|By Ngoc Nguyen
New America Media
Mar 23, 2010
When Navajo activist Anna Frazier heard the news last December, she immediately understood that the seemingly small act was a big deal.
For the first time, the Navajo tribal government would open to the public its negotiations with Peabody Energy over its royalty rates for coal extracted at Black Mesa’s Kayenta mine. Instead of rubber-stamping another 10-year lease with Peabody, there would be open discussion of the lease agreement that brings millions of dollars to the Navajo Nation and earns many more millions for Peabody, the largest coal mining company in the world.
Pressure from community members like Frazier induced the Navajo government to negotiate the lease in public. And that reflects a growing environmental activism among tribal members, who are asking more questions about Peabody and their nation’s reliance on coal. They also have stepped up their organizing. The proposed public hearings on the coal lease is the latest in a series of victories won by Navajo citizens over the last few years. It demonstrates a steady chipping away at the authority of their tribal government and greater participation by citizens as political decision-makers, especially on the contentious issue of transitioning away from a coal-based economy.
Frazier, a silver-haired, plain-speaking woman, is a coordinator with Dine CARE (Citizens Against Ruining our Environment), a Navajo environmental organization. She has spent a lifetime protesting against uranium and coal industries that have ravaged the land and sickened people. Although the Navajo economy is heavily dependent on coal, coal profits have not enriched the lives of regular Navajos, in part because coal-mining leases renegotiated in the 1980s capped royalty rates way below market value.
That is one reason tribal activists were determined to renegotiate the coal royalty rate through public debate. The Navajo Nation and Peabody renegotiate the coal royalty rate only once every decade, and this time around, Frazier says, community members want to have their say. The tribal council says it will make a decision on the lease in April.
“Our Navajo people didn’t negotiate because we didn’t know anything about finances,” Frazier said, “but today we do. Our people are educated and know the value of the dollar. It really needs to be put back on the table.
“We’re asking that [the agreement] be publicized, so all Navajo and Hopi can see exactly what the Navajo tribe is negotiating,” said Frazier.
The decision has raised eyebrows. Andy Bessler, southwest coordinator for the Sierra Club based in Flagstaff, Ariz., says the move is significant because it shows tribal members are demanding a new level of transparency in the tribe’s relationship with Peabody.
“The central government plays a role, but these are people’s homes, and they’ve been really left out of the discussion,” Bessler said. “We need to hear from them. What are the details here, what are the royalty rates, what are the benefits and costs?”
The coal lies beneath Black Mesa, in northeastern Arizona, part of the sacred ancestral land of both the Navajo and Hopi. Jointly owned by both tribes, the coal found there is highly prized for its low sulfur and high BTU. But Frazier and other tribal members say regular Navajos and Hopi have not benefited from sales of Black Mesa coal. The royalties the Navajo Nation receives from Peabody are now capped at 12.5 percent of the market price of coal. Peabody earned $6 billion in revenues last year.
Roger Clark, air and energy program director with conservation group Grand Canyon Trust, says the royalty figure needs to be translated into price per ton. The 8 million tons of coal needed to power the Navajo Generating Station in Page, Ariz. nets the Navajo Nation $24 million in annual revenue, or $3 per ton, according to Clark. Meanwhile, coal sells on the global market for much more – anywhere between $40 and $100 per ton, he says.
“Basically, the tribes were given below-market value all the time, and basically expected to accept it because they were being held economic hostage,” Clark said.
Peabody spokesperson Beth Sutton says that the company’s arrangement with the Navajo Nation is fair. “The lease agreements with the Navajo Nation and the Hopi Tribe are among the most lucrative in the industry, generating significant annual economic benefits through royalties, bonuses, NTUA payments and other fees,” said Sutton, in an email response to a request for comment. “The 12.5 percent royalty rate is the standard federal royalty rate, the rate the Navajo charges to other coal companies, and a rate the Navajo has agreed to on multiple occasions. The agreements also include bonus payments.”
Those payments include a $3.5 million bonus, a one-time payment of about $1.5 million, and $250,000 a year in scholarships for Navajo youth through 2017.
In a statement, George Arthur, chairman of the resources committee of the Navajo Nation Council, argues that the tribe should retain the royalty rate as it is “and not to take into consideration the closed mine.”
Operations at the Black Mesa mine halted after the closure of the Mohave coal-fired power plant in Laughlin, Nev., in 2005. (The Kayenta mine remains open.) “In essence,” he said, “we have gained although the rate stayed the same.”
But the status quo is starting to crumble under activist pressure. In another recent victory for tribal environmental and community groups, a federal judge earlier this year denied a crucial permit that would have allowed Peabody to re-open and expand mining operations at the Black Mesa mine – one of two mines in the Black Mesa region. The judge denied the permit because Peabody failed to conduct an environmental impact assessment and include public participation.
Now tribal activists are turning their attention to the Navajo Generating Station. The U.S. Environmental Protection Agency is weighing whether to impose tougher air pollution controls on the plant, which would cost $1 billion, according to a Hopi press release. About two dozen tribal environmentalists and their allies met privately with EPA Region IX Head Jared Blumenfeld on March 2 in San Francisco to lobby for the pollution retrofits.
Frazier was among the tribal activists. She spoke about the harm to her people from coal mining and coal-fired power plants. “It’s cost our people, it has cost our lives and land and we’re losing water from [mining]. We have to think about the future of our people,” she said, during a phone interview. Unlike her tribal government, which has long relied on coal revenue to prop up its economy, Frazier says she wants to see an end to coal royalties one day.
So does Wahleah Johns, who traces her Navajo roots to Black Mesa. Johns says the costs of the coal economy on her people and the land far outweigh the monetary gains. She says the coal industry has devastated tribal communities by contaminating and depleting waterways and springs, littering the land with waste sites, pushing people off their land, and jeopardizing the health of tribal communities.
Johns heads the Black Mesa Water Coalition, one of the groups that urged tribal leaders to publicize the agreement in the community and ensure that lease terms benefit all Navajos.
Despite the Navajo Nation Council directive, no public hearings have been held on the reservation so far. But, that hasn’t stopped tribal leaders like Johns from gearing up.
Black Mesa Water Coalition and other grassroots groups organized a one-day training on March 13 to inform community members about the toll of coal mining and power plants on land, water, air and human health, and to come up with alternative ways to grow the economy.
“The goal is to diversify our economies and create more jobs than what is currently in our communities,” Johns said. “And this has to be guided by the local community members from Black Mesa who are supported with the right tools to make decisions that don’t have to sacrifice our Mother Earth and environment for survival.”
Her group is pushing to install solar panels on abandoned mine lands. Johns envisions the community co-owning the concentrated solar power plant.
“There’s a lot of reclamation land. How can we add value back to land that has gone through mining…and how can we give back to the community?” asked Johns, who plans to present the proposal to tribal council members in April.
Bessler and Clark say tribal community members may not succeed in getting a higher coal royalty rate, but Navajo citizens can push for added value in the leases that ensure greater community benefits, such as the use of abandoned mine lands.
There’s an opportunity to do that now with the closure of the Black Mesa mine, Bessler says, because there are still many questions about what will happen to the infrastructure there. Should the mine revert back to the community? And what is owed to families who owned and lived on the land before Peabody began mining there? Bessler says the tribal governments are currently reviewing the issue of “lease holds,” without much public scrutiny or input.
Regardless of the outcome, Clark says, the push by young tribal leaders for more transparency and community involvement in tribal politics is “unprecedented” and will have ripple effects.
“Think of Navajo government as a young government, a few decades old. What we’re seeing now is the struggle for local control over central control, struggle between democracy and corporate control,” Clark said. “It’s potentially a whole new ballgame when it comes to energy in the future. If we’re successful, the future will look like people living in and around renewable [energy] development that doesn’t cause asthma…and cancer, where people have a good share of profits, better jobs and hope for the future.”
The Navajo Nation has taken a step in this direction. Last July, it became the first tribe in the nation to pass green jobs legislation. The Navajo Green Economy Act establishes a commission and fund to spur green jobs.
“The Navajo Nation is in the early stages of alternative energy development and approved legislation to develop a wind farm at Big Boquillas Ranch, as well as developing other sites at Gray Mountain, Ariz. and at Black Mesa, Ariz.,” said Arthur, in a statement.
Frazier knows change can happen, usually from the ground up. She says tribal leaders voted to ban uranium mining on the reservation after an uproar from community members about illness and contamination of the land and water.
Frazier’s group, Dine CARE, has traveled the reservation, sharing its vision of solar and wind projects. As with the uranium mining, Frazier says, people can push their tribal government to embrace a new way of thinking.
“There are a lot of possibilities but this is something new,” she said. “People are afraid to talk about it because it’s too new to them.”