Two Utah counties sue Interior over coal leasing moratorium

Two Utah counties, Kane County and Garfield County, plus the Rural Utah Alliance, filed suit Nov. 30 at the U.S. District Court for the District Court for the District of Utah over the Interior Department’s Jan. 15 moratorium on new federal coal reserve leasing, saying this ban is harming the coal industry and one local company in particular.

This is a civil action for declaratory judgment. In particular, the oaintiffs contend that defendants, including Interior Secretary Sally Jewell, have implemented and executed a final agency action, which is arbitrary, capricious, constitutes an abuse of discretion, and is otherwise not in accordance with law, in violation of the Administrative Procedure Act. “The Defendants’ actions have resulted in tremendous harm to the Plaintiffs, as set forth herein. Plaintiffs seek appropriate relief from this Court including a decree invalidating, vacating, or otherwise deeming the action unlawful,” said the complaint.

On Jan. 15, 2016, Jewell, “foregoing any meaningful consultation with any representatives of communities that would be negatively impacted by her actions, unilaterally executed Secretarial Order 3338,” said the complaint. “In the Coal Order, Secretary Jewell directs the BLM to ‘prepare a discretionary Programmatic Environmental Impact Statement (PEIS) that analyzes potential leasing and management reforms to the current Federal coal program.’ The stated purpose of the PEIS is ‘to allow for the continued development of Federal coal reserves while addressing the substantive issues raised by the public, other stakeholders, and the Department’s own review of the comments it has received.’

“The issues were allegedly raised during five ‘listening sessions’ in the summer of 2015. However, the ‘listening sessions’ were informal town hall style meetings that merely allowed the interested parties and members of the public to briefly voice subjective and unfounded ‘concerns.’ The ‘listening sessions’ did not allow for any meaningful or substantive discussion of the coal leasing program. The Secretary appears to have relied exclusively on these amorphous and unfocused ‘listening sessions’ instead of on any objective analysis or report substantively addressing the coal leasing program in order to conclude that there was a need for a complete programmatic overhaul to address concerns over climate change and whether American taxpayers receive a fair return on coal leases.

“Moreover, Secretary Jewell admitted that ‘the precise issues to be assessed in the PEIS will be determined through the public scoping process,’ indicating that the DOI was still unsure of what aspects of the coal leasing program, if any, needed reform. In conjunction with the PEIS, Secretary Jewell took the arbitrary and unwarranted action of directing the BLM to carry out a ‘pause’ on Federal thermal coal leasing until the completion of the PEIS (‘the Moratorium’), halting progress on all pending lease by applications (‘LBA’) yet to receive a Record of Decision/Final EIS.

“In doing so, Secretary Jewell failed to even acknowledge the procedural requirements set forth in the National Environmental Policy Act (‘NEPA’) or to make any factual findings regarding the need for a pre-Moratorium EIS. Secretary Jewell’s unilateral Moratorium undermines the long-standing partnership between the BLM, the State of Utah, and local governments, like Kane and Garfield counties, which has contributed to the effective management of public lands within the State, including management of coal leasing. The lack of meaningful involvement resulted in an act of unwarranted agency overkill. There is no evidence in the Coal Order that Secretary Jewell considered any alternative means to accomplish the objectives she set forth. This includes any alternatives to the Moratorium or its scope.”

Lawsuit says Alton has failed to get emergency relief to save its mining operation

The lawsuit cited the situation of local coal producer Alton Coal Development LLC as an example of moratorium impacts. There was an LBA submitted in 2004 by Alton Coal that was nearing the end of the administrative process, after more than a decade of work, that is now in indefinite limbo, the lawsuit said. “A timely approval of this long-gestating application would have already resulted in millions of dollars of return to the Federal government, the State of Utah, and local governments like Kane and Garfield counties,” it added.

In September 2004, Alton submitted a LBA to the Interior’s Bureua of Land Management (BLM) to lease a federally owned tract, totaling 3,500 acres, under a competitive lease. In June 2006, Alton applied with the State of Utah for a permit to mine in private coal reserves in the southern portion of the privately owned land. That application was approved in November 2009. Alton planned to mine approximately 2,000,000 tons of coal from the mine per year and estimated that the coal reserves would be exhausted within three to five years from the start of mining operations. In early 2011, Alton began mining operations on the privately owned land at the Coal Hollow Mine. In February, Utah gave approval to Alton to expand its operation into a small tract of the northern section of the privately owned land in order to extend the life of the operation for two to three more years.

Alton currently directly employs 52 individuals and generates another 100 jobs in supporting industries, such as trucking, in Kane and Garfield counties. Given the counties’ small populations and workforce, Alton’s presence in the counties represents a major economic stimulus, the lawsuit added. “However, the Coal Hollow Mine operation has nearly exhausted available resources. In order to continue their coal mining operations, [Alton] must expand into the adjacent federally owned lands, as contemplated in the LBA [Alton] submitted to the BLM in 2004.

Before the moratorium, Alton was expecting that the BLM would soon issue approval for the LBA in the form of a Record of Decision and Final EIS. However, the moratorium effectively terminated Alton’s LBA, said the lawsuit, wasting years of effort. In response to the moratorium, and in an attempt to maintain the economic viability of the mine and the dependent counties, Alton filed for an emergency lease with the BLM in May 2016 asking for approval to expand into a 640-acre tract of adjacent federal land, arguing that without approval, Alton would be forced to close their operations in Kane County. In August 2016, Alton’s application for an emergency lease was denied. The BLM claimed that the emergency was “operator created” despite the large amounts of evidence presented by Alton in the emergency application detailing the crushing economic impact of a denial, said the lawsuit.

It added: “The BLM’s denial was not based on relevant data, but was instead an enforcement of Secretary Jewell’s arbitrary policies, as set forth in the Coal Order, limiting coal production and the return to American taxpayers. In addition to the Alton project, the Moratorium has threatened other mining operations in the United States and Utah, including the Williams Draw LBA to expand the Lila Canyon Mine.”

The U.S. Mine Safety and Health Administration database names James Wayland as the controlling party for Alton Coal, with the company’s Coal Hollow surface mine shown as producing 426,748 tons in the first three quarters of this year and 315,693 tons in all of 2015. Alton Coal also has a Burton #1 deep mine in Kane County that briefly produced a minimal amount of coal in 2015 and early this year, and is currently classified by MSHA as “nonproducing.”

Lila Canyon is a deep mine located in Carbon County, Utah, that is operated by coal operator Robert Murray’s Utah American Energy. MSHA data shows Lila Canyon production of 1.1 million tons in the first three quarters of this year and 349,570 tons in all of 2015.

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.