Desert Rock Is Still A 'Go' - Awaiting EPA To Establish Standards for 'Greenhouse Gas Emissions'
By Kathy Helms
WINDOW ROCK – The proposed Desert Rock coal-fired power plant may not be getting off the ground as quickly as the Navajo Nation had hoped in today's pro-nuclear, anti-coal political climate, but it is still moving forward, despite rumors to the contrary, according to Steven Begay, general manager of Dine Power Authority.
Elouise Brown, president of Dooda (No) Desert Rock, sent a letter Monday to Navajo Nation President Joe Shirley Jr., stating she had heard a rumor from a source inside DPA that Sithe Global Power, co-developer of the plant along with DPA, had withdrawn its support and sponsorship of the proposed 1,500 megawatt plant.
Brown challenged the president to “run the rumor down for yourself” and tell the Navajo people whether it is true. She said she would take the president's silence “as an admission of truth.”
George Hardeen, communications director for the Office of the President/Vice President, said, “If Ms. Brown is not starting rumors she’s perpetuating them, beginning with Dooda’s allegation that the DPA had killed and skinned a Navajo sheepdog and drowned some livestock, which never occurred, but which Ms. Brown never clarified.
“She has cultivated a reputation as a ranting political flamethrower with little credibility. I’m surprised that the Gallup Independent is using this nonsense as the basis of a story rather than checking out the rumor itself and then discarding it when it doesn’t check out. That’s what a pro would do,” he said.
Begay originally was scheduled to report to the Resources Committee on Feb. 8, but discussion on a legislation took up two hours of the morning and he had to leave for Phoenix, before giving the report, to meet with U.S. Environmental Protection Agency and others involved in the permitting process. He was rescheduled to present on Feb. 11 but was unable to make it back in time.
“I think we're to the point where things are clear what we need to do going forward, and we need to work on some things to get the air permit back,” Begay said Monday.
EPA filed a motion last April with its Environmental Appeals Board for a voluntary remand of the air permit issued in July 2008. President Shirley said at the time that it was not the change he had hoped for from the Obama administration.
“This isn’t just about energy. This is about sovereignty. This is about saving self. This is about the Navajo Nation regaining its independence by developing the financial wherewithal to take care of its own problems,” Shirley said, adding that Desert Rock, which will bring more than $50 million annually to Navajo, is the Nation’s best hope to break the cycle of dependency on the federal government.
Begay said DPA has started work again with the Bureau of Indian Affairs, U.S. Fish and Wildlife, and BHP Billiton on the Environmental Impact Statement and the biological assessment. “We're in informal consultation with the federal agencies to do that. Things are still moving forward.”
Dirk Straussfeld, executive vice president of Sithe Global, said Tuesday that Sithe is in “very active discussions” with government agencies and non-governmental organizations about the project.
“We had a meeting and we had a follow-up discussion with the same agencies and these agencies are clearly moving forward. To my knowledge, we have not abandoned the project. We have so much effort in it and so much money, we would not just walk,” he said.
Navajo was handed a setback last March when the record of decision on the Navajo Transmission Project was remanded. Approvals of the project were based on environmental studies completed in 1997, before Desert Rock was part of the picture.
“I think once we get a little movement on the air permit and the EIS -- the transmission is also a part of the Desert Rock project -- we'll address the transmission as well. We might have to spend another two years on federal processes for the permitting, which is just another prolonged process that we have to work through, but I think things are a lot clearer now. We know what to work on.
“It's kind of hard to work on CO2 when it's a global issue,” Begay said. Developers had applied for funding from the U.S. Department of Energy for a carbon capture/sequestration project at Desert Rock, but it was not funded. However, Begay said they might try another funding request in round four.
“It's a good project. We need to continue. Coal is already being used for almost half of the electricity in the United States. It's a struggle to try to get federal support and to continue the federal processes, but we're not giving up,” he said.
In addition to environmental concerns, Begay said one also has to look at economics. “With Navajo unemployment at 50 percent and a third of the homes don't have electricity or running water, we're really like a Third World country in the United States. We need to figure out a way to keep moving forward.
“There are still coal projects that are being built,” he said, one in Illinois and another in Colorado. “They don't have as good of an emissions performance as Desert Rock, but they're being built. We're being held to a higher standard than a lot of permitted plants. We're willing to operate at a higher standard. I think Desert Rock can meet those standards,” he said.
Independent reporter Karen Francis contributed to this story.
LACK OF STANDARDS CREATES DELAYS FOR COAL PROJECTS
By Kathy Helms
WINDOW ROCK – The answer is NO. Sithe Global Power LLC has not canceled the Desert Rock power plant on the Navajo Nation or the River Hill coal-waste plant in Karthaus, Pa.
But as developers wait on the U.S. Environmental Protection Agency to establish standards for greenhouse gas emissions for stationary sources, trying to get a coal project off the ground these days is a whole lot like trying to open a bar without knowing whether you have a liquor license, according to some.
This week, the Independent received reports that the 1,500 megawatt Desert Rock project, now estimated at $4 billion, was on its death bed and that the $600 million waste-coal plant being developed in Clearfield County, Pa., by River Hill Power Co. – a wholly owned subsidiary of Sithe – had been canceled due to financing difficulties.
Dirk Straussfeld, Sithe executive vice president, said Thursday that the River Hill project currently is being delayed. “We have not canceled the project. We are in the process of determining how to move the development forward because of the same considerations we have with Desert Rock – coal and permitting in this environment, as well as selling the power from the coal plant.”
Tom DeLeo, Sithe chief operating officer, said the company is “evaluating options” because of the economics of the 300-megawatt River Hill project.
“Given where the costs are today, we're taking a very close look, and we're in a position where there's not a great deal of activity on the project, but it's not being abandoned; it's not being canceled. And certainly not Desert Rock. It's a great project and we're continuing to work with the Navajo Nation on that,” DeLeo said. The 750-megawatt Toquop plant in southeast Nevada is still alive as well.
“I think one of the biggest issues is with the recession. We have a temporary reduction in load. Without being able to sell the power, we have a problem,” Straussfeld said.
The River Hill project, which has the support of the governor, would use 70 percent waste-coal blended with 30 percent market-based coal to fuel the plant. According to the company, it would remove over 100 years of waste left by previous mining operations. Straussfeld added that burning the waste coal would get rid of old coal piles that create a lot of groundwater problems.
But a timeline for construction and completion of either project is anyone's guess. “It's hard to give a timeline because we have to take in all the factors,” DeLeo said, “and if the factors were there to go full-speed ahead, we would be doing it right now.”
Eight senators – including Sherrod Brown of Ohio, Jay Rockefeller and Robert Byrd of West Virginia, and Max Baucus of Montana – sent a letter Feb. 19 to EPA Administrator Lisa Jackson expressing “serious economic and energy security concerns” relating to the potential regulation of greenhouse gases, or GHGs, from stationary sources under the Clean Air Act.
Large electric generators using domestically produced coal and natural gas are uncertain about potential “Best Available Control Technology standards for carbon dioxide, they said. “What does EPA expect coal and natural gas operators to do if there is no standard?”
Jackson responded Feb. 22, saying that she expects to take action by April to ensure that no stationary source will be required to get a Clean Air Act permit to cover its greenhouse gas emissions in calendar year 2010. Instead, “I expect that EPA will phase-in permit requirements and regulation of greenhouse gases for large stationary sources beginning in calendar year 2011.”
As a developer, Straussfeld said, “I think what's important is the permitting environment is very unclear. With EPA or Congress essentially proposing legislation that nobody knows how it looks, it makes it hard for a developer to develop a project, but also makes it hard for a utility to buy the electricity because they don't know how much the CO2 (carbon dioxide) credits are going to cost.
“For them it's very hard to make a decision because they don't know if this is the best option for their portfolio. What the developer needs is certainty for the permitting and policy environment. Then you can make a decision and find the best option.”
He said EPA initially planned to regulate CO2 March 30. “This creates at least another year of limbo for the developer because we don't know what's going to happen. So this, again, prohibits investment and job creation,” he added.
Carbon dioxide would have to be addressed in the PSD, or prevention of significant deterioration permit. But that's going to be challenging, Straussfeld said, because nobody really would know how to address it in the PSD permit until the final rules are out.
The senators said the 2007 Supreme Court decision in “Massachusetts vs. EPA” determined that greenhouse gases may endanger public health and welfare. The “endangerment finding,” as it is known, is the first step in the rulemaking process for regulating greenhouse gas emissions from new motor vehicles.
While the senators said they support moving forward with a single national standard for that purpose, they are concerned about possible impacts on American workers and businesses as EPA moves to implement regulations to curtail GHG pollution from stationary sources.
There are legislative efforts in the House and Senate seeking to disallow further EPA action based on the endangerment finding, the senators said.
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