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Prying open the Western Arctic coal storehouse.

In 1826 the ocean-voyaging steamships that were the first commercial users of Alaska's Arctic coal deposits simply anchored off the coastline to tap the resource. But today access is one of the biggest hurdles to developing the region's vast coal fields.

The Northern Alaska Coal Province is believed to hold almost one tenth of the world's coal, with estimates ranging from 460 billion tons to as high as 4 trillion tons. Stretching 300 miles across Northern Alaska, the province holds sub-bituminous and bituminous coals.

Although mineable quantities of high-quality coal lie within six miles of the Chukchi Sea coastline, a short marine shipping window of only 7590 ice-free days prevents regular delivery to major markets that lie thousands of miles away. Use in local domestic markets also has been impeded by a lack of road or rail transportation.

During the past 10 years, studies focusing on potential markets, characteristics of the coal, the nature of northern coal-mining operations and transportation solutions have helped to define the resource's potential. Arctic Slope Regional Corp., a Native regional corporation with offices in Barrow and Anchorage and the major private-sector owner of Western Arctic coal deposits, cites several reasons for promoting development of its coal assets: to create new jobs for shareholders, to establish a less polluting energy source than the diesel fuel currently being used in Northwest Alaska communities and to further diversify the firm's operations and revenues.

Most recent exploration has been conducted at the Dead fall Syncline site. Near the Chukchi Sea, the prospect contains fairly simple coal structures accessible through conventional surface mining techniques. In the spring of 1990, 380 tons of coal mined from that site were used as a heating fuel in 48 test furnaces operating in the villages of Wainwright, Point Lay and Point Hope.

The North Slope Borough has picked up the tab for the project, spending an annual average of almost $1 million since 1986 to gather baseline data, test production methods and train and employ local workers. If coal replaces diesel fuel for space heating in the three communities that have tested the coal, it's estimated that about 7,000 tons of coal per year would be consumed. According to Arctic Slope's calculations, 50,000 tons would have to be marketable from the Deadfall Syncline site to make the operation feasible.

Other potential users in Alaska are Nome, Kotzebue, the Red Dog Mine and military bases at Adak and Shemya. This year the state awarded the coal project $200,000 to study power plant design and the economic implications of developing energy sufficiency in the region. In June, the North Slope Borough allocated @1300,000 to gather data on transportation, vegetation studies necessary for reclamation, permitting and other concerns related to mine development for in-state use.

Awaiting an October decision is a request for $3.5 million in research and development monies from the U.S. Department of Interior's Bureau of 'Mines to examine problems of a large commercial mine operating in the Arctic.

Beyond domestic consumption, marketing efforts also have focused on Pacific Rim nations. Former governor Bill Sheffield has represented Arctic Slope Regional Corp. in overSeas meetings with buyers in Korea and Japan.

The market for our coal really opens up in 95 or 96 in the Pacific Rim,"says Kent Grinage, North Slope regional manager for Arctic Slope Consulting Group, a subsidiary of Arctic Slope Regional Corp. He explains that Japan and Korea, which have major coal contracts extending through the middle of the decade, aim to reduce dependence on Australia and to use multiple suppliers for powerhouses. Grinage says prospects are further enhanced by the tightening of environmental standards.

"In the Pacific Rim, about 52 percent of consumption uses high-volatile bituminous coal,' he adds. Low in sulfur, moisture and ash, the highvolatile bituminous coal of the Western Arctic is excellent for steam generation. As far as we know it's the lowest sulfur content bituminous coal on record,' says Grinage.

Europe, whose coal generating plants typically are highly polluting, also is expected to seek lower sulfur coals. Arctic Slope's John McClellan, vice president of international business development, has visited shipping companies in the Soviet Union to discuss the possibility of sending coal via the Arctic shipping route aboard Russian icebreakers.

Currently Usibelli Coal Mine in Healy is the only coal exporter in Alaska, although Idemitsu Kosan, a Japanese energy concern, expects to begin exporting bituminous coal mined in the Matanuska-Susitna Borough by 1991. Grinage feels that the new Healy cogeneration plant and the Mat-Su mine bode well for coal development in the state, reflecting increasing interest in the resource.

Domestic markets could be served with less complicated transportation solutions, such as the tundra vehicle used last winter. The large-tired transporter towed loads, typically about 64 tons of bagged coal, to a lagoon five miles from the Deaffall Syncline for barge delivery.

But production for international markets, which need year-round delivery, will require some innovative transportation solutions and development of a tidewater shipping facility or links to an existing outlet such as the Red Dog port site or Port Safety near Nome. To compensate for the Arctic's seasonal shipping limitations, one possibility is stockpiling coal at a site near Dutch Harbor in the Aleutian Islands.

Suggested transportation solutions to move the coal to tidewater include a slurry pipeline and a shortline railroad that would help to provide access to other mineral-rich properties in the Western Arctic. I think once we've cracked the transportation thing, it'll be a matter of three to five years to prepare the mine and infrastructure,' says Grinage.

He adds that many interests would benefit from the development of coal prospects in the Western Arctic: The borough is concerned with labor and its own use; the state with the potential for diversification and reducing the cost of power subsidies; Arctic Slope Regional Corp. with a source of revenue and shareholder employment; and the federal government with the issue of balance of trade.

If we do sell the coal, it would prove probably to be the cheapest energy source in the area and would solve transportation constraints of the region. It also would help other developments and commercial activities in the region,'says Grinage.
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Author:Griffin, Judith Fuerst
Publication:Alaska Business Monthly
Date:Sep 1, 1990
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