Getting the Shaft

A water dispute puts both the economy and the environment at risk

FLAGSTAFF -- A decade-long, high-stakes financial and environmental struggle that stretches from a 1,000-year-old Hopi village to Southern California electric users is rapidly coming to a head.

At stake are hundreds of high-paying jobs on the Hopi and Navajo Indian reservations in northeastern Arizona; they could be lost if the Mohave Generating Station in Laughlin, Nevada, closes down at the end of 2005 -- which is becoming an increasingly likely scenario.

The economic losses are pitted against maintaining the Hopi tribe's access to ancient and sacred drinking water supplies that appear to be negatively affected by coal mining operations on Black Mesa.

It's a classic case of conservation colliding with economics.

The Mohave Generating Station could shut down unless the nation's largest coal mining company -- Peabody Energy Corporation -- can develop an alternative method of transporting coal from its Black Mesa Mine on the reservations to the Mohave Generating Station, says Steven Conroy, a spokesman for Southern California Edison, which operates the power plant.

Peabody mixes groundwater pumped from beneath the reservations with pulverized coal and injects the slurry into a 273-mile underground pipeline that connects the mine with the generating station.

The Hopi say the groundwater pumping is depleting surface water supplies and drying up traditional and sacred springs and washes that have been the center of Hopi society for more than 1,000 years. The Hopi are demanding that Peabody find another water source for its slurry line.

Meanwhile, the Navajo also are threatening to derail Peabody's future access to coal on Black Mesa. The Navajo are refusing to negotiate a new coal contract until resolution of a dispute over royalties owed the tribe under the current coal contract.

Without definitive water and coal contracts in place by the end of this year, Southern California Edison says it is very likely that the Mohave Generating Station will close at the end of 2005, delivering a powerful economic blow to the Hopi and Navajo, as well as to the Laughlin economy.

"There is a lot to be lost here if the plant does not continue to operate," Conroy says.

If the power plant closes, the Black Mesa Mine also will likely be shut down. The mine's only customer is the Mohave Generating Station.

The mine's 300 jobs generate $22 million a year in wages for Navajo and Hopi tribal members -- about $73,000 a year per job. The Navajo Tribe receives about $17 million a year in royalties, accounting for 12 percent of tribal income.

The Hopi Tribe receives about $3.7 million annually, or 25 percent of total tribal income. The royalty disparity occurs because most of the Black Mesa Mine lies on Navajo land.

Laughlin also will be hit hard, losing 355 jobs worth $20 million annually.

The tribes certainly don't want the generating station to close, nor does Peabody, which ships five million tons of low-sulfur coal from the Black Mesa Mine each year to the 1580-megawatt Mohave facility.

But Peabody and prominent Hopi leaders are locked in a showdown over Peabody's use of groundwater.

Former Hopi tribal chairman Vernon Masayesva is leading a coalition of environmental groups that is steadfastly opposing Peabody's continued pumping from a massive groundwater aquifer that lies beneath the reservation.

For the last three decades, Peabody has been pumping more than 4,000 acre-feet of water a year for its coal slurry operation from the Hopi's sole underground drinking water aquifer. Nowhere else in the United States is the sole drinking water supply of a Native American tribe used in such manner.

Masayesva and his nonprofit Black Mesa Trust have garnered support from major national environmental organizations, including the Sierra Club, Natural Resources Defense Council, Waterkeeper Alliance and Grand Canyon Trust, to force Peabody to find another water source for the coal slurry line.

"We want Peabody to go immediately on a water diet, with a phase out by the end of 2005," says David Beckman, a Los Angeles-based NRDC attorney.

Peabody contends its groundwater pumping has insignificant impact on water supplies contained in a vast sandstone rock formation several thousand feet underground known as the N-aquifer.

The St. Louis-based company says 11 public and private studies of the N-aquifer show that the mine's operation will use less than one-tenth of 1 percent of the water stored in the aquifer. The most recent study conducted for Peabody concluded that the aquifer will quickly recover once mining ceases -- which, if contracts are signed, could continue another 30 years.

Earlier this year, Peabody filed a request with the Department of Interior's Office of Surface Mining, Reclamation and Enforcement to increase the amount of water it pumps from the aquifer to 5,700 acre-feet annually. (An acre-foot is 325,851 gallons, roughly enough water to supply the needs of a family of four for one year.)

Environmentalists dismiss Peabody's aquifer studies as fraudulent.

"The truth of the matter is the Peabody model is the classic cooked-book approach to evaluating the resource," says NRDC's Beckman.

The battle over Peabody's pumping of the N-Aquifer has dragged on for years. But now, a case pending before the California Public Utilities Commission is bringing the contentious fight to what appears to be a final showdown.

Southern California Edison is required to install $1 billion worth of air pollution-control equipment on Mohave's twin generators by the end of 2005. The improvements are required by a 1999 consent decree stemming from a lawsuit filed by environmental groups; it alleged that emissions from Mohave Generating Station were fouling the air in the Grand Canyon and other Southwest national parks.

Southern California Edison says it must begin spending up to $58 million next year to have the pollution equipment in place by 2005. But before it commits to the expenditure, the utility is seeking approval from the California Public Utilities Commission.

As part of the commission's review, future coal and water contracts between Peabody and the Indian tribes must be in place.

"Unless we can be assured that we are going to have agreements on both water and coal contracts, it is going to be difficult for us to make an investment and proceed with a filing before the public utilities commission to make the upgrade to the plant's emissions controls," Conroy says.

Even if the water and coal contracts are signed immediately, Conroy says, Southern California Edison will have to shut down Mohave Generating Station for up to a year to install the air pollution-control equipment.

Further delays in Peabody reaching settlements with the tribes only increases the likelihood that the utility will permanently close Mohave, rather than investing $1 billion in air-pollution controls. Southern California Edison owns 56 percent of Mohave. Other partners in the plant include Salt River Project (20 percent), Nevada Power Company (14 percent) and Los Angeles Department of Water and Power (10 percent).

NRDC's Beckman says there are several alternatives to the N-aquifer that Peabody could use to operate the slurry line.

Waste water from the Tuba City water treatment plant could be used to supply about 1,000 acre-feet of water a year. Peabody, Beckman says, also could use lower-quality water available from other aquifers in the area. Peabody also could implement conservation measures to reduce water consumption.

Another option is to build a new pipeline that parallels the existing line. The new line would recirculate the water used to transport the coal from the mine to the power plant, returning it to the mine. Presently, water used to transport the coal to Laughlin is evaporated once it reaches the generating plant.

Edison's Conroy says it would cost at least $100 million to build a return water line from Laughlin to the Black Mesa Mine.

There also are ongoing discussions to tap into the Colorado River near Lee's Ferry and build a pipeline to deliver Colorado River water to the coal mine and the tribes. But the cost of that option -- more than $75 million -- has been prohibitive.

Southern California Edison is cool to any proposal that would increase the cost of delivering coal to the power plant that would result from any new pipeline construction.

"The more you keep adding to the cost of the project, the more difficult it becomes," Conroy says.

With time running out, there doesn't appear to be a readily available alternative supply of water for Peabody's slurry line.

"We are at a stalemate," Conroy says.

The California Public Utilities Commission has slated a public hearing on the Mohave Generating Station beginning at 1 p.m. October 11, in Tuba City.

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