Carey discusses energy, stimulus funds

Posted: Thursday, August 20, 2009

Energy topped Kenai Peninsula Borough Mayor Dave Carey's list during his borough update speech presented to the Kenai Chamber of Commerce Wednesday afternoon.

There is no more important long-term goal than energy, he said. With a gas pipeline at least five years away from becoming a reality, Carey said he is committed to assisting the petro-chemical industry remain in Cook Inlet. Losing that industry would be a great threat, he said.

"I hope all of us appreciate what the petro-chemical industry brought us," Carey said.

Carey said he's a strong advocate for the industry as it provides many jobs and a large tax base for the borough.

Currently, Pacific Energy Resources, which has several facilities in Cook Inlet, including the Monopod and Osprey platforms, is talking about abandoning those facilities due to an inability to attract buyers.

Carey said he is dedicated to promoting this area for investment in the oil and gas industry and to keep Pacific Energy and the jobs it creates on the Kenai Peninsula.

"The health of the petro-chemical industry is critical," he said.

Since exercising its lease at Ladd Landing three and a half months ago, PacRim Coal LLP has been working to finalize its agreement with the borough.

Called the Chuitna Coal Project, PacRim is exploring a future strip mine coal operation in the Beluga Coal Fields on the west side of upper Cook Inlet. The company has a state lease on more than 20,000 acres of land northwest of Tyonek estimated to contain one billion tons of ultra-low sulfur, sub-bituminous coal.

PacRim hopes to mine that deposit over the course of several decades, beginning with a 5,000-acre section that could produce 12 million metric tons a year for 25 years.

Most of the coal would likely be shipped overseas from a dock facility to be built at Ladd Landing.

The borough first entered a lease-option contract in 1987 with Tidewater Services Corp., which merged with Midgard Energy Co. in 1994. The option has since been assigned to PacRim Coal.

"We're pleased to see that (project) moving ahead," Carey said.

With the poor economic state, tourism on the peninsula is likely to be significantly lower than in years past, but how much is uncertain.

Carey said he's heard anywhere from a 20 to 40 percent decrease in tourism is expected, however, nothing is calculated at this point.

Because most businesses file quarterly reports, it will still be about two more months before total tourism numbers can be calculated, he said.

In regard to federal stimulus money, the borough remains on hold as it waits for approval of grants it applied for.

"We haven't seen much stimulus money yet," Carey said.

He said the top priority is bank erosion in Kenai. Carey said he hopes the money the borough receives will help complete the project and fix a problem that's plagued the city for several decades.

For road maintenance, it seems the borough is too small to qualify for funds.

In talking with Sen. Mark Begich, Carey said Begich told him that only communities of 500,000-plus will be eligible for transportation stimulus funds.

"That doesn't bode well for us," Carey said.

Mike Nesper can be reached at

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