Peabody talks with EPA fail; appeal back on over coal mine permit in New Mexico

Now that the parties to an appeal involving a water permit for a Peabody Energy (NYSE: BTU) coal mine in New Mexico have reached an impasse in settlement talks, the U.S. Environmental Appeals Board on April 20 pulled the case off the shelf and approved a new case schedule.

In November 2014, Lee Ranch Coal filed a petition with the board seeking review of a National Pollutant Discharge Elimination System renewal permit that the U.S. Environmental Protection Agency Region 6 had issued. The board then granted a joint motion from the parties requesting a stay in this matter. The stay was extended until April 15 to allow the parties to continue settlement negotiations. On April 15, the parties filed a status report stating that “they have reached an impasse and are unable to informally resolve the matter.”

They requested that the board issue a briefing schedule and provided suggested dates for the remaining briefing documents. The board found the parties’ recommended time line to be reasonable and ordered EPA to file a response to the petition, a certified index of the administrative record, and the relevant portions of the administrative record on or before May 6. Lee Ranch Coal was ordered to file a reply brief, if it so wishes, on or before May 21.

The company is appealing a total dissolved solids (TDS) limit and a requirement to submit within six months of the permit being issued a Sediment Control Plan. The permit is for its El Segundo mine. The TDS limit was not in the original 2008 permit for this mining operation, which was initially developed around that time to supplement production from the nearby, long-established Lee Ranch strip mine. The limit is due to concerns about TDS in water runoff from the site impacting the San Juan River. EPA did not conduct a reasonable potential assessment of whether the mine’s runoff has this impact before imposing this new limit, the company said. The river is 100 miles away from the mine, Lee Ranch Coal pointed out. As for the Sediment Control Plan requirement, the company said there is no evidence to support the need for such a plan to be drawn up.

Said the Peabody website about this operation: “Located about 35 miles northwest of Grants, N.M., the Lee Ranch Mine supplies coal to power plants in New Mexico and Arizona. In 2008, Peabody opened the El Segundo Mine (which means ‘the Second’ in Spanish). The El Segundo Mine, adjacent to Lee Ranch, is the most productive U.S. mine outside of Wyoming’s Powder River Basin, with a low overburden-to-coal ratio and access to equipment from other operations.”

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.