Posts Tagged 'Hopi and Peabody Coal'

Nuvamsa letter to Hopi Tribal Council and PowerPoint to “Water is Life” forum

Peabody Coal Leases PowerPoint / Nov 12, 2011 / Click to download (24 pages)

                                                                                               November 14, 2011

Honorable Hopi Tribal Council Members:

Enclosed is a copy of a presentation on Peabody Coal Leases that was presented at our recent “Water is Life” forum on November 12, 2011, held at the Hopi Veterans’ Memorial Center.

As you may know, the Hopi Tribe and Navajo Nation entered into three separate leases with Sentry Royalty Company (predecessor to Peabody Western Coal) beginning in the mid-1960’s. The Navajo Nation has a “Navajo Exclusive” lease (No. 8580) and shares another lease with the Hopi Tribe (No. 9910). Peabody pays 12.5% of monthly gross realization (royalty) on Lease 8580 to Navajo; and pays 6.25% monthly gross realization to both Hopi and Navajo under Lease 9910. The leases now provide for renegotiation every ten years, referred to as “Lease Reopener”. Lease 9910 has not been formally approved by Hopi although it was due for renewal in 2007. Navajo approved its portions in April 2011.

Coal from the Black Mesa Mine was dedicated to the Mohave Generating Station (MGS), but MGS shut its operations in 2005. Today, very little if any mining is occurring in the Black Mesa Mine area. Coal mined on the Kayenta Mine area is delivered to NGS and royalties are shared by the two tribes under Lease 9910 Lease; and Navajo receives all royalties under is lease, No. 8580.

Since the inception of the leases, Peabody Coal has not paid Hopi and Navajo at current fair market prices for the coal it mined and the water it pumped for mining operations. During its heyday, Peabody pumped over 3.3 million gallons each day from our precious Navajo Aquifer to slurry coal, over 275 miles from Black Mesa to MGS in Laughlin, Nevada. Since it began mining, Peabody mined over 400 million tons of coal from the Black Mesa and Kayenta mines.

If you review the leases, you will find the leases provided only for leasing of surface acres. No consideration was made on the value of the massive coal and water deposits that were the subject of the leases. No appraisals or valuation of the coal and water deposits were made to determine the fair market value of these resources. As a result, the tribes lost millions, if not billions, of revenues since the inception of the leases. Yet, by virtue of the leases, Peabody obtained exclusive subsurface rights to our vast deposits of coal and water without paying a dime for them. We (the tribes and the federal government) allowed Peabody to build a considerable company portfolio at our expense. This coal and water became an asset to Peabody that it would leverage for other business ventures. Tribal coal and water were “locked in” for the duration of the leases and tribes could not re-negotiate the terms of the leases, or could they leverage the resources. The leases effectively kept the tribes from diversifying their respective economies because the tribes lost control over the resources.

In a typical business scenario, a company would buy raw materials that it would use in manufacturing its products. Not so under the Peabody coal leases. The tribes received no upfront payments for the coal and water Peabody secured under the leases. Instead, tribes are compensated minimally (12.5% and 6.25% gross monthly realization) when Peabody sells the coal to NGS. Incidentally, the royalty rates were the subject of the Racketeering Influenced and Corrupt Organizations Act (RICO) which is a matter for later discussion.

Peabody and owners of NGS receive considerable benefits from the production and sale of electricity using our coal and water. Yet the tribes do not participate in the sharing of profits. See the Value Chain chart in the presentation. The chart depicts that owners of NGS (Arizona Public Service, Tucson Gas & Electric, Bureau of Reclamation, Salt River Project, Los Angeles Water & Power, and Nevada Power) are also “customers” of NGS.

Concerning tax revenues, while the Navajo Nation and the State of Arizona receive some tax revenues, the Hopi Tribe receives no tax revenues because it does not impose taxes on Peabody because of a reported covenant to not tax Peabody. In its 2005 report, Peabody reported that the Navajo Nation received over $82.9 million in various forms of taxes during the period 1986 to 2004, while the State of Arizona received over $67.5 million during the same period.

Payments made by Peabody are not commensurate with the profits they earn from our resources. Hopi only receives about $11.0 million to $13.0 million in royalties and other benefits each year from Peabody, very little, if any, of which goes to our people. But Peabody reported that its revenues rose 21% to a record $2.0 billion; and its operating profits rose 41% to $458 million for the Quarter ending June 2011. Peabody’s Chairman and Chief Executive Officer alone received a salary of $11.9 million in 2009; and its Executive Vice President and Chief Financial Officer earned $4.1 million. And the Salt River Project recently reported a profit of over 26% in 2011.

After almost 50 years of mining, we have nothing to show how the mining of our coal and the pumping of our precious Navajo Aquifer has benefited us. Simply look around. We have dilapidated infrastructure, dismal housing conditions, limited water supply, contaminated drinking water, limited scholarships, limited or no jobs, etc. Our socioeconomic conditions remain dismal while Peabody, NGS and their holding companies make significant profits from our resources. It is time to make a change in the structure of the coal leases so that our tribe, our villages, and our people can all benefit from sale of our resources:

  • Demand upfront payments for coal and water that will be the subject of the leases on an annual basis at fair market prices.
  • Increase the monthly royalties to reflect current fair market rates (instead of a minimum 12.5% and 6.25%).
  • Demand that Peabody complies with the leases and find alternative sources of water, other than using the Navajo Aquifer; and reclaim and repair the area including damages to the aquifers.
  • Limit the leases to coal and water, and exclude other “kindred” products.
  • Enact a tax ordinance and begin imposing possessory interest taxes, business activity taxes, sales taxes, fuel excise taxes, severance taxes, etc. on Peabody.
  • Hold Peabody accountable for damage done to our resources, including damages to our archaeological resources.
  • If Peabody refuses to amend its lease and agree to these conditions, seek competition to find a more responsible and accountable lessee.
  • Develop alternative uses of our resources and transition to use of alternative energy.
  • And impose on the Secretary of Interior Salazar to declare that Material Damage has occurred on Black Mesa and the Navajo Aquifer. There is clear evidence of damages done to our resources.

Benjamin H. Nuvamsa

Shungopavi Village

Former Hopi Chairman

“Water is Life” Forum – Saturday November 12, 2011

Click image to download flyer

A message from Ben Nuvamsa…

We are at a Cross Roads!  Critical issues face the Hopi Tribe and the Navajo Nation concerning our tribal water, coal, environment, our culture and our economy.  We must become informed of the big issues that will affect our tribes for hundreds of years to come.  Our tribal councils are not informed of, nor do they understand the complex issues that lie before them.  As tribal members and stakeholders, we must become educated and informed of these issues so that we can educate the elected tribal officials to make the proper and informed decisions.  This is an opportunity for everyone to share their concerns and participate in setting a direction to addressing these important issues.  We will have common issues.  How do we work together to preserve and conserve our resources for our future generations? Come and learn about these issues and express your concerns.

The attached flyer announces our forum to be held November 12, 2011, at the Hopi Veterans’ Memorial Center.  Spread the word to Hopi and Navajo citizens. Everyone is welcome.  Tribal council representatives and delegates are especially encouraged to attend.  Traditional Hopi meal will be served.

One of the most important topics to be covered concerns the recent findings by Dr. Daniel Higgins of the impacts on the N-Aquifer from years of pumping by Peabody Coal.  We will also discuss the proposed Northeastern Indian Water Rights Settlement Agreement and what provisions it contains.  There are many other important issues facing our tribes such as the Kayenta Mine Life of Mine Permit.   What does all of this mean to you?  Come learn and express your concerns.

 

Kathy Helms of Gallup Independent on forum to address Navajo-Hopi coal, water issues

This just in from the Gallup Independent

Forum to focus on Navajo-Hopi coal, water issues

By Kathy Helms
Dine Bureau
Gallup Independent

WINDOW ROCK – The people of the Navajo Nation and the Hopi Tribe are at a crossroads, according to former Hopi Tribal Chairman Ben Nuvamsa. The dilemma hinges on whether to continue accepting pennies on the dollar for their resources from outside entities, or take the bull by the horns and create “economic sovereignty” for themselves.

A public forum sponsored by the Inter-Tribal COALition to address tribal water, coal, environmental, cultural and economic issues affecting the tribes will be held at 6 p.m. Sept. 30 on the sixth floor of the Native American Community Building, 4520 N. Central Ave., Phoenix.

Presenters include Daniel Higgins, Ph.D., Sean Gnant of the Brewer Law Firm, Milton Bluehouse Sr., and Nuvamsa. Navajo Nation Council delegates, Hopi Tribal Council members, and interested members of both tribes are asked to attend the forum to learn more about their common issues.

“We believe that we are at the crossroads. Many of these entities are after our water and our coal. We kind of stand, so to speak, at the headwaters of all these resources,” Nuvamsa said.

Coal from the tribes is used to generate electricity so the people in southern Arizona, southern California and Nevada will have electricity in their homes. The massive Central Arizona Project depends on power from Navajo Generating Station so the federal government can deliver surface water to tribes and municipalities in southern Arizona, he said.

“The sad part is that these entities that are using these resources to provide these services to the people and generate profits are not paying us at the fair market value for our water and our coal,” while the tribal councils are prematurely agreeing to settlements without properly informing their people, he said.

“For example, the lease reopener that’s before the Hopi Council – there ought to be increased royalties. Instead of one-time bonuses, there ought to be annual bonuses. There ought to be higher scholarships – $85,000 (for Hopi) is nothing.”

In addition, provisions in the proposed Northeastern Arizona Indian Water Rights Settlement could hold Peabody Energy and others harmless for all past, present and future damages to the water quality. “I think these are the kinds of things that people need to know, that our tribal councils are agreeing to these things,” he said, adding that the companies should be held accountable for damages and the federal government should be held accountable for not enforcing the rules.

“Both nations ought to be able to say, ‘OK, we have this precious resource, we’re going to take all bidders,’ and be able to go out and compete for higher prices, not have it handed to Peabody Coal. We ought to be able to make those decisions ourselves. I call that economic sovereignty,” Nuvamsa said.

During last week’s meeting with U.S. Department of the Interior Deputy Assistant Secretary David Hayes on the proposed water rights settlement – which many have linked to the future survival of NGS and the Central Arizona Project – Shiprock Delegate Russell Begaye said a change of policy may be in order in terms of the use of Navajo resources by outside entities such as Las Vegas, Phoenix, Tucson and Los Angeles.

Begaye said Navajo historically has focused on “outsourcing” its minerals and water resources rather than looking inward to see how they can be used to benefit the Navajo people. He proposed that Navajo look at developing local community-based generating plants which produce up to 10 megawatts of electricity.

“The town of Shiprock where I’m the delegate – about 18,000 folks – we can probably use 2 to 3 megawatts to run the whole community, and the rest we could outsource and sell to outside entities or other communities on our land, using a combination of coal, wind and solar.”

Rather than building mega-plants to power up electricity in other places, if a company said, “’We want to come alongside you and develop those resources to light up your communities on the reservation, to give water to homes on your land, and be able to do it in such a way that these communities can start selling these sources to outside entities,’ then we’re really talking about a trust responsibility that builds the Nation first,” Begaye said.

“I think the focus needs to turn from Phoenix to the Navajo Nation, from Los Angeles to the Navajo Nation. That policy change, if it takes place, will resolve a lot of our issues. We are sitting on gold mines, but those gold mines are being used by outside entities.”

Navajos travel to major cities across the West and “dream about the days when we may have those stores and those manufacturing plants,” Begaye said, all the while knowing it is Navajo resources which made those developments possible. “Why not let’s turn that inward? Let’s change the policy of outsourcing, to using those resources to build a nation.” He asked Interior to help Navajo in that endeavor.

After Interior officials left, the work session turned from water to NGS and despite efforts by Duane Tsinigine and Nelson Begaye to keep the session open to the public, Nabiki’yati’ Committee voted to go into executive session.

Adella Begaye of Wheatfields, a member of Dine Care, said, “This is very sad because there is no accountability, there is no transparency. All these decisions are made without our consent, without our concern. We have been concerned about the water settlement because 36,000 acre feet is not enough for our Nation, and they are now even trying to settle for $400 million – which is nothing.”

She said it was wrong for Navajo and Interior officials to try to push through the settlement by saying there is just a small window of opportunity because Sen. Jon Kyl, R-Ariz., will retire next year and chances for a settlement after that are not likely. “Kyl is for Phoenix to get all the water they can. They’re not for the Navajo Nation.”

Tsinigine left the meeting when it went to executive session. “It’s only fair that all delegates are here to hear these issues, and some of these issues, in general, should be made public. In LeChee, Coppermine and Kaibeto, the majority of the men and women work at Navajo Generating Station and they want to be updated and make sure that the people hear what is at the negotiating table,” he said afterward.

“We’re leaving 75 percent of the Council out of it,” because they were given abrupt notice of the meeting and many had prior commitments, he said. “That’s not fair.”

Marshall Johnson of To Nizhoni Ani, or Beautiful Water Speaks, said the Interior’s visit to discuss their water rights was “like you see on television – a drive-by” that took in the president’s office, Legislative and the Hopi Tribe, but the people, “the original stakeholders,” were left out.

The state of Arizona is the beneficiary of any proposed settlement, he said. During a May hearing in Washington, Shelly and Hopi Tribal Chairman LeRoy Shingoitewa stressed the importance of NGS to the tribes. Johnson, who testified along with Black Mesa Trust Director Vernon Masayesva, opposed extending the lease.

“We told Central Arizona Project it’s about time they get self-sufficient. We’ve been feeding them. They have a $3.5 billion operation in industrial agriculture. We made it available for them. Navajo resources made it possible to push water 3,000 feet elevation uphill. They plant three times a year,” he said. “We have no net benefit from this operation.”

Information:http://beyondthemesas.com/2011/09/21/a-forum-to-address-tribal-water-coal-environment-cultural-and-economic-issues-affecting-hopi-tribe-navajo-nation-phoenix-az-sept 30-2011/


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© Matthew Sakiestewa Gilbert and BEYOND THE MESAS, 2009-2014. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Matthew Sakiestewa Gilbert and BEYOND THE MESAS with appropriate and specific direction to the original content.

About the author

Matthew Sakiestewa Gilbert is enrolled with the Hopi Tribe from the village of Upper Moencopi in northeastern Arizona. He is an associate professor of American Indian Studies & History at the University of Illinois at Urbana-Champaign.

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