Earth Inc.: Indians Vs. Miners

The Natural Resources Defense Council last year funded a hydrological study of the aquifer that found the water level in some of the Hopi wells had fallen 100 ft. since mining began, and the flows from most of its springs had been reduced 50%. Peabody cites its own extensive studies and argues that the water it draws from the aquifer is comparable to dipping "half a beverage can out of a 55-gal. drum." But Palmer says that Peabody "does accept that the aquifer has religious significance."

The aquifer and the coal also have huge economic significance for the tribe. Payments from Peabody account for three-fourths of the tribal council's $19 million annual budget, which pays for services like schools and health clinics and salaries for about 500 council employees. Hopi tribal chairman Wayne Taylor Jr. bluntly concedes that "basically, we don't have an economy. We've become dependent on the Peabody income."

Taylor has been working with Peabody for years to try to find another source of water for the slurry pipeline--perhaps Lake Powell, some 60 miles northwest on the Colorado River. But that solution would cost about $106 million, and powerful interests oppose any further claims on the Colorado's waters.

Why not just ship the coal by rail to the Mohave power plant--the same way Peabody already ships coal from Black Mesa to a power plant near Lake Powell? There is no direct rail line to the Mohave plant, and the cost of building one, says Peabody's Palmer, "would be prohibitive."

Complicating efforts to settle the water dispute is its sordid history. The initial deals between Peabody and the Hopi during the 1960s, on much worse terms than similar deals elsewhere, were negotiated by a lawyer, John Boyden, who died in 1980. He claimed to represent the controversial tribal council of the day, which paid him a $1 million fee--even as he secretly represented Peabody's interests. Says University of Colorado law professor Charles Wilkinson: "It's as outrageous a scenario as we've seen in Western resource development."

Peabody's current management says it wants a deal that is fair to all parties. To achieve that, however, Palmer says, "we need help from Congress and the White House." In both places, Peabody should be able to command a respectful hearing. It contributed $250,000 to the Republican National Committee during the 1999-2000 campaign, and Engelhardt gave $100,000 to the Bush-Cheney Inaugural fund.