In August Alaska Governor Sarah Palin (R) signed House Bill 299, which allows the Alaska Railroad Commission to issue over $2.5 billion in tax-free industrial development revenues bonds to finance Agrium Inc.’s planned coal gasification project at its Kenai nitrogen plant. The bill was passed by both houses of the Alaska Legislature in May (GM May 21, p. 1).
The U.S. Internal Revenue Service must also rule whether the bonds qualify as tax-exempt.
The coal gas project is necessary to assure that the Kenai plant can remain operational. Due to gas shortages in the area it is now a seasonal plant, with an expected operations schedule this year of May through October.
Under the coal gas plan, coal would be shipped from Usibelli Mine Inc.’s mine in Healy, in inland Alaska, via the Alaska Railroad to the Port of Anchorage, where it would be barged to Kenai.
Currently, Agrium is still studying the feasibility of the coal gas option. It is expected to make a firm decision by the fall of 2008. Once a decision is made and construction begins, the project could be completed by 2011-2012.