Expansion of Colorado's largest coal mine clears a hurdle

By Dan Elliott, Associated Press

Colorado's flagging coal industry got a glimmer of hope when the federal government removed one obstacle to expanding the state's largest mine, but it isn't a done deal, and further court challenges are likely.

 

DENVER (AP) — Colorado's flagging coal industry got a glimmer of hope when the federal government removed one obstacle to expanding the state's largest mine, but it isn't a done deal, and further court challenges are likely.

Arch Coal Inc. wants to extend its underground West Elk Mine into untapped federal coal reserves in Gunnison County. On Nov. 17, the U.S. Forest Service proposed a ruling that would clear the way for the company to build temporary roads on more than 30 square miles of largely untouched national forest land to facilitate the expansion.

Arch still needs further approvals before it could build roads or expand. And at least one environmental group said it is willing to renew a three-year legal battle to try to block the plan.

"This is a boneheaded proposal, and we're going to do everything we can to enforce some common sense here," said Jeremy Nichols, WildEarth Guardians' climate and energy director. "I think at this point it's looking like the only recourse we might have is to go back to federal court."

West Elk produced 5.1 million tons of coal last year, more than a quarter of the state's total, according to the U.S. Energy Information Administration.

The Forest Service proposal would help West Elk get access to as much as 172 million more tons of federally owned coal, extending the life of the mine by years.

But the company would have to clear several other hurdles, including getting leases from the Bureau of Land Management, which manages the coal.

Arch once had initial consent — but not the final OK — to build temporary roads in the 30-square-mile area under a 2012 state-federal compromise for managing roadless areas in Colorado national forests, called the Colorado Roadless Rule.

But WildEarth Guardians and two other conservation groups sued, saying the federal government failed to examine all the environmental impacts of building the roads, including the effects on climate change of burning the additional coal.

A federal judge agreed with the conservation groups and overturned the approval in 2014.

The Forest Service re-evaluated and concluded that burning the additional coal would produce 443 million metric tons of greenhouse gases. In its Nov. 17 decision, the agency still recommended that Arch be allowed to build the roads, saying that was part of the Colorado Roadless Rule compromise.

Beyond environmental concerns, some critics question the economic wisdom of extending the mine.

"It's going to add more coal to an oversupplied market," said Tom Sanzillo of the Institute for Energy Economics and Financial Analysis, which advocates reducing dependence on coal. "They may go forward, but financially, we don't see the rationale."

Coal production is declining in Colorado and nationwide, driven in part by cheap natural gas prices. The industry also blames President Barack Obama's drive to reduce the use of fossil fuels — especially the Clean Power Plan, which would curtail greenhouse gas pollution from coal-fired plants.

Colorado produced less than 19 million tons of coal last year, down sharply from 24 million the year before and the lowest amount in at least 10 years, according to the Energy Information Administration.

Colorado coal mines employed about 1,600 people in 2015, down from 2,500 three years earlier. Arch said more than 200 people work at the West Elk mine but did not provide more precise number.

Stan Dempsey Jr., president of the Colorado Mining Association, believes a strengthening economy will help the coal industry. He disputes the argument that market forces are behind the decline in demand.

"That's completely wrong. That's a talking point from the environmental community and the Democrats," he said.

Dempsey expects the administration of President-elect Donald Trump to at least take a hard look at coal restrictions enacted under Obama, but he stopped short of predicting an industry comeback.

"Hard to tell," he said.

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