The U.S. Forest Service and the U.S. Bureau of Land Management have out for comment a draft environmental impact statement covering a total of 1,721 acres of federal coal reserves that Arch Coal (NYSE: ACI) wants to add to its West Elk longwall mine in Colorado.
Arch’s Ark Land unit, which is handling this leasing, wants to add about 800 acres to one existing federal lease and about 921 acres to another lease for a total of approximately 1,721 acres. This area contains an estimated 10.1 million tons of federal coal reserves in the E coal seam.
The tracts are bounded on the north by currently leased federal coal, on the east by inferred unmineable coal (unleased), on the west by private land which contains an estimated 5.6 million tons of mineable coal and on the south by wilderness. Therefore, it is assumed that access to the coal reserves in the lease modifications would most easily be achieved from underground workings at the West Elk mine and surface facilities near Somerset, Colo.
Production from the existing West Elk mine, which is run by Arch’s Mountain Coal unit, is about 6.5 million tons per year (tpy) using the longwall mining method, and is capable of peaking at a 7 million tpy rate, the draft EIS noted. It is assumed for this analysis that the coal would be extracted at 6.5 million tpy. No increase in coal production is assumed, and it is assumed that the coal would be transported to market using the existing coal handling facilities and existing spur rail line.
The plan for the lease modifications assumes the coal in the E seam would be extracted from portions of five longwall panels trending northwest-southeast. The panels in the lease modifications would include the start lines and the first few thousand feet of five panels that would extend west off the Forest Service lands and into coal reserves under Mountain Coal’s private land. The mining would “retreat” to the main entries of the mine. The continuous miner would be used to drive development entries for the longwall panels, with the primary coal production being achieved using the longwall.
The E seam coal in the lease modifications would be mined over a period of approximately three years; however, E seam coal reserves in the modifications represent about 1.6 years of additional coal reserves based on the rate of mining currently employed at the West Elk Mine. In addition, it has been indicated that the leasing and development of the lease modifications also allow for the production of 5.6 million tons of fee coal on adjacent lands, as well as an additional 3.3 million tons from adjacent federal coal reserves. Thus the lease modifications, if authorized, would extend the life of the West Elk Mine by about 2.9 years.
Environmental groups, including WildEarth Guardians, have tried for years to force BLM to get Mountain Coal to capture methane liberated by mining. Methane is a powerful greenhouse gas. Several different scenarios were evaluated for capturing and using methane, the draft EIS said. The analysis looked at different drilling strategies for venting methane and strategies to use or flare the methane. The analysis evaluated the more concentrated methane vented through the drainage wells and also the less concentrated methane vented through the ventilation system.
The analysis found that many of the technologies have not been successful in adequately venting methane. Similarly, the more promising technologies are not currently economically feasible and would be very difficult to implement at the West Elk mine due to site logistics and regulatory constraints. For that reason, the federal agencies have not included separate methane venting and use alternatives.
A lease addendum has been added to the parent leases by BLM which allows Mountain Coal to consider these methods if it is economically feasible for them to do so. Lease addendums would be carried forward to the lease modifications that permit (but do not require) these possible mitigation measures. The addendums require Mountain Coal to prepare annual reports on the feasibility of methane capture (among other potential control options) and require that the analysis is carried out to show whether or not the mitigation measures are economically feasible and protect the health, safety, and lives of the miners.
Another longstanding issue for West Elk is that some of the coal lands it works are within roadless areas declared for protection by the Clinton Administration, which has been the subject of years of litigation by pro-development factions in the western U.S. At the time the draft EIS is being prepared, this federal rule is in effect in Colorado. This is not the agencies’ preferred alternative because post-lease surface-disturbing activities (roads) technologically and economically necessary for safe mining underground currently cannot be authorized under it.
Under Alternative 2, the preferred leasing alternative, the Forest Service would consent to leasing and BLM would modify the leases with stipulations, notices and addendums. However, under the 2001 Roadless Area Conservation Rule framework, road construction would not be allowed in the modification areas.
Alternative 3 is similar to Alternative 2 except that it would be analyzed under the framework of the Colorado Roadless Rule, which is a state version of the much-litigated federal rule. At the time this draft EIS is being prepared, this Colorado rule is not yet in effect, so while this may be the agencies’ preferred alternative, post-lease surface-disturbing activities could not currently be authorized under it. Under Alternative 3, the Forest Service would consent to leasing and BLM would modify the leases with stipulations, notices and addendums. Under the Colorado Roadless Rule, post-lease temporary road building could be permitted in the lease modifications because it is in the area known as the “North Fork Coal Mining Area” in the rule.
“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 Form 10-K added: “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. In 2010, we finished constructing a new coal preparation plant with supporting coal handling facilities at the West Elk mine site. The loadout facility can load an 11,000-ton train in less than three hours.”