Port kick-starts Jonesville coal plan

May 6, 2005

DAWN DE BUSK /Frontiersman reporter

SUTTON - Up to 2 million tons of coal left over from previous Jonesville Mine operations could be trucked to Port MacKenzie for exportation as early as this fall, according to Brooks Potter, president of Knoll Acres LLC, the company proposing the project.

Knoll Acres has jumped feet-first into a project the port's deep-draft dock is making economically viable. So far, the company has purchased a lease, assumed the financial responsibility of the previous lease-holder, applied for a coal-mining permit and attended public meetings.

Potter would not disclose who would be buying the exported coal.

Representatives from the company - including Potter - discussed their business plans with Sutton Community Council members and residents during an April 12 meeting.

Everyone at the meeting strolled up to Jonesville Mine, where Knoll Acres' personnel reviewed their overall plans on-site, pointing out where the coal plant would be built and where the initial mining would start, among other details. The company would truck out 200 tons a day.

"No one found any major objections to the project," said Mat-Su Borough Assembly Member Lynne Woods, who formerly served on the Sutton Community Council.

Jonesville Mine, located in north Sutton at the end of Jonesville Road, operated full force in the 1940s, '50s and '60s. The 100 acres of rolling hills in the area were formed by mining projects.

Between 1 or 2 million tons of the carboniferous "rock" has been gathering dust in a rejection pile at the coal mine for 40 years or more.

The economic environment proves inviting, with higher coal prices. New technology that converts low-grade to higher-grade coal through a drying process makes a market for reject coal more promising. .

Woods had given Brooks a heads-up that Sutton residents are sensitive to the issue of coal extraction.

"We're sensitive because we have a comprehensive plan that identifies resources in our community," Woods said. "I discovered language in their permit application that there were no land-use plans developed in the area - and that's not true. We acknowledge that we have a coal resource, but we don't give a blanket mandate to what goes on there."

The council recommended that top concerns be addressed, such as improving the condition of Jonesville Road, reducing the speed of coal-hauling trucks and promoting local hire.

"If the trucks come rattling down the road with the Jake Brake at 11 p.m., that wouldn't be nice. The community wants to keep their quiet time," council member Dan Dryden said.

Residents also expressed concern over potential round-the-clock noise.

"We made it clear that we value a rural lifestyle. We understand the hours of summer construction can be pretty long, but we asked them to make considerations for people living there," Woods said. "I live on Jonesville Road. I'm not just a borough representative. I'm a resident."

The Surface Mining Control and Reclamation Act governs the activities in which Knoll Acres plans to engage. However, agreeing to upgrade the road or respect quiet hours remains a decision of the company, something it would do as "a friendly neighbor."

Knoll Acres already applied for the required permits, which have passed through the public-comment period and are now in the hands of the Department of Natural Resources. The application process will address potential environmental impact as well as public health and safety.

Bruce Buzby, coal regulatory program manager with the Division of Mining, Land & Water, is reviewing the permit application. Although Knoll Acres owns the lease, Sutton Partnership will act as operator. Knoll Acres bought the lease from Nerox Power Systems Inc.

In June 2004, Knoll Acres applied for a lease renewal and a permit transfer. DNR reviewed the paperwork and began the month-long, once-a-week public-notice advertisements, which ended March 2. The public-comment period closed April 1.

After DNR received a request to hold a hearing and an informal conference in Sutton, the public-comment deadline was moved forward to April 22.

Another 30-day public-comment period will be provided once DNR makes its decision, according to Buzby.

If Knoll Acres gains the permit, the company plans to truck coal down to Port MacKenzie, using the conveyer system and deep-water dock to load their product on ships.

"It's less costly to truck coal from Sutton to Port MacKenzie than it is to rail it from Healy to Seward," said Marc Van Dongen, Port MacKenzie's manager/engineer.

Also, slight modifications would be made to the conveyer system currently used by NPI to load wood chips onto ships.

Potter has made several trips to the Valley, speaking at the Sutton Community Council and touring the dock at Port MacKenzie.

"I am intimately familiar with the deep-water port there," he said, adding that he visited the Mat-Su Borough about two weeks ago. The coal operations and the wood-chip export business will schedule ships at alternate dates, Potter said.

According to Potter, Ron Arvin runs Knoll Acres' local operation and acts as the Alaska liaison for the company, which is headquartered in Boise, Idaho. Even though the company is situated in the Lower 48, Potter plans to honor the Sutton Community Council's request, encouraging the company to hire its labor force locally.

"It's not going to be a gigantic operation. It'll be fairly small at first, but we'll certainly be hiring local people," Potter said.

The proposed project, if permits are OK'd by DNR, would be a long-term investment, according to Potter.

"It's our view that natural resources in general have very volatile markets, very cyclical," he said. "Right now, coal is strong. All the energy markets are very strong."

The company is preparing for its possible future operations at Jonesville Coal Mine.

"Knoll Acres has expended over a half million dollars to clear outstanding liens, judgments and related clouds on title asserted by various parties that were owned money by NPSI," according to a letter to Sutton Community Council member Barbara Leppanen from the law offices of Birch, Horton, Bittner and Cherot.

"(This) shows their commitment," said Dryden, who admits he was skeptical at first because of past business deals at the old coal mine that never panned out. "They're not going to walk away."