The Navajo Generating Station.

Photographer: Bryan Schutmaat for Bloomberg Businessweek

The End of Coal Will Haunt the Navajo

The fossil fuel has been an environmental threat and economic necessity for Native American tribes in Arizona. What happens when it's gone?

Percy Deal, 67, lives in the same small, three-bedroom stone house he grew up in, situated in the remote Navajo village of Cactus Valley, Ariz. Like many homes in this part of the country, Deal’s lacks running water, so once a month, he drives his pickup truck 17 miles to a public pump, where he fills three 55-gallon drums to bring back home. On the living room wall, his father’s ceremonial feathers and sweat-stained cowboy hat hang over the couch next to a framed poem his father wrote, titled Endless. The second stanza reads: “Your heart and your roots tell a perpetual story of the love and harmony you and Mother Earth share.” His family has been on this land for 500 years.

Sixty miles north of Cactus Valley lies the Kayenta Mine, a 44,000-acre open pit whose sole customer is the Navajo Generating Station, 100 miles northwest in the town called Page. NGS is the country’s eighth-largest climate polluter, pumping out 16 million metric tons of carbon dioxide and hundreds of pounds of mercury and arsenic into the atmosphere each year. It’s also one of the area’s largest employers: Together with the mine, it’s responsible for 3,000 jobs, more than a third of them full-time.

Percy Deal at his home in Cactus Valley.
Photographer: Bryan Schutmaat for Bloomberg Businessweek

In February, NGS’s controlling shareholder, a public utility called Salt River Project, announced that it would shut down the power plant beginning at the end of this year, another casualty of the surge in cheap natural gas. Without the power plant to buy its coal, the mine will be forced to shut down, as well. Navajo leaders railed and called on the Trump administration for help; Percy Deal and environmentalists celebrated. “Our leaders are not talking about the impact on the health of these people, respiratory diseases as a result of the industry,” Deal says.

In 2014, the independent Clean Air Task Force estimated that emissions from NGS contribute to 16 premature deaths, 25 heart attacks, 300 asthma attacks, and 15 asthma emergency room visits each year, and that shutting down the plant would save $127 million in annual health-care costs, according to the task force’s assessment. That same year, the Environmental Protection Agency reached an agreement with NGS to cut its emissions of nitrogen oxide—the main pollutant linked to lung ailments, not to mention thick haze in 11 nearby national parks, including the Grand Canyon—by 80 percent over the next 16 years before shutting down permanently in 2044. “Back then, the economics projected that it would still be viable,” SRP media relations manager Scott Harelson demurs. “The analysis of utilities and the price of natural gas moving forward show that the price will continue to remain low, and that’s what ultimately caused SRP to make their decision.”

For years, every economic indicator has pointed to the eventual death of coal as a power source—but with no public announcement before this year that SRP would consider shutting down the plant before its 2044 deadline, the tribe had little reason to think they needed contingency plans. “They dropped the whole thing on top of us,” says Navajo Nation chairman Russell Begaye. Each salary derived from NGS probably supports 20 to 30 people, he says—and at $141,500, on average, it is seven times greater than the median salary on the reservation. Already the poverty rate among the Navajo is three and a half times the national mean. “If we knew five years ago that they were going to be shutting down, we would have been ready.” 

It’s unquestionable that closing NGS is the best possible outcome for the land the Navajo and their neighbors, the Hopi, have called home for more than 800 years. It’s also unquestionable that closing NGS presents an existential threat to both tribes. Once the work of winding down operations is said and done, “some will say, ‘I have no choice but to make a life off the reservation,’” says Hopi Chairman Herman Honanie. “That is very likely, and something that we, as parents and tribal leaders, especially for younger people, may have to really encourage.” After centuries of fighting against both men and laws, it’s market forces that have brought them to this breaking point. “I think we need to reach deep down inside ourselves and ask how we want to survive as a people,” he says.

The railway that ships the coal 100 miles from the Kayenta mine to NGS.
Photographer: Bryan Schutmaat for Bloomberg Businessweek

“You don’t see a direct effect from pollution. And I live here,” says Marie Justice, a truck driver at the Kayenta mine and local union president, who lives down the street from Navajo Generating Station. “I’ve lived here a long time. My parents lived here their entire lives. They didn’t have any lung issues that you think would be from pollution. I just don’t think you can prove it.”  

Justice grew up in nearby LeChee, a sparse village of 1,400, where her family raised sheep. They lived in a hogan, a traditional Navajo mud-and-wood structure, before building a single-story cinder-block ranch in the early 1960s. The home didn’t have running water and was first wired with electricity—through a program sponsored by NGS—in 2015. Thirty members of her extended family have been employed at either NGS or Kayenta, she says. She met her husband, Bill, a retired supervisor, at the mine, and her son now works at the power plant.

Marie Justice, in her childhood home in LeChee.
Photographer: Bryan Schutmaat for Bloomberg Businessweek

Talk with nearly anyone around the plant or the mine, and you’ll hear stories of families depending on them for far more than just their jobs. Kayenta operates the water pump Deal goes to for water, and in the winter, the mine also provides free coal at a public load-out station to all native residents. “It burns long and hot—much better than wood,” says Dwayne Blackrock, who lives on the reservation and whose father worked at the mine for 21 years. “Everyone out here relies on the mine. When they are gone, I am not sure what some people are going to do.” This dependence is due in no small part to actions taken by the federal government.

The Navajo and the Hopi may be allies in the fight to keep NGS operational, but they have a fraught history of land disputes dating back to the 19th century. In 1966, as a means of forcing the tribes to negotiate, the federal government enacted the Bennett Freeze, which prohibited development on 1.5 million acres of contested land. For the 35 years the Bennett Freeze was in effect, the tribes were prohibited from undertaking infrastructure improvements such as laying gas or water lines and paving roads—worse, residents were unable to perform necessary maintenance such as re-roofing a house. By 2001, when the freeze was finally lifted, more than 75 percent of homes in the disputed territory had become uninhabitable. Today an estimated 60 percent of homes in the area still don’t have electricity or phones, and one in three has incomplete indoor plumbing.

The federal government has been more than willing to step in and legislate in the past, but in this case, it has been unwilling to assist the tribes. In May, the Hopi and Navajo sent a joint letter to Secretary of the Interior Ryan Zinke asking the department to intervene on their behalf—a reasonable expectation, they thought, given the administration’s bellicose pro-coal rhetoric. “We have not received any commitment from them,” says Begaye, the Navajo chairman. “The government is not living up to its promises when it comes to supporting coal.” The Department of the Interior did not respond to multiple requests for comment.

The Navajo will retain ownership of the railroad after NGS shuts down.
Photographer: Bryan Schutmaat for Bloomberg Businessweek

On Oct. 9, however, EPA chief Scott Pruitt announced the Trump administration’s intention to roll back the Obama-era Clean Power Plan, which curbs emissions from coal power plants such as NGS. “The war on coal is over,” Pruitt said. But it may be too little too late for the Navajo’s economic breadwinner.

While Salt River Project owns the largest share of NGS, the U.S. Bureau of Reclamation, a division of the Department of Interior, also has a stake that entitles it to extract power for the Central Arizona Project, which pumps water from the Colorado River to parts of central and southern Arizona. (Others, including Arizona Public Service Company, NV Energy, and Tucson Electric Power, are also minority shareholders.)

Dwanye Blackrock gathers water from the public pump at the mine to bring to his parents’ farm.
Photographer: Bryan Schutmaat for Bloomberg Businessweek

David Palumbo, deputy commissioner of operations at the Bureau of Reclamation, told Bloomberg News it can’t just take over. “We don’t believe we have the current congressional authority to assume complete ownership of the plant,” he says. “Our authority lies in bringing power to CAP.” Helping SRP subsidize the price of coal to rates competitive with natural gas—a cost of $100 million per year—is also not an option. “We do not currently have that as part of our budget,” says Palumbo. “The authority to subsidize does not exist.” The federal government’s Indian trust responsibility, which obliges the U.S. to assist Native American tribes with economic development, doesn’t apply to jobs lost at NGS and the mine, Palumbo says, although he adds that the department will be accelerating efforts related to infrastructure development, including bringing broadband, electricity, and water to rural communities, after the closures.

This is Percy Deal’s main priority. “There is only one thing more powerful than money. That’s water,” he says. “The mine closing down is going to be a blessing to us. It’s going to be the beginning of a new era for us towards recovery, simply because we are going to get access to the water. Water is life. Without water, everything is at a standstill out here.” The plant uses more than 30,000 acre-feet per year for its cooling system, while the mine draws an additional 1,200 acre-feet per year, mainly for dust control. There’s no evidence to suggest that either has prevented water from reaching Deal’s hom. However, the water level of the Little Colorado River Plateau, which provides water to the northern region of the Navajo reservation, has dropped by 11.2 feet in the past 20 years.

SRP plans to pay the Navajo Nation $110 million over a period of 35 years to monitor the plant’s long-term environmental impact—less than 3 percent of what it would have paid the tribe for use of the land if the plant had remained operational. The tribe will also retain ownership of water pumps in Lake Powell, the direct water source for the plant’s cooling systems, as well as the railroad used to ship coal from the mine to the plant. To take those items off SRP’s hands, it will pay the Navajo an additional $18 million. 

The Navajo Nation recently allocated $21 million to serve water to 180 new homes, including Deal’s. But Begaye admits that reclaiming water rights won’t be easy. What the plant uses is owned by the state of Arizona—part of the 1922 Colorado River Compact, which divided water rights among seven states, not including any Native territories. “We still have to get permission from the state of Arizona to get us that water, which we know is something we will not get,” Begaye says. “We will negotiate as hard as we can with the state to bring that water back to our people.”

On the Crow Indian Reservation in Montana, the Absaloka coal mine accounts for 50 percent of the tribe’s nonfederal income. The mine opened in 1974 and employs 170 people, but revenue from the operation has dwindled in recent years because of coal’s decline, causing the tribal government to lay off 1,000 of its 1,300 employees. “This is the worst I’ve ever seen it—ever,” Crow Chief Executive Officer Paul Little Light told the New York Times in April, referring to poverty on the reservation.

“Many tribal economies are insufficiently diversified,” says Joe Kalt, co-director of the Harvard Project on American Indian Economic Development at Harvard University.  “With coal-reliant tribes like the Crow or the Navajo, you are obviously seeing consequences of not being diversified more directly. Part of the problem at NGS, too, is just the problem of coal in general. But this being part of the first generation of economic development, back in the ’60s, they put a lot of eggs in that single basket.”

SRP signed a 50-year lease with the Navajo in 1969; Peabody Energy Corp. signed agreements with both the Navajo and the Hopi in 1966 (the same year the Bennett Freeze was enacted). Together, the two companies pay the Navajo $35 million per year, which amounts to 30 percent of the tribe’s income. Peabody pays the Hopi $13 million annually—a full 85 percent of the tribe's yearly revenue. “The plant and mine hold up the economy of an entire region,” Begaye says, adding that he’s considering reducing hours and cutting retirement packages for Navajo government employees. “We are facing a crisis here.”

Graffiti spray-painted on the outskirts of the mine.
Photographer: Bryan Schutmaat for Bloomberg Businessweek

Begaye says the Navajo Nation will continue to operate the water station, and no-cost coal will still be available for heating, but residents will have to venture out to find it themselves. SRP offered to find jobs for NGS employees at its other facilities in Arizona, which include a coal power plant 260 miles from NGS and several gas plants and corporate buildings in the Phoenix metropolitan area, four hours away by car. Peabody, too, will offer priority consideration to Kayenta employees for jobs at other sites in the U.S. “Peabody believes NGS is an important engine for Arizona’s economy and growth and should continue operating well into the future,” the company told Bloomberg News. Peabody says it has exclusive rights to 200 million tons of coal in the area. If NGS shuts down, all that potential revenue remains in the ground.

SRP’s position is that the factors contributing to NGS’s closure were hardly unique or secret. “We have regular communications with the Navajo Nation. The subject of costs of other resources are part of those conversations,” says Harelson. “Natural gas prices dropping was not a mystery to anyone, including the Navajo Nation. But when was the tipping point for us? It’s difficult to say.” 

Gerald Clitso
Photographer: Bryan Schutmaat for Bloomberg Businessweek

The plant’s 50-year lease ends in 2019; the original agreement included an option to extend until 2044, which SRP chose not to exercise. A necessary two-year wind-down period explains its haste to close. In July, the Navajo and the Hopi successfully negotiated a two-year lease extension with SRP, which would allow the plant—and, by extension, the Kayenta mine—to remain operational through 2019. But because the federal government is technically a trustee of the land, it has to certify the agreement before the deal can go through. It has until Dec. 1 to do so. In the unlikely event it rejects the lease extension, the plant and mine will begin shutting down soon after Christmas. On Oct. 2, however, Peabody announced that potential investors have expressed interest in pursuing ownership of NGS, which may extend the life of the facilities.

Every morning for the past 40 years, Gerald Clitso, 59, has made the same drive from his home in the town of Kayenta to the mine, where he’s a machine operator. He has two grown children, both of whom he was able to put through college off the reservation. “I decided to work in the mine because of my family—to support them and give them a good life,” he says. “But now that opportunity is being taken away from others. There’s nothing else up here for jobs—nothing.”

Unlike some of his co-workers, Clitso doesn’t deny the environmental impact of the mine. “It’s a choice we’ve had to make,” Clitso says. “What am I supposed to do? Keep living in poverty and raise my kids in poverty? There will never be a day that I regret to say that I worked at the mine.”

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(Corrects the size of Peabody’s exclusive mining area in the 21st paragraph.)