People working on studies of in state gas demand for the pipeline seem to assume that coal fired power plants in Interior Alaska, Usibelli's prime market, will switch over to gas. But the coal company, which has produced at Healy for 65 years, thinks it will easily be able to beat gas on price when it comes to power generation.
Mr Steve Denton VP for business development at Usibelli believes that his company could supply coal to a new mine mouth coal fired power plant, such as one proposed by Usibelli at Emma Creek, for USD 1.50 to USD 2 per million British thermal units, which could be one third to half the cost that gas brought to Interior Alaska from the North Slope is likely to cost.
Mr Bill Brophy VP of customer relations at Usibelli said that coal shipped from the mine to the Fairbanks area power plants costs more because of the Alaska railroad charges. Still, coal will be competitive compared with gas from the Slope.
There are huge coal resources in the Interior and south central parts of the state that could help meet the state's long term power needs. There is an operating coal mine in Healy and a new mine planned at Beluga, 50 miles west of Anchorage, by the Texas based Bass Hunt group.
Usibelli owns other coal deposits in Alaska. In 1997, it purchased coal leases at Wishbone Hill, in the Matanuska-Susitna Borough, for possible future mining. The Wishbone Hill leases cover 8,000 acres that contain about 14 million tonnes of coal. The coal is of a higher bituminous grade, where Usibelli's coal at its Healy mine is a lower grade sub bituminous coal. In addition to Usibelli's resources, there are estimated coal resources of more than 1 billion tonnes of sub bituminous coal in the undeveloped Beluga deposits.
Usibelli mines about 1.2 million to 1.5 million tonnes of coal yearly, and employs about 95 to 100 people. The mine supplies power plants Fort Wainwright and Eielson Air Force Base, the Clear defense radar facility, the University of Alaska Fairbanks and the coal power plant Aurora Energy, all of which are in or near Fairbanks.
