Federal board dismisses Clean Water Act complaint filed by Lee Ranch Coal

The U.S. Environmental Appeals Board, at the request of Lee Ranch Coal, on Jan. 7 dismissed a 2014 complaint filed by Lee Ranch over a water permit issued for its New Mexico coal mine by the U.S. Environmental Protection Agency.

On Dec. 29, 2015, Lee Ranch Coal filed a motion to dismiss its petition for review after it reached a settlement agreement with the U.S. Environmental Protection Agency’s Region 6 office. The executed settlement agreement resulted in a permit modification proceeding that resolved the parties’ disagreements over the contested permit conditions.

Lee Ranch Coal had in November 2014 appealed the permit, covering water runoff from its El Segundo strip mine in New Mexico, due to certain conditions that EPA put into the permit that the company says were unjustified.

In September 2015, Region 6 proposed a draft permit for public comment to address the contested conditions. On Oct. 9, 2015, after reviewing the proposed draft permit for public comment, Lee Ranch Coal informed Region 6 of its belief that the proposed draft permit modification impermissibly deviated from the terms of the settlement arrived at earlier in the year. Thereafter, the parties conferred and worked toward a resolution of the issue. Region 6 extended the public comment period for the draft permit until Nov. 9, 2015. On Dec. 18, 2015, Region 6 took final action and issued the modification to NPDES Permit No. NM0030996.

Notable is that Lee Ranch Coal for many years has been a subsidiary of Peabody Energy (NYSE: BTU), the nation’s largest coal producer. But Bowie Resource Partners LLC announced Nov. 20, 2015, that it has entered into a definitive agreement to purchase the El Segundo and Lee Ranch surface mining complexes in New Mexico and the Twentymile underground mining complex in Colorado from Peabody Energy for $358 million in cash plus the assumption of certain liabilities.

Notable is that Lee Ranch Coal has both a newer surface coal mine, called El Segundo, and the nearby, older Lee Ranch surface mine. So in some respects the two mines can be counted as one complex.

This sale is expected to be completed in the first quarter of 2016. The transaction is subject to usual closing conditions and regulatory approvals.

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.