The coal rights to a 62,000-acre tract in Alaska have been sold and retired, a victory for conservation groups that further limits the state's potential to derive income from its coal reserves.
Chugach Alaska Corp. sold the rights to the Bering River coal field to an investment fund managed by New Forests, an Australian firm specializing in carbon forestry and conservation finance, according to the Cordova (Alaska) Times. The sale was completed Dec. 19 for an undisclosed amount.
New Forests will transfer those rights to The Nature Conservancy, which will retire them. Chugach will then work with New Forests on a carbon offset project that includes this property, to create carbon credits to be traded on the California carbon market.
"The coal sale combined with a carbon offset project is an innovative transaction that provides a way for us to create long term, sustainable economic benefits for our Alaska Native shareholders and our region," Josie Hickel, Chugach's senior vice president for energy and resources, told S&P Global Market Intelligence. "Managing our lands responsibly means finding a balanced approach between economic development and taking care of our lands for generations to come."
"This comprehensive conservation effort addresses climate change [and] protects world-class wild salmon and bird habitat, and a subsistence and commercial fishing way of life that is comparable to none," Eyak Preservation Council founder Dune Lankard told the Times.
In 2016, Sen. Lisa Murkowski, R-Alaska, introduced legislation to require the U.S. Forest Service as well as other Department of the Interior agencies to work on a land exchange. Her spokeswoman, Nicole Daigle, told S&P Global Market Intelligence the bill would have helped resolve the Bering River issue and other land issues caused by the Exxon Valdez Trustees Council's purchase of lands on top of Chugach Alaska Corp. lands in Prince William Sound.
Murkowski intends to reintroduce similar legislation later this year to settle outstanding land issues in the region, Daigle said.
"Sen. Murkowski is pleased to see Alaskans working together to come to a mutually agreeable outcome, which seems like a good outcome that will provide economic benefits to Chugach Alaska shareholders," Daigle said. "Hopefully, this deal will convince the federal government to support other land exchanges in the region to benefit Alaska Native shareholders."
A 2011 report from the Forest Service estimated the Bering River tract had the potential to produce nearly 59 million tons of coal.
Alaska has an estimated 2.8 billion tons of recoverable coal reserves, according to the U.S. Energy Information Administration, but just one active mine that produced 1.2 million tons in 2015.