History & Background

Early development history of the Chuitna Coal Project is summarized as follows:

Development of the Chuitna Coal Project began in the late 1960's by Starkey Wilson, Richard Bass, and Herbert Hunt (the Bass, Hunt Wilson Group).  The Project underwent National Environmental Policy Act (NEPA) review in the 1980's and a Final Environmental Impact Statement (FEIS) was issued in the 1990. The hisorty of the project was summarized in the FEIS as follows:

"The presence of coal outcrops in the Beluga region of upper Cook Inlet has been known for decades. The area containing these outcrops was selected soon after statehood by the State of Alaska under the federal government’s mental health land grant entitlement. The five coal leases affected by the proposed project were issued by the State to the Bass, Hunt, Wilson Group between 1972 and 1978. Coal leases in the area have also been issued to other companies.

Throughout the 1970’s, further exploration occurred on the leases, including core drilling to define the reserves. In 1981, the Diamond Shamrock Chuitna Coal Joint Venture was formed to develop the project. The venture partners are Maxus Energy Corporation, a large integrated natural resources company, and the Lone Creek Coal Company. The operating arm of the joint venture is Diamond Alaska Coal Company of Anchorage, a subsidiary of Maxus Energy Corporation. The joint venture holds sublease agreements to the five leases (ADL nos. 36911, 36913, 36914, 37002, and 59502) which constitute the entire lease area.

Diamond Alaska has overseen an intensified drilling program and the completion of many engineering and economic studies, which included a detailed Preliminary Design Phase study. Environmental baseline studies were begun in 1982 and largely completed in 1984. Limited preconstruction monitoring has also begun. (EIS, 1990)

Nine drilling programs were conducted from 1969-1982 to identify and define the location, size and quality of coal deposits in and around the lease area. In all, subsurface data were collected from 542 borings, and three (3) distinct deposits were defined on the leases. They are labeled LMU-1, LMU-2 and LMU-3 (see Figure). LMU-1 is the proposed project mine area and contains estimated proven reserves 300 million tons."