay,” says Percy. “And for that reason, I really want to take care of the land, take care of the water and all of our environment in that area.”
After a short prayer in Navajo, the community meeting begins with a presentation on the Navajo Generating Station coal plant and the Peabody coal mine in Kayenta that fuels it. The agenda — posted on the wall, written in sharpie on an oversized sheet of paper — promises to go over the current lease agreements, the water use by these operations, health and environmental issues stemming from them and the impact on jobs and the economy of the Navajo Nation.
The number of residents that trickled into the meeting could be counted on two hands. Following her presentation on the adverse health impacts of the coal mine — in which no one in attendance had any questions — retired registered nurse Alleda Begaye sat down and quietly told Percy “it’s hard” as most area residents are primarily concerned about losing jobs if NGS and the coal mine shut down in 2019.
Percy Deal fights for the right for his people to use the land and to have access to clean water — their water. He regularly hauls water by truck from the Hard Rock Chapter House where they have a filling station. In the summer he has to make the two-hour trek twice a day for his livestock.
On June 23, 1989, Mabel Benally returned from a day trip to Page to find 86 of her sheep and goats lying dead in a corral. Her sister and her children were helping herd the sheep while she was away. It was hot and the sheep were thirsty. They drank water from a nearby wash and died shortly after returning home. She couldn’t bring herself to bury them, not until someone investigated their deaths.
Benally lives with her family near the Kayenta Mine nearly 80 miles southwest of Page in Navajo Country. On US 160 an abandoned gas station acts as a marker to the mine’s access road, with operations 14 miles further south. Caution tape surrounding gas pumps and boarded-up windows with signs that say “keep out” and “no trespassing” act as further evidence to weary travelers that the Black Mesa Shopping Center is indeed no longer operational.
As a child, she herded sheep across the area that is now the Kayenta Mine site, long before Peabody started their mining operations in the mid-1960’s. The small house that she resides in with her family in the shadow of the Kayenta operation is one that she is makes clear that they built without any financial aid from Peabody. Benally has remained diligent over the years in her fight against Peabody, hoping that the Kayenta Mine will be shut down like the adjacent Black Mesa mine was in 2005. In 1999, she was arrested along with her husband and two daughters for protesting the expansion of coal stockpiles onto her land-use area.
The Black Mesa Mine, also owned by Peabody, supplied the coal to the Mohave Generating Station by slurring coal through a pipeline that ran 275 miles to the plant located in Laughlin, Nevada. The station wasn’t able to meet emissions standards set by a 1999 court order due to the costs of retrofitting the plant as well as finding a new fuel source — as theirs was cutoff in 2005 with the closure of the Black Mesa Mine. The mine used the Navajo Aquifer to provide the water to slurry the coal to the plant, but after the Navajo and Hopi Tribes told Peabody that they could no longer use their water for slurring the coal company was left without a way to transport the coal. The generating station had long been the ire of environmentalist groups because of its contribution to haze that would settle in the Grand Canyon nearly 80 miles away.
Benally speaks only Navajo and her words have been translated into English by a bilingual Navajo tribal member.
“The smell of rot was everywhere, but I stayed with the sheep,” said Benally. “The lambs were all hungry for milk and kept running up to the dead sheep — we had to pen them up.”
Her family wanted to bury the sheep before investigators showed up, but Benally held out until the smell of rot was too strong. She cries as she remembers making the decision to make a burial ground and build a fire.
“I allowed my sheep to burn,” said Benally. “I think about it at night. It’s not good to cry for the sheep, I’m told — but I cry a lot.”
Three weeks later on July 14, 1989, the Office of Surface Mining came down from the Albuquerque Field Office to conduct an inspection. It was determined that the livestock died after drinking water that was flowing from an industrial truck wash area to a pond. The water was tainted with ammonium nitrate, fuel oil (ANFO), a blasting agent used by the Peabody mine. The washing of these emulsion trucks in that area has since ceased and Benally was compensated for the loss of her goats and sheep.
Mabel Benally is suffering from 4th-stage bone marrow cancer. She says she was told by a doctor it is likely due to “Peabody’s use of chemicals.”
Peabody Energy entered an agreement with the Navajo and Hopi tribal governments in the 1960’s to extract coal from their land. Some people believe that the Navajo-Hopi Settlement Act of 1974, which is responsible for the relocation of Navajo families to partition that land off to the Hopi Tribe in land disputes, was really a ploy to remove Native people from the land in order to expand mining operations through lease agreements with the tribes. There is not only distrust of the federal government, but also of tribal government as well because of this. This forced relocation Navajo people from their land is reminiscent to some to The Long Walk that began in 1864, in which the U.S. government marched the Navajo from their homes in Arizona to New Mexico.
Maxine Kescoli v. Office of Surface Mining and Peabody Western Coal Co.
The Office of Surface Mining renewed Peabody’s mining permit for Black Mesa on July 6, 1995. Forest Lake Chapter resident Maxine Kescoli sued the company claiming they planned on mining within 300 feet of her home without permission, in addition to having disturbed ancestral burial sites.
She claimed that she as well as other elders in the area were “surface owners” of the land, even if it is held in trust by the U.S. government. Judge Ramon Childs ruled in her favor in March 1996, making the permit invalid and halting the operation of the mine. However, that victory was short-lived — only two months later in May, Peabody was allowed to resume operations pending their appeal of the decision. In October, Child’s ruling was overturned.
However, that’s not the only legacy that Kescoli carries with her. She has remained active in the Forest Lake Chapter and across the United States teaching others about the dangers of coal. Kescoli still lives near the Kayenta mine, though she does have a new home that Peabody paid for as a part of their settlement. However, she says that the dynamite blasts shake her home during the day and that black dust settles over surfaces and in their lungs while they sleep.
“I hear cracking noises now, this house is slowly coming apart,” said Kescoli. “These are concerns that get people worried. They talk about uranium, too. The dynamite blasts create a red dust cloud and a haze. Smoke and ashes comes from the blasting.”
She says that is the way life is here now. She worries about the drinking water in her community that she feels has been poisoned by the Peabody Energy company.
“The water we fight to protect belongs to us,” said Kescoli. “The Creator provides water to the land… we are devastated to see the erosion from our Motherland falling down — we have to be Water Protectors.”