Alaska, City of Seward, Harbor News, Maritime

Settlement reached in 6-year Seward coal case

Crimson Monarch as it receives 68,400 metric tons of coal from Usibelli mine in Healy, coming off the conveyor belt. Heidi Zemach photo.
Crimson Monarch as it receives 68,400 metric tons of coal from Usibelli mine in Healy, coming off Aurora Energy’s conveyor belt and ship loader. Heidi Zemach photo.

By Heidi Zemach for SCN-

Aurora Energy Services LLC and Usibelli Coal finally reached a settlement December 8th in U.S. District Court for the State of Alaska with the Alaska Community Action on Toxics and the Sierra Club’s Alaska Chapter over a six-year old legal case concerning the discharge of coal from the Seward coal facility into Resurrection Bay.

Under the terms of a Consent Decree, Aurora filed an application last January for an individual permit from Alaska Department of Environmental Conservation (ADEC) that allows the company to discharge “incidental” (accidental) coal from its coal conveyor and ship loader during the loading process, as long as it follows certain conditions, outlined in the permit.

ADEC issued a first draft of that permit for public review last summer, and held a public hearing in Seward in August. The state agency recently issued a revised draft permit, with some changes, which is now open for public review and comment. It must also go to the Environmental Protection Agency for a review, to make sure it meets Clean Water Act standards.

By entering the Consent Decree, Usibelli and Aurora do not admit to any of the violations set forth in the complaint. The settlement also prevents further civil action against the Alaska coal company and Aurora, its subsidiary, over the matter of coal discharges into the bay.

The companies submitted a permit application from ADEC on January 27th, 2015. With the latest settlement, they also agreed to install a coal discharge mitigation project at the Seward facility. By December 31st, 2016, they must have completed installing skirting on the west side of the BC-14 conveyor and on the south side of the cross-over conveyor at the ship loader and associated conveyor system.  The Defendants also agreed to pay $363,500 in legal fees, costs, and expert witness fees to Trustees of Alaska, the legal firm working on behalf of ACAT and the Sierra Club.  They will also contribute $10,000 to Kachemak Heritage Land Trust for land or wetland conservation projects in the Resurrection Bay watershed, designed to protect the water quality in the bay.

“This is a big win for the people of the Seward community! However, our work is not done,” said Pamela Miller, the executive director of Alaska Community Action on Toxics. “The permitting process for the facility is still ongoing, and we are committed to working with state and federal regulators to make sure the final permit includes meaningful protections for Resurrection Bay and the Seward community.”  The lawsuit does not address fugitive coal dust blowing from the coal trains or stockpiles, which they feel still needs to be minimized further, Miller added.


ACAT takes no pleasure in filing lawsuits, she said, but uses them only as a last resort, after all other attempts to protect the environment have failed. ACAT got involved in the Seward issue when local community members called upon that group for help, she said. Protecting the bay and air quality and health of the community are what drives her group, and it remains important to Seward for the public health, and thriving visitor industry.

“We’re just happy that the issue has been finally resolved,” said Ricky Junquera, the press secretary for the Sierra Club for the region. “This is a good step forward for the people in Seward, and in the area. It’s been an ongoing conversation for the last five years.” The coal has accumulated over a long period of time, and there hasn’t been an in-depth study of the effects on marine life in the bay, he noted. “But last year, in the company’s own study, they took a 12- inch deep (core) sample, and coal was found down to the bottom of the core sample. That was just what the sample picked up, so you can only imagine how much more there is, and deeper it goes from decades of coal dumping into the bay.”

AES' coal belt enclosure from below, photo courtesy of Rob Brown, Usibelli Coal.
AES’ coal belt enclosure from below, photo courtesy of Rob Brown, Usibelli Coal.

After the lawsuit was filed in December 2009, the coal facility took some initial steps to address its discharges, including installing a drip pan beneath a portion of the conveyor where coal would otherwise spill into the Bay. In response to the lawsuit, Aurora also applied to Alaska regulators in January 2015 for an individual permit regulating the coal spilled from the facility.

“Over the past few years ARRC has invested well over a million dollars in environmental improvements to our facility in Seward and we continue to be committed to environmental stewardship in all of our operations,” said Alaska Railroad President and Chief Executive Director Bill O’ Leary. “We are happy to have reached a mutually acceptable agreement to settle this case and look forward to future export operations in Seward with the anticipated new permit from ADEC.”

In mid-June, the U.S. Supreme Court decided not to appeal a ruling by the 9th Circuit Court of Appeals that found that coal falling into the bay was not allowable under the company’s general storm-water discharge permit under the Clean Water Act. That ruling overturned a 2013 decision in Alaska District Court decision generally favoring AES’ position that the general waste-water discharge permit covered all of its operations.

“I don’t really have a lot to say about it other than the parties have reached a settlement agreement, and it’ nice to put the issue behind us,” said Loreli Simon, spokesperson for Aurora Energy Services.  She said the company had been operating under the general permit that was issued to them by the federal and state governments. During the court case, the government changed its mind and said the facility needs a different permit, and now they are going through the process required to obtain the new permit, she said: “So when the plaintiffs are claiming some big victory that now we are finally operating under the law, I feel it’s a bit disingenuous because we have always been operating under the law.”

At the height of its coal-exporting, in 2011-2012, Aurora had 20 employees working in Seward, Loreli said. But in recent months, the most dramatic layoffs occurred as they had to put the facility in layoff status. Now only three people are working there through the end of the year, but none are working full time. Loreli could not predict what would happen for employment in the New Year, but said Aurora is “actively pursuing” export coal contracts for 2016.