Bowie No. 2 Mine, C , TR 110, Preliminary Adequacy Review Letter 1 message

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1 1/5/2017 State.co.us Executive Branch Mail Bowie No. 2 Mine, C , TR 110, Preliminary Adequacy Review Letter Musick DNR, Jason <jason.musick@state.co.us> Bowie No. 2 Mine, C , TR 110, Preliminary Adequacy Review Letter 1 message Musick DNR, Jason <jason.musick@state.co.us> Thu, Dec 22, 2016 at 2:36 PM To: Bill Bear <BBear@bowieresources.com> Cc: Jim Stover <jestover@bresnan.net>, DNR_DRMS_Coal_Admin <dnr_drms_coal_admin@state.co.us> Good afternoon Bill, Attached is the Division's Preliminary Adequacy Review associated with TR 110 of permit no. C , the Bowie No. 2 Mine. Please let me know if you have any questions or comments. Thanks, Jason Jason Musick Environmental Protection Specialist III Coal Regulatory Program P x 8134 F Sherman Street, Room 215, Denver, CO jason.musick@state.co.us Adequacy_v1.pdf 131K 1/1

2 1313 Sherman Street, Room 215 Denver, CO December 22, 2016 Bill Bear Bowie Resources, LLC P.O. Box 1488 Paonia, CO RE: Bowie No. 2 Mine, Permit No. C Technical Revision Application No. 110 (TR-110) Preliminary Adequacy Review Dear Mr. Bear, The Division received Bowie Resources, LLC s (BRL s) application for a Technical Revision (TR-110) on November 16, The application was determined to be complete on November 23, One comment letter has been received for the proposed action from the Colorado Department of Public Health and Environment Hazardous Materials and Waste Management Division stating that additional information is necessary in order for the Division to determine the applicable requirements under Solid Waste Regulations. In addition, the Division has received 416 public comments associated with the proposed action. Rule (2)(e) allows that a public hearing, for the purposes of determining whether the interests of the public and affected landowners will be protected, may be requested by contacting the Division in writing within 30 days after the last publication of the notice. The Division has received 13 Requests for a Public Hearing as of the date of this letter. No Public Hearing date has been set as of the date of this letter. Due to the receipt of a Pubic Hearing request, the Division will schedule a Public Hearing and BRL will be informed of the scheduled date, location, and time of the hearing. The Colorado Division of Reclamation, Mining, and Safety has completed its preliminary adequacy review of the proposed Technical Revision. Please respond to the following comments or concerns as necessary: 1. Based on the Division s review of TR-110, other licenses or permits may be required to conduct the proposed activities. The Division understands that current licenses and permits are active and in place; however, the currently approved licenses and permits may not include or reference the proposed activities. Per Rule , please submit to the Division a list of all other licenses and permits needed by the applicant to conduct the proposed activity. Please provide evidence that a decision has been made and evidence to ensure that the permit or license is active Sherman Street, Room 215, Denver, CO P F John W. Hickenlooper, Governor Robert W. Randall, Executive Director Virginia Brannon, Director

3 Page 2 2. The proposed TR-110 application states that the Daxiom technology will be used to convert coal mine waste to synthetic gas which is then used to generate electrical power or diesel/fuel oil. Although the Bowie No. 2 Mine has four gob piles (coal mine processing waste) permitted and approved, no discussion of utilizing the coal waste permitted under the Bowie No. 2 Mine is included in the TR-110 application. A discussion as to the origin of the coal waste proposed to be utilized in the Daxiom plant (plant) is required. If the coal waste to be utilized in the plant is to originate from a gob pile permitted by BRL and within the Bowie No. 2 Mine approved permit boundary, please provide the Division with a revised section (8) which provides a revised narrative explaining the construction, modification, use, maintenance, removal, and reclamation of the coal mine waste gob pile to be utilized in the plant. 3. The cover page of proposed exhibit 25 of Volume III states that the maximum thru put of each Daxiom plant unit is 72 tons per day of coal mine waste and the plant can run 24 hours a day, 7 days a week. The Division understands that amount of coal mine waste to equate to 360 tons a day (5 units X 72 tons a day) or 131,400 tons of coal mine waste per year. Based on quarterly Gob Pile inspection reports and the currently approved PAP, approximately three million tons of coal mine waste has been placed in the gob piles since As noted in adequacy comment 2 above, BRL has not stated the origin of the coal mine waste to be utilized in the plant. Currently the approved reclamation plan associated with the gob piles includes filling the area of the gob piles to maximum capacity, grading, suitable material cover, topsoil, and revegetation. If the origin of the coal mine waste is the approved gob piles within the Bowie No. 2 Mine, the approved reclamation plan may be required to be revised. If a revision to the reclamation plan, based on the amount of coal mine waste removed from the gob pile, constitutes a significant change in the reclamation plan a Permit Revision may be required. Please provide to the Division a discussion addressing the amount of any coal mine waste to be removed from any of Gob Pile #1, #2, #3, or #4 to be utilized in the plant. The discussion should include the amount of coal mine waste to be removed chronologically (monthly, quarterly, or yearly). 4. The currently approved permit application package (PAP) identifies 10 emission permits issued by the Colorado Air Quality Control Commission. Based on the information submitted with the proposd TR-110, a revised or new emission permit may be required prior to approval. Per Rule (1)(a) and (b), the application shall contain a copy of the application for such an emission permit and shall contain a description of the steps to be taken, including copies of the permits or permit applications to comply with other applicable State or Federal air quality laws or regulations. Please provide evidence to the Division that a revised or new emission permit has been issued or applied for in accordance with (1)(a) and (b).

4 Page 3 5. Rule 4.13 requires that reclamation efforts of all land disturbed by surface coal mining operations shall occur as contemporaneously as practicable with mining operations. Based on information identified in the proposed TR-110 application, the proposed Daxiom gassification facility will be constructed on the coal stockpile pad once the coal currently on the pad is depleted. Currently, the coal stockpile pad is permitted to serve as a location to stockpile mined coal prior to transport and shipping. If the coal stockpile pad is no longer utilized to store coal as proposed under TR-110 and is revised to house the proposed plant facilities, the reclamation of the pad will not occur as contemporaneously as practicable with mining operations. Please provide to the Division a discussion if BRL proposes to request a variance for delay in contemporaneous reclamation requirements in combined surface and underground Mining operations as required per Rule or justification as to why a variance for delay is not required under Rule As noted in adequacy comment number 2, the proposed TR-110 application states that the plant will utilize coal waste with no discussion on the origin of the coal waste. If it is the case that the origin of the coal waste will be the gob piles permitted under C , Rule shall apply to any person engaged in surface coal mining and reclamation operations who removes or intends to remove more than 250 tons of coal from coal refuse piles within 12 consecutive calendar months in any one location. Currently, Minor Revision No. 187 (MR-187) for the Bowie No. 2 Mine PAP is under review with a Decision extended and not approved by the Division. MR- 187 was submitted to update the ownership and Control information required under Rule In addition, Permit Renewal No. 4 (RN-4) is also currently under review by the Division. RN-4 requires an update of ownership and control information per Rule Per Rule (2), each application shall contain the information required by 2.03, 2.04, 2.05, and If it is the intention of proposed TR-110 to remove more than 250 tons of coal from coal refuse piles within 12 consecutive calendar months, please provide a discussion as to the status of MR-187 to meet the compliance criteria of (2) or provide a discussion as to why Rule (2) is not appropriate for this proposed action. 7. Colorado Wastewater Discharge Permit System Permit No. CO is associated with the discharge at the Bowie No. 2 Mine. The discharge of the area of the proposed plant and the currently approved coal stockpile pad reports to sedimentation pond B, with the outfall a part of the discharge permit. Per Rule (6), surface coal mining operations shall be conducted to meet the applicable State and Federal effluent limitations for all of the mixed drainage in cases where the sedimentation pond is used. Based on the information in the proposed TR-110, the coal stockpile pad and a portion of the proposed facilities will fall under the current discharge permit; however, the gasification plant does not fall within the definition of surface coal mine operations. As such, pond B will receive a mixed discharge from surface coal mine operations and the gasification plant. Please provide a discussion as to how Rule 4.5.2(6) will be addressed under the current discharge permit or if the additional effluent will require a revised discharge permit or a new discharge permit.

5 Page 4 8. As noted in adequacy comment number 2, number 3, and number 5, the proposed TR110 application states that the plant will utilize coal waste with no information concerning the origin of the coal waste to be utilized. If it is the case that the origin of the coal waste will be the coal waste piles approved under C , Rule states that before any refuse is removed from the disposal area, approval will be obtained by the Division. If the coal waste to be utilized will be within the Bowie No. 2 Mine gob piles, please submit a plan for the method of removal, with maps and appropriate drawings to illustrate the proposed sequence of the operation and method of compliance with Rule 4.11 with consideration given in the plan to potential hazards which may be created by removal to persons working or living in the vicinity of the structures. Please note that the plan shall be certified by a qualified engineer per Rule Based on the information submitted in the proposed TR-110 application, the Daxiom process produces a small percentage of inert ash. No discussion is presented in the TR-110 application that provides information as to the disposal or storage of any waste produced by the Daxiom process. Please provide a detailed discussion as to the disposal or storage of any waste that may be generated by the plant and if that waste will require a permit or approval from the Colorado Hazardous Materials and Waste Management Division. 10. The Division understands that BRL is the current lease holder for areas in which coal was mined, processed, and the waste disposed of in one of Gob Piles #1, #2, #3, or #4. No discussion in the proposed TR-110 application provided information as to the right to enter and operation information with regard to the re-mining the coal mine waste. The Division understands that information may be required under Rule (1) as to the description of right to enter and operate documents by type and date of execution and an explanation of the legal rights claimed by the applicant of the coal waste. If it is the intention of BRL to utilize coal mine waste from the Bowie No. 2 Mine gob piles, please provide to the Division information which may be required by the BLM in order to re-mine the gob piles for the purpose of the medium for the plant. 11. In order for the Division to generate a Reclamation Cost Estimate more information is required. The Daxiom plant facility is currently an unknown facility to the Division. The Daxiom coal gasification plant does not fall under the definition of surface coal mine operations; however, the coal stockpile pad which is required to be reclaimed does fall under the definition of surface coal mine operations and is required to be reclaimed. As such, the facilities constructed on the pad will be required to be reclaimed in order to backfill and regrade the coal stockpile pad. In order to develop a cost to reclaim the pad and demolish the associated structures proposed under TR-110, please submit to the Division information on the Daxiom plant and if the plant will generate any hazardous material upon demolition that may require additional permits in order to demolish, remove, and dispose of.

6 Page 5 If you have any questions or comments feel free to contact me. (303) ext 8134 Sincerely, Jason Musick Environmental Protection Specialist Jason.musick@sate.co.us