Time, cost conspired against the Centralia coal mine

Few people knew the TransAlta coal mine outside Centralia was shutting before the gates actually closed Monday. But a lot of people saw it coming.

A cascade of forces helped make the closure virtually inevitable, from the age and geology of the mine to changes in state tax law, say mining and energy experts.

It boils down to this: It makes more economic sense to haul trainloads of coal from Wyoming and Montana to fuel Centralia's power plant than it does to dig it out of the plant's backyard.

The veins of the Powder River Basin on the Wyoming-Montana border are wide, thick and close to the surface — a miner's dream. And the coal is relatively free of dirt, so it doesn't need a lot of costly cleaning.

"I don't know of any other place in the world that you can get at that much coal that inexpensively and mine it that easily," said Lee Buchsbaum, a Denver-based writer for Coal Age, a trade magazine.

Compare that with the coal seams in Centralia, one of them known as "The Big Dirty." They are fractured and undulating, close to the surface in places, but plunging deep elsewhere. Much of the coal was dirty and required cleaning. And the mine is 35 years old.

"We were moving more and more dirt and getting less and less coal," said Doug Jackson, president of TransAlta's U.S. operations.

Rep. Gary Alexander, R-Olympia, whose district includes the Centralia mine, said he had been hearing for much of the year that coal there was increasingly difficult to get.

"I didn't know it was a closure-coming situation," he said. "I knew we were having difficulty with the cost efficiency, and there might be some plan to scale down."

On top of it all, huge sections of a main coal pit fell in last summer and again in early November, burying some of the coal and pushing costs to the breaking point, the company says.

Over the years, state lawmakers have tried to make the mine worth keeping open.

In 1997, the Legislature passed a tax break for coal purchases made by power plants, as long as most of the coal came from Washington. It was tailor-made to keep the mine going. The Centralia plant is the only coal-fired power plant in the state.

But several out-of-state coal companies sued to overturn the tax break. So in 2000, lawmakers changed the law to allow the tax break no matter where the coal comes from.

Now, even if TransAlta gets all its coal from Montana and Wyoming, it still get tax breaks that could amount to more than $4 million a year at typical coal prices and tax rates.

TransAlta officials say that wasn't a factor in the closure decision. The real factor, Jackson said, was the sheer difference in price between Wyoming coal and Centralia coal. "It's not even a close call," he said.

Even so, the company says it still would like to open a major new mine next door to the current mine. But it could take three years to get permits and the company hasn't applied for them yet.

Even if it did, the plan could run into trouble because it encompasses hundreds of acres of wetlands.

Meanwhile, federal mining officials plan to meet with TransAlta next week about filling in the old mine. Eventually, the land is supposed to be covered with trees, pasture and wetlands.

Warren Cornwall: 206-464-2311 or wcornwall@seattletimes.com