TVA mulls sale of coal reserves in Bell and Harlan counties, Ky.

The Tennessee Valley Authority was taking comment until Nov. 4 on a draft environmental assessment (EA) on the potential disposal of the Straight Creek coal reserves in Bell and Harlan counties, Kentucky

TVA said its needs for maintaining additional coal reserves to fuel its fossil plants have changed due to a variety of circumstances. Much of the coal underlying the Straight Creek property is more suitable for metallurgical purposes, such as making steel, than as steam coal. Also, the mining of a vast majority of the coal reserves owned by TVA on these properties would not be economically feasible due to the thinness of the coal seam. Thus, the recognized value of the coal reserves being considered for disposal has changed.

Because these reserves are no longer a strong asset, TVA proposes to declare them surplus property. Disposal of these coal reserves would allow TVA to recover economic value from the initial expenditure and reduce its exposure to environmental liability associated with the continued ownership of coal rights underlying the properties. The draft EA describes the anticipated impacts of selling TVA’s mineral rights to the Straight Creek properties and of a No Action Alternative.

On behalf of the United States of America, TVA acquired rights to coal underlying approximately 8,800 acres (Tract CGCR-1) in Bell and Harlan counties in 1961. Tract CGCR-1 is composed of five separate parcels (XCGCR-1 through 5). The purchase of Tract CGCR-1 gave TVA rights to all coal in the seam known as the Straight Creek Seam underlying the subject 8,800 acres. TVA did not acquire rights to any other coal seams or any rights to timber, oil, gas or other minerals underlying or on the subject lands. However, the deed provided certain rights to TVA, including rights of ingress, egress, and regress over the surface as are reasonably necessary for the purpose of prospecting, mining, and removing coal from the Straight Creek Seam. The deed also granted TVA the right to dispose of slate and other refuse; divert water; and erect, maintain, and remove from the surface such buildings, structures, and infrastructure as shall be reasonably necessary to mine, store, and remove coal from the Straight Creek Seam.

Also in 1961, TVA purchased certain rights to all the coal and other minerals, except gas and oil, underlying lands in Bell, Clay, Harlan and Leslie counties, Kentucky, from the Red Bird Timber Corp. Subsequently, these properties were known collectively as the Red Bird coal properties. Tract XEKCR-16L (composed of Parcels XEKCR-44 and 45) is included in these properties. Although TVA did not acquire any surface rights in fee, that purchase did provide TVA the right to remove coal by any mining process, to use the surface as may be necessary to conduct coal removal, to use existing roads and to construct and maintain infrastructure necessary to conduct mining operations, and to mine, remove, and transport coal underground or through surface installations on the subject land.

The original Red Bird acquisition was 40,220 acres. TVA transferred the majority of the Red Bird properties to the U.S. Forest Service in the year 2000, retaining only the 784- acre Tract XEKCR-16L. Tract XEKCR-16L consists of two parcels (XEKCR-44 and 45). Tract XEKCR-16L abuts portions of the 8,800-acre Tract CGCR-1. The larger of the two parcels (XEKCR-44) abuts Tract CGCR-1. The smaller 48.6-acre parcel (XEKCR-45) is situated about 2.5 miles east of the larger property and adjoins an arm of the CGCR-1 main property. All coal reserves that can be mined economically by surface mining techniques have been removed from Tract XEKCR-16L under previous coal leases issued by TVA.

TVA’s Straight Creek properties being evaluated in this environmental assessment include both Tracts CGCR-1 and XEKCR-16L, a total of 9,584-acres. TVA does not own the rights to any surface-minable coal seams on Tract CGCR-1 and coal mining on Tract XEKCR-16L has occurred in the past to the extent that all of the coal that could be removed profitably by current surface mining techniques has already been mined. Thus, no additional surface mining for coal on Tracts CGCR-1 or XEKCR-16L is expected.

Collectively, these properties (Tracts CGCR-1 and XEKCR-16L) are referred to as the “Straight Creek property” for the purposes of this EA. Because of its depth (approximately 800 feet), the Straight Creek Seam would typically be mined by underground methods, and any removal of coal from the Straight Creek Seam under the Straight Creek property would require underground mining methods. Limited drilling indicates that the Straight Creek Seam under much of the 9,584-acre property thins to the extent that underground mining of this coal seam would be generally economically infeasible; the seam is estimated to be less than 2 feet thick. The exception to this is Parcel XCGCR-3, an approximately 122-acre property situated to the southwest of the main body of the property. TVA estimates there are approximately 192,000 recoverable tons of coal in the Straight Creek Seam under Parcel XCGCR-3.

The Straight Creek Seam is slightly thicker (estimated at less than three feet thick) under Parcel XCGCR-3 than under the rest of Tracts CGCR or XEKCR-16L. The coal under Parcel XCGCR-3 would likely be economically unattractive if it were mined independently. However, removal of the coal on Parcel XCGCR-3 could be profitable to an existing mining operation that is adjacent to or in the close vicinity of Parcel XCGCR-3, because existing mining infrastructure, such as portals, underground coal transportation systems, and air ventilation shafts could be used, thereby avoiding initial investment and start-up costs. Thus, with the exception of the 122-acre Parcel XCGCR-3, any remaining coal cannot be currently recovered economically from beneath the 9,584-acre Straight Creek property.

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.