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The flip side of NM’s energy revolution

Ivan Benally works to maintain mining equipemant at the Westmoreland Mine that supplies coal to the San Juan Gernerating Station. Photo shot Monday November 25, 2019. (Eddie Moore/ Albuquerque Journal)

Fourth in a five-part series: Behind the Boom

Copyright © 2019 Albuquerque Journal

WATERFLOW – For generations, mining coal was something to aspire to – a stable, lucrative job in the high desert of northwestern New Mexico.

So when Ivan Benally, 47, began work at the San Juan Mine nearly 20 years ago, he asked his new colleagues how long the job would last. It was a career he wanted to keep.

You could retire here, they said. Your kids could, too.

Now, the future is much more uncertain.

The San Juan Gernerating Station operating west of Farmington Monday November 25, 2019. (Eddie Moore/ Albuquerque Journal)

The San Juan Generating Station – adjacent to one of the largest underground coal mines in the world – is set for closure in 2022 as part of a plan submitted to state regulators by the Public Service Company of New Mexico.

Benally, a maintenance miner from Shiprock on the Navajo reservation, faces the prospect of finding another line of work.

He also worries about the potential devastation of tax revenue for the nearby school district, where his wife works, and a loss of employee donations to charitable groups. Closure of the plant and mine, he said, would damage the broader Navajo and Four Corners community.

“I think the people in Santa Fe,” Benally said in an interview, “they don’t see how hard of a life some of us live out here. There are a lot of people that are non-Natives, too, struggling to get by.”

The town of Farmington depends heavily on jobs at the San Juan Generating Staions and Westmoreland Mining. Photo shot Monday November 25, 2019. (Eddie Moore/ Albuquerque Journal)

In some ways, northwestern New Mexico is the flip side of the oil boom generating wealth in the opposite corner of the state. The collapse of natural gas prices and economic pressure on coal-fired energy generation is squeezing the communities of San Juan County.

The population of Farmington, for example, has eroded this decade, falling 3% between 2010 and 2018 to about 45,000 people. The number of students enrolled in the Central Consolidated School District – covering part of the Navajo Nation and other communities in far northwestern New Mexico – fell 2% over a recent three-year period, part of a long-term trend.

Hundreds of miles away, by contrast, the Permian Basin is rocketing forward with record-setting levels of oil production. The population in Carlsbad and Hobbs has exploded since 2010, with increases approaching 12%.

An energy revolution is transforming New Mexico, but the impact is much different in the badlands of San Juan County than in the oilfields of the Permian Basin.

Christina Aspaas, board secretary for Central Consolidated School District, talks about the importance of the San Juan Gernerating Station to their district. Photo shot Monday November 25, 2019. (Eddie Moore/ Albuquerque Journal)

‘We’re suffering’

A dozen years ago, San Juan County fueled New Mexico’s energy boom. It is home to one of the largest natural gas fields in the United States and prices were high.

Coal mines and power plants operated at greater capacity.

But the picture is much different now.

Erin Berry, center, is a fuel and water analyst at the San Juan Gernerating Station west of Farmington, talks about her job Monday November 25, 2019. (Eddie Moore/ Albuquerque Journal)

PNM – the largest electricity provider in New Mexico – has already shut down two of the four units at the San Juan Generating Station in Waterflow, just west of Farmington.

The company is seeking regulatory approval to shut down the rest of the plant in 2022, or about 30 years earlier than it had once planned. The plant sits next to San Juan Mine, which supplies the coal. Together, they now employ about 445 people.

Across the Arizona state line, meanwhile, the Navajo Generating Station shut down last month.

The disruption isn’t unique to the Four Corners. Coal-producing regions across the country are struggling.

Market forces, of course, are one factor. Low-cost natural gas, the rise of renewable energy and regulations to address climate change have made coal less attractive.

The changes hit San Juan County hard.

“There’s no question that we’re suffering an economic hardship,” said James Strickler, a Republican state representative and petroleum landman from Farmington. “It’s just a number of things that are hitting us at the same time, and that’s why we’ve lost 5,000 people in the community.”

‘We need help’

Christina Aspaas, an electrician from Ojo Amarillo, a small town near Farmington, said she fears her school district wouldn’t survive closure of the San Juan plant and mine.

Central Consolidated School District, where she serves as a school board member, covers 3,000 square miles, much of it Navajo or federal land.

More than 5,600 students attend schools in the district – a reduction of about 125 since 2017. Closure of the plant and mine, officials say, would accelerate the enrollment decline.

The San Juan power plant and mine are also critical sources of government revenue.

Without them, Aspaas said, she worries that some residents will renew a push to split up the district for financial reasons.

 Ivan Benally maintains mining equipment at the mine that supplies coal to the San Juan Generating Station near Farmington. He said he thinks he'd be lucky to find a job at half the pay if the mine closes. (Eddie Moore/Albuquerque Journal)

Ivan Benally maintains mining equipment at the mine that supplies coal to the San Juan Generating Station near Farmington. He said he thinks he’d be lucky to find a job at half the pay if the mine closes. (Eddie Moore/Albuquerque Journal)

One economic study suggested the San Juan Generating Station and mine provide about 49% of the school district’s property tax revenue – a potential challenge given the roughly $35 million in outstanding bond debt used to finance school improvements, according to legislative analysts.

State lawmakers this year called for a task force to issue recommendations addressing the district’s financial future.

In an interview in Shiprock, Aspaas said that without jobs provided by the plant and mine, she envisions many parents leaving the region altogether. They may take their children with them or send them to boarding schools, she said, separating Navajo youngsters from their community and culture.

“We carried the state,” Aspaas said, “and now that we need help – now that we need some kind of compassion – everybody has just turned their ears off.”

Dave Goldtooth, interim superintendent of the Central Consolidated School District, said the loss of family income if the plant and mine close would put extra stress on children.

“There will be an impact on students, of course – their social and emotional learning most especially,” Goldtooth said.

“Our children and communities,” he added, “have already been through historical traumatic events. With potential closure, it’s like we’re adding another traumatic event.

“Our students start behind, given the poverty, and social and rural conditions they experience. My concern is closure will only worsen this gap, putting them even farther behind.”

Saving the plant

Civic leaders say they are hopeful the San Juan plant can be saved.

A leading proposal involves working with a company, Enchant Energy, to equip the San Juan Generating Station with technology to capture carbon emissions.

It would have a cascading series of benefits, they say, saving jobs, reducing pollution and allowing the sale of carbon dioxide for use in oil extraction elsewhere.

Executives at PNM, on the other hand, contend the idea is risky and would be worse for customers.

Supporters, nonetheless, say the San Juan Generating Station is an ideal place to try carbon-capture technology on a broad scale – perhaps providing a template for coal-rich communities across the country.

Farmington Mayor Nate Duckett said the city is also working on other fronts to grow the economy. Rivers, lakes and badlands dot the region, making outdoor recreation a natural fit for visitors and tourists.

Durango, Colorado, just an hour’s drive north of Farmington, is perhaps a model for how to draw outdoor enthusiasts.

“We recognize we can’t rely solely on energy to be the only thing we offer in Farmington,” Duckett said.

Still, the region could be a fit for renewable energy.

PNM has proposed natural gas, and wind and solar power to replace electricity lost from closing the San Juan plant. Some renewable energy facilities would be stationed in northwestern New Mexico.

Gov. Michelle Lujan Grisham and state lawmakers also approved a landmark energy law this year that aims to provide $40 million in economic aid to the region. The money could be used for severance pay, job training or other help for displaced workers.

The funds are part of the Energy Transition Act, which calls for New Mexico to move to carbon-free energy generation within 25 years. It also gives PNM financial tools to absorb some of the transition costs.

‘The ultimate job’

Erin Berry, a 34-year-old fuel and water analyst at the San Juan Generating Station, said she wants to spend the rest of her career at the plant.

She supports the Energy Transition Act, she said, but isn’t optimistic about the prospect of being retrained for another job if the plant closes.

Like many people at the mine and plant, Berry said her salary supports multiple generations of her family.

A journeyman at the plant can make $42.36 an hour, or about $88,000 a year. Entry-level jobs can start at $62,000.

“If they want to retrain me for a job where I’m making a third of what I’m making,” Berry said, “that does me no good.

“I’m the primary breadwinner in my house. My father lives with me. My kids live with me. My husband lives with me. I’m the one that’s paying the bills.”

A handful of other workers who spoke to the Journal offered a similar assessment. They want to continue their careers at the plant or mine, and they don’t believe they can find similar work and pay at, say, a wind or solar farm.

Benally said he thinks he’d be lucky to find a job at half the salary he makes now if he were to change careers after 19 years.

“From where I grew up,” he sad, “it’s kind of like a goal to work at the mine – that was the ultimate job around here.”

Berry said she grew up in Farmington, earned a biology degree from Western Colorado University in Gunnison and came back to New Mexico amid the Great Recession.

She sent out 200 job applications after graduation and ended up working at a pet store.

Her family faced an uncertain future, she said, before she took an entry-level job at the San Juan plant six years ago, cleaning up and shoveling coal. Berry now tests water quality in the laboratory.

“I was about two months away from being homeless when I got hired on at PNM as a fuel handler,” Berry said. “It was the best thing that ever happened to me.”

Whether that option will be available for future generations is an open question.


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