CONSOL permits expensive mine wastewater treatment system

Coal producer CONSOL Energy (NYSE: CNX) is seeking an air permit from the West Virginia Department of Environmental Protection on a water treatment plant in Marion County that would treat wastewater from its Pittsburgh-seam mining operations in this area of northern West Virginia.

The DEP, which is taking public comment until July 23 on a draft version of the air permit, noted that this project is needed due to a March 2011 consent decree agreement with the U.S. Environmental Protection Agency, the U.S. Department of Justice and the state of West Virginia. Under that deal, CONSOL was required to design, construct, and operate a wastewater treatment plant, landfill, and pipeline collection system for treatment of Monongahela Basin discharges.

On Feb. 13, a “no-permit needed” decision was issued to CONSOL for the haulroad activities associated with the water treatment plant. Those haulroad emissions have been rolled into this permit application.

CONSOL is required to construct a wastewater treatment facility to clean the mine-water discharges of the active Loveridge, Blacksville No. 2 and Robinson Run longwall mines in the Pittsburgh seam, plus the long-shut Four States mine. It is required to treat an incoming flow of 3,500 gallons per minute using pretreatment, reverse osmosis, and evaporation and/or crystallization processes.

Potential sources of air emissions at the facility are limited to particulate matter emissions from pneumatic unloading of soda ash and hydrated lime into three silos (one soda ash and two lime), load-out of evaporated salts, combustion exhaust emissions from an emergency generator, and fugitive particulate matter from haulroad activity. The 150-ton elevated silos used to store soda ash and hydrated lime will be loaded pneumatically by truck and controlled by individual baghouses/fabric filters on each silo.

On March 27, a DEP official conducted a site inspection. The proposed site is located in an isolated valley about three miles to the northwest of Mannington, W.Va. Significant construction at that point had been completed on the water tanks, pipe racks, and other facilities, but the emergency generator was not on-site.

CONSOL said about the overall situation related to water quality in its April 30 Form 10-Q report: “Federal and state environmental regulators are reviewing our operations more closely and are more strictly interpreting and enforcing existing environmental laws and regulations, resulting in increased costs and delays. For example, we entered into a consent decree with the EPA and the West Virginia Department of Environmental Protection pursuant to which we agreed to construct an advanced technology mine water treatment plant and related facilities to reduce high levels of total dissolved solids in water discharges from certain of our mines in Northern West Virginia, at a total estimated cost of approximately $200 million. The new facility must be placed into service no later than May 2013.”

As CONSOL alluded to in the Form 10-Q filing, its project is part of an overall trend where various coal producers, including Patriot Coal (NYSE: PCX), are increasingly having to install expensive new water treatment systems at their mining operations. That is a heavy new cost for those coal producers to bear as they try to fight off competition from cheap natural gas in the power generation market.