Arch Coal, over environmental protests, adding reserves at West Elk

The U.S. Forest Service said in an April 25 Federal Register notice that its Grand Mesa, Uncompahgre and Gunnison National Forests (GMUG) in Colorado plan to write an environmental impact statement on planned additions to federal coal leases in the North Fork Valley.

The local forest administrators must decide whether or not to consent to the U.S. Bureau of Land Management (BLM) modifying federal coal leases COC–1362 and COC–67232 by adding 800 and 922 acres, respectively, to them. If the GMUG does consent to leasing, it will prescribe conditions (as stipulations) for the protection of non-mineral resources.

Public comments for this project were received between April 21 and May 21, 2010, during the preparation of an environmental assessment. Comments received during that period will also be considered in this analysis. Additionally, the agency will continue to accept public comments throughout the preparation of the draft environmental impact statement, which is estimated to be released in May, with the final environmental impact statement due in July.

This leasing is for Arch Coal’s (NYSE: ACI) West Elk longwall mine, which is operated under a subsidiary called Mountain Coal. The proposed lease modifications are located in Gunnison County. “The proposed action deals primarily with underground mining,” the Federal Register notice said. “It is assumed that longwall mining practices would be used. Surface disturbance may include soil subsidence due to removal of the coal. In the event that post-lease surface activities are proposed and authorized, other soil disturbance may occur due to temporary road construction and drilling of methane drainage wells. A Reasonably Foreseeable Mine Plan (RFMP) has been developed to address potential environmental effects. It is detailed to the extent possible and will be included in the analysis.”

At the end of 2011, WildEarth Guardians, on behalf of itself and other groups like the Sierra Club, protested the Forest Service’s November 2011 finding of no significant impact (FONSI) for this leasing. “The decision being appealed – as described on pages 2-4 of the FONSI – is the Forest Service‘s selection of the Proposed Action Alternative,” the environmental group wrote. “That decision provides the Forest Service‘s consent to the Bureau of Land Management to lease: (1) 800 acres of Forest Service lands included in Federal Coal Lease Modification COC-1362; and (2) 922 acres of Forest Service lands included in Federal Coal Lease Modification COC-67232. Of these 1,722 cumulative acres, approximately 1,450 acres are within the Sunset Inventoried Roadless Area. The decision will provide Mountain Coal Company, LLC with access to approximately 10.1 million tons of coal, and will result in the daily venting of millions of cubic feet of methane, a potent greenhouse gas, directly into the atmosphere for over a year and a half; the mine vented an average of 7.5 million cubic feet of methane daily in early 2010.”

On Feb. 13, the Forest Service rejected that appeal, but the environmental groups will undoubtedly again make their concerns heard during the upcoming environmental impact statement process.

“West Elk is an underground mining complex located on approximately 17,800 acres in Gunnison County, Colorado,” said Arch Coal’s Feb. 29 annual Form 10-K report. “The West Elk mining complex extracts steam coal from the E seam. We control a significant portion of the coal reserves through federal and state leases. The West Elk mining complex had approximately 88.3 million tons of proven and probable reserves at December 31, 2011. Without the addition of more coal reserves, the current reserves could sustain current production levels through 2021 before annual output starts to significantly decline. The West Elk complex currently consists of a longwall, two continuous miner sections and a loadout facility. We ship most of the coal raw to our customers via the Union Pacific railroad.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.