TSIIS TSO SIKAAD — Sam Woods stood on top of a hill pointing to the southern areas of the Navajo Mine complex.
"That's Area 5," said the mine's interim general manager. He was pointing at areas of Navajo Mine that haven't been excavated yet.
Woods is part of a team — Navajo Transitional Energy Company — that will lead the Navajo Nation's energy development. It was formed after the tribe purchased the Navajo recently put the Navajo Nation in the national spotlight after the tribe became the newest player in the coal industry. The Nation created NTEC to operate the Navajo Mine, which it purchased from BHP Billiton for a price of about $85 million.
Though the Navajo tribe may be one of the first tribal nations to own a coal mine, many question whether the tribe has acquired rights to a fuel source that has passed its peak and now is on it's way out as a fuel source for large power generation. In addition, the mine is the sole supplier of coal to nearby Four Corners Power Plant, and in order to meet U.S. Environmental Protection Agency mandates, the plant is scheduled to close three of five units, which would reduce coal demands by a third to about six million tons of coal a year. And the EPA is expected to propose additional rules to reduce emissions in the near future.
The future of coal isn't as bright as it was 50 years ago when Navajo Mine opened, but the acquisition could bring the Navajo Nation revenues totaling $1 billion through 2031.
Steve Gunderson, chair of the NTEC board, said the acquisition of the mine is an investment for the Navajo Nation, despite what critics may say.
"The purchase of Navajo mine is an excellent investment opportunity," he said, "(We bought the mine) at a very attractive price and as technology and human ingenuity searches (for) ways to find solutions (to use coal), we believe we will end up owning an asset that will be of great financial value to the Navajo Nation."
Woods said acquiring the mine is part of a larger goal which is protecting and managing natural resources.
"We have 42 billion tons of coal and there's got to be some way to figure out how we can protect and manage it," Woods said.
Woods, who formerly served as the energy advisor for Navajo Nation President Ben Shelly for two-and-a-half years, said that while working for the tribe only a handful of people understood natural resources regulations and opportunities as it pertained to energy development.
"We have $3.5 trillion of natural resources on the Navajo Nation," he said. Those resources include wind and solar power generation potential, rare metals, uranium, oil and gas, and coal. "That's what it comes down to. We have to learn how to manage our energy resources," Woods said.
Some critics have argued that the mine acquisition is an election year ploy for votes.
"It's not political," Wood said.
Gunderson added the board governing NTEC is comprised of professionals, which include a scientist from Livermore National Laboratories.
"This is extremely important because NTEC is not a political entity. At the first point of engagement ... we must behave like any other corporate entity," he said, "I think you'll find outside corporations do the same thing, they have people of personal different political alignments, but they focus on what's best for their employer."
The sale of the mine ensured about 400 people working there would have a job at least through 2031 and ensure the Navajo tribe continues to collect about $40 million in royalties a year. But the royalties are expected to decrease as Four Corners Power Plant phases out the three units.
Woods said NTEC has negotiated a coal sale agreement with Four Corners Power Plant and is now looking to continue building the new company.
"We have our office set up in Shiprock," Woods said. According to the way the laws were written creating NTEC, the offices have to be within the boundaries on the Navajo nation."
Currently, the company has three employees, Woods, a chief financial officer and an executive assistant, all of whom are contracted to serve on an interim basis as the company creates policies to bring on permanent employees.
Gunderson said mine employees should expect few, if any, changes.
"We do not foresee any material changes in the operations of the mine that would not have otherwise happened," he said in a phone interview, "We want to be sure the mine will continue to be managed in a professional manner."
He gave praise to BHP Billiton for successfully managing the mine for 50 years.
The sale agreement keeps BHP Billiton on board as manager of the mine until the end of 2016.
Gunderson added that nearby communities that have received support from BHP Billiton in the past, shouldn't be expecting any change either.
"Local communities that receive support, we don't expect ... any changes. If anything, we expect expanded or an enhanced level of communication with the local communities," he said.
Because the new company is an enterprise of the Navajo Nation, Gunderson said he wants to put forth more effort in creating good relations with the mine's nearby Navajo communities.
Another area NTEC will explore is renewable energy. According to he bylaws, NTEC has to invest a portion of its revenues into renewable energy.
Though exactly how the investment is going to implemented isn't yet clear. Gunderson said it's another opportunity for the Navajo Nation.
"One of the important things to note, if we do not get into energy business in a large way now, we will not have the opportunity to move into renewable energy in a very material way in the future," he said.
But aside from all the issues that come with the coal mine, one thing remains the primary focus of NTEC.
"Our immediate focus is to be a reliable supplier of coal to the Four Corners Power Plant, period," Gunderson said.