Powering Alaska and the Pacific Rim.

• Author: Stricker, Julie
• Position: Alaska coal reserves - 1996 Alaska Miners Convention

Vast coal reserves in Alaska may soon be providing heat and light to small rural villages as well as countries surrounding the Pacific Ocean.

A burst of economic growth on the Pacific Rim is fueling an interest in Alaska coal to help provide power for development. "The total demand for coal, particularly in the Pacific, is rising quite dramatically," said John Sims, vice president of marketing for Usibelli Coal Mine Inc.

"Countries like Japan, Korea and Taiwan, with more mature economies, are needing to provide more and more energy to meet their development demands," Sims said. He mentioned several coal-fired power plants on the drawing board to meet this demand.

"Coal is a fuel that you can count on as being much more stable in its pricing than oil or natural gas," Sims said. It's not uncommon for coal contracts to be written for 15 or 20 years, with price increases tagged to economic indicators.

"Whereas oil prices fluctuate with world events," he continued. "We see quite large swings in oil prices. I think the consensus with the fortune tellers is that the oil prices are going to rise quite significantly in the future and oil prices will take natural gas prices with it."

Overall, coal mining accounts for 8 percent of Alaska's mining revenue, according to the 1995 Division of Geological and Geophysical Survey report on the state's mineral industry.

UCM is the only producing commercial coal mine in Alaska. Two open-pit mines, Poker Flats and Gold Run, located just east of Healy, produce about 1.5 million tons of subbituminous coal annually.

In 1995, a record 1.64 million tons were produced. Of that, 919,429 tons were shipped through the Port of Seward by Suneel Alaska Corp. to Korea. The remaining 720,571 tons fueled six Interior power plants, which together generated 155 megawatts of electricity. Usibelli, which employs 125 people, has 18,000 acres in state coal leases with more than 150 million tons of identified reserves.

UCM is also gearing up to meet the coal demands of the Healy Clean Coal Project. The project is a coal-generated power plant designed to produce 50 megawatts of electric power for Golden Valley Electric Association. Thirty-five megawatts will power the huge Fort Knox Gold Mine northeast of Fairbanks.

Construction on HCCP began in 1995. The facility is scheduled to go online for testing in 1998 and will begin commercial production in 1999. It will use about 300,000 tons of coal annually. Usibelli doesn't expect to add...