The U.S. Bureau of Land Management office in Utah is taking 30 days of public comment from Nov. 15 on an environmental assessment covering new coal reserves that PacifiCorp wants to add to its Deer Creek longwall mine in Emery County.
In November 2011, PacifiCorp c/o Interwest Mining Co. requested lease modifications from BLM affecting federal coal leases UTU-88554 and UTU-06039. PacifiCorp applied for the lease modifications to expand the existing Deer Creek mine in order to continue its current level of coal production for approximately three additional years. The lease modifications would add 860 acres of unleased federal subsurface coal to federal coal lease UTU-88554 and 320 acres to federal coal lease UTU-06039. They are called the Mill Fork South Tract and Mill Fork Southeast Tract, respectively.
The two lease modification areas are located about 15 miles northwest of Orangeville in Emery County. The areas are adjacent to the southern boundary of the existing parent leases and are comprised of National Forest System (NFS) lands administered by the U.S. Forest Service (FS), Manti-La Sal National Forest (MLNF) Ferron-Price Ranger District. The subsurface coal estate is administered by the BLM State Office and BLM Price Field Office.
The lease modification applications are being processed as non-competitive coal lease modifications. “It is unlikely that any other company could economically access or mine this reserve because the coal does not come to the surface (outcrop) within or adjacent to either modification boundary areas associated with UTU-88554 and UTU-06039 federal coal parent leases,” the EA said. “The lease modification applications are being processed to prevent the potential bypass of federal coal reserves which contain bituminous coal resources that are compliant with the Clean Air Act. Coal in the lease modification areas would be recovered by underground mining methods.”
- The 320-acre tract meets the needs of the applicant and increases the federal coal reserve base. Using current mining methods, the tract could contain about 2.5 million tons of Blind Canyon and Hiawatha seam recoverable bituminous coal. Faults are not expected during mining in the lease modification area.
- Using current mining methods, the 860-acre tract could contain about 7.6 million tons of recoverable Blind Canyon and Hiawatha seam recoverable bituminous coal.
The coal seam of interest within the lease modification areas is the Blind Canyon seam, which ranges from five to 12 feet in thickness. Also present is the Hiawatha coal seam that ranges from five to eight feet thick.
PacifiCorp has had mining issues at Deer Creek
PacifiCorp d/b/a Rocky Mountain Power filed a general rate case request in February with the Utah Public Service Commission. The initial PacifiCorp rate case testimony dealing with coal supply issues came from Cindy Crane, Vice President, Interwest Mining and Fuel Resources for PacifiCorp Energy
There are three primary drivers for a projected Deer Creek cost increase, Crane reported at the time: reduced production; increased material and supply costs; and increased longwall set-up costs. Deer Creek’s production is projected to be about 265,000 tons less in the May 2013 ending test period. Materials and supply costs have increased primarily due to increased unit costs and higher usage of operating supplies for roof support and adverse geological conditions associated with elevated levels of ash and sulfur. Due to two additional longwall moves in the May 2013 ending test period and lower coal recovery from the longwall panels, the longwall set-up cost per ton will increase by a redacted amount.
The Deer Creek mine represents the lowest cost company coal supply in Utah. Deer Creek costs are more less than the delivered cost of Castle Valley and Sufco coals into the Huntington power plant, Crane noted.
Deer Creek’s sulfur content has increased with the movement of longwall operations in December 2010 from the upper Blind Canyon seam to the lower quality Hiawatha seam. Also, during the first quarter of 2011, Deer Creek encountered areas of high ash and high sulfur with the sulfur content at times exceeding 1%. The company did not previously encounter pockets of high sulfur coal in the Blind Canyon seam. The Deer Creek mine will again encounter elevated levels of ash and sulfur coal with sulfur reaching as high as 1.4% in 2012.
To ensure emissions compliance related to the Deer Creek sulfur levels, the company segregates the coal at the Huntington power plant and then, depending upon quality, the coal will be shipped to the Hunter power plant and/or Cottonwood Prep plant. This coal is then reclaimed and comingled with other coals to ensure the blended product does not cause a sulfur exceedance or violates minimum heat content requirements. The Hunter plant is forecasted to consume at least 300,000 tons of Deer Creek mine’s high ash, high sulfur coal during the May 2013 ending test period. Deer Creek could avoid this problem coal, but not without significantly increasing its production costs, Crane noted.
U.S. Mine Safety and Health Administration data shows that Deer Creek produced 2.4 million tons of coal in the first nine months of this year and 3.1 million tons in all of 2011.