Falls Creek is on the Kenai Peninsula and flows generally south for 3.2 miles (5 km) to the northwestern shore of Kachemak Bay, in the Cottonwood Eastland Unit of Kachemak Bay State Park, about 17 miles (27 km) northeast of Homer and 2.5 miles (4 km) southwest of Kachemak Selo, Alaska. The creek was named in 1904 by Ralph W. Stone of the U.S. Geological Survey for a waterfall that cascades 20 feet (6 m) over a coal seam near the beach. The Border Ranges fault is roughly aligned with the axis of Kachemak Bay and juxtaposes Mesozoic sedimentary rocks of the Peninsular terrane to the west and underlying the Kenai lowlands against highly deformed and metamorphosed Mesozoic rocks of the Chugach terrane to the east and forming the Kenai Mountains. The eroding bluffs on the northeastern shore of Kachemak Bay are comprised of fine-grained sedimentary rocks of the Kenai Group, a sequence formed during the Miocene, or about 23 to 5 million years ago. Quaternary sediments blanket most of the Kenai lowlands and this rock formation comprises the only bedrock exposures along the Cook Inlet coast between the Kenai River and the Fox River. The Kenai Group is comprised of the Tyonek, Beluga, and Sterling rock formations. The bedrock at Falls Creek is exposed almost continuously in the precipitous wave-cut cliffs and steep walls of stream canyons and represents the uppermost strata of the Beluga Formation and lowermost strata of the Sterling Formation. The sequence consists of at least 5,000 feet (1,500 m) of moderately to weakly hardened, locally conglomeratic sandstone with interbedded siltstone, claystone, and coal seams. The rock is highly friable and active mass wasting has formed deep gullies. Talus cones have developed at the base of the sea cliff from accumulating rock fragments. The proportion of sandstone increases northward and the number and thickness of coal beds and the quality of the coal decreases. The coal is relatively low-grade lignite to sub-bituminous. Coal beds are generally lenticular, ranging from 3-7 feet (1-2 m) thick. Many former coal beds have been burned, resulting in the adjacent rocks being baked a distinctive brick-orange color.

The archaeological record from Kachemak Bay indicates that maritime hunters of the late Ocean Bay tradition appeared briefly in Kachemak Bay about 4,500 years ago, probably coming from the Alaska Peninsula. About 4,000 years ago, a culture related to the Arctic Small Tool tradition of the Alaska Peninsula appeared in the bay. By 3,000 years ago, Kachemak tradition sea hunters with close connections to Kodiak Island were established and lasted for about 1,500 years. The Kachemak tradition can be divided into two phases, the Early Kachemak phase is known from a midden on Yukon Island where artifacts included a primitive hand-thrown harpoon, barbed bone points, a simple stone lamp, fish hook barbs, and labrets. Animal bones indicate that a variety of land and sea animals were hunted including harbor seals, porpoises, marmots, and lesser whales. The Late Kachemak phase is based on finds at Yukon Island, Cottonwood Creek, and Chugachik Island. Food preferences appear to be the same, but weapons improved with multiple barbed arrowheads. Characteristics of this phase are exotic burial practices, decorated stone lamps, and semi-subterranean houses. The Cottonwood Creek site also provided evidence showing that they endured great hardships. Many skeletons at the site showed signs of degenerative bone diseases, arrested growth, and enamel hypoplasia of the teeth, which are all attributed to malnutrition. The people of the Kachemak tradition abandoned the area about 1,500 years ago. About 800 to 500 years ago, the ancestors of the Dena’ina people migrated from the interior and adopted a maritime subsistence economy from the Alutiiq people of the outer Kenai Peninsula. The Dena’ina established several villages in Kachemak Bay and many seasonal camps along the coast of the inner bay. A village called Soonroodna was known by early Russian explorers but has not been relocated. The Dena’ina also had a village on Yukon Island.

Coal was first discovered in Kachemak Bay at present-day Coal Cove near Nanwalek in 1786 by Nathaniel Portlock. In 1852, the Russian-American Company started mining the coal and continued the operation until the Alaska Purchase in 1867. The coal was supplied to Russian steamers but it was of poor quality and sold at a loss. In 1888, the Alaska Coal Company began mining coal from the Bradley seam at Fritz Creek. In 1891, Lieutenant R.P. Schwerin of the U.S. Navy took 200 tons of Kachemak Bay coal to San Francisco for testing and the results were that the coal was of insufficient quality to warrant to cost of extraction. In 1894, the North Pacific Mining and Transportation Company began exploration for a mine at Eastland Creek, and several buildings and a pier were constructed at the mouth of the canyon. A tramway was built from the pier to a tunnel in a coal seam about 0.5 miles up the canyon. At least 650 tons of coal were removed. Prospecting for coal of commercial quantity and quality continued from 1894 to 1897 at Eastland and McNeil Canyons, but the only viable operation occurred about 3 miles (5 km) west of the base of the Homer Spit. A railroad was constructed from the end of the spit along the beach to the mainland and then west to Coal Creek. Two tunnels were excavated in a coal seam 6.5 feet (2 m) thick in the bluff between Cooper Creek and Coal Creek. In 1904, the U.S. Geological Survey explored Fall Creek and found a large number of coal seams 1-2 feet (0.3-0.6 m) thick exposed in the bluff east of the canyon. A seam 2 feet (0.6 m) thick was near the base of the bluff and caused the waterfall. A seam 3 feet (0.9 m) thick was found at an elevation of 90 feet (27 m), a seam 6 feet (1.8 m) thick at an elevation of 170 feet (52 m), and a seam 4 feet (1.2 m) thick at an elevation of 240 feet (73 m). All the coal was below commercial grade. In 1959, another survey by the U.S. Geological Survey found that many of the coal seams at the head of Kachemak Bay had burned. This was indicated by thick zones of yellow to brick-red shale that was baked to a flinty hardness. A few small burned zones were found along the escarpment west of Homer, and several extensive burned zones are exposed in the beach bluffs in the vicinity of Cottonwood Creek. In the sections of the bluff between Eastland and Swift Creeks, practically all the coal beds have been burned. The only outcrops of unburned coal were in the bottoms of ravines where the coal was kept wet by springs. Much of the burning was believed to have occurred in recent years. Read more here and here. Explore more of Falls Creek and Kachemak Bay here: