Agrium/Homer Electric  “Blue Sky” Coal Project

 

PRESS RELEASE 

FOR IMMEDIATE RELEASE:                       FOR MORE INFORMATION:

March 13, 2008                                                 Bob Shavelson 907.299.3277

 

 Inletkeeper Cites High Coal Costs in Agrium Decision

Investors, utilities, consumers learning the true costs of coal

 

 HOMER, AK:  In response to today’s announcement by Agrium that it will not pursue a coal-gasification unit to re-start its fertilizer facility in Nikiski, Alaska (see www.agrium.com/investor_information/news/5784_8641.jsp), Cook Inletkeeper Executive Director Bob Shavelson made the following statement: 

 

“The fertilizer facility has been an economic mainstay on the Kenai Peninsula for many years, and Agrium’s decision today to forego the coal-gasification option to re-start the plant will have significant ramifications for the local community.  With that said, everyone knew this closure would one day materialize, because the facility relied on a non-renewable feedstock.  Our thoughts are with the workers and families who have relied on the fertilizer plant for their jobs and their livelihoods, and we encourage federal, state and local governments to work with forward-looking corporations and investors to promote more sustainable economic opportunities on the Kenai Peninsula.  Cook Inlet possesses world-class renewable energy resources, including massive tides, strong winds and prolific geothermal sources, and Alaska is well-positioned to lead global markets in creating the jobs and technologies needed to ensure a strong Cook Inlet economy for years to come.  Importantly, Agrium’s decision today highlights the true costs of coal development and use, and from climate change and habitat destruction, to mercury contamination and human health impacts, coal is the most expensive fuel on earth.  In light of these concerns, investors, utilities and consumers are increasingly aware that coal is neither cheap nor clean.”                                            # # #

 

Since its construction in the late 1960’s, the ammonia and fertilizer plant in Nikiski has played a substantial role in the Kenai Peninsula economy.  The facility historically relied on relatively cheap and abundant natural gas for power and as feedstock, however, in September 2007, tightening natural gas supplies forced the plant to close. In an effort to re-start the facility, facility owner Agrium has turned to a coal gasification project using the Fischer-Tropsch process to provide the feedstock to make its products.  To power the facility, the Homer Electric Association has partnered with Agrium in to build a 200 megawatt coal-fired power plant, and coal would tentatively be shipped down from the Usibelli coal mine in Healy on the Alaska Railroad (unless the Chuitna coal mine comes on line, then supplies could change).  Because the project cannot attract traditional financing on its own right, the Alaska Legislature in late 2006 granted the Alaska Railroad Corporation the authority to issue tax-free bonds to build and operate the facility, which would include a rail spur to Port MacKenzie across from Anchorage to ship the coal.

Applicant:       Agrium (see http://www.gasification.org/Docs/2006_Papers/22JOHN-Paper.pdf), Homer Electric Association.