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Show Energy Guide March 2004 Mineral leasing Current mineral leasing activity in Utah reflects the gradual consolidation of mines and operators in Utah, and the gradual depletion of e coal. easy-to-min- The trends suggest the Utah should consider monitor the economic, technological and regulatory conditions under which miners operate, indicates the state energy office's latest coal review and production fore- cast. Aside from existing leases, a diminishing number of larger tracts of coal are available for new tion, noted the state energy of- produc- trends suggest need for provided that SITLA would collect $13 million in coal royalty payments on the Cottonwood tract before reversion to federal control. For the North Horn tract, 100 million tons of coal as reserves could be extracted before the property reverts to the federal government. For the Muddy, in combination with a newly leased Dugout Canyon tract, the tonnage total would be 34 mil- Bureau of Land Management from simultaneously leasing other coal reserves, particularly if doing so could create parcel aggregations large enough for efficient longwall mining, added the state energy office. The Cottonwood tract, located in the Trail Mountain before reversion. Environmental data are being gathered on the North Horn and Muddy tracts, explained the state energy of lion in the Pines area are gradually depleted, pointed out the state energy office. The Grand Staircase ex- change agreement does not preclude the United States area, began as a 1991 lease by application (LBA) by SITLA, BLM monitoring attract greater competitive "bouncing" routinely results as underground coal is removed and the roof is allowed to collapse as the miners' retreat, pointed out the state energy office. A draft U.S. Forest lease interest. North Horn contains one of the largest untapped coal reserves in the Wasatch Plateau, but may be tainted by high levels of sodium. The BLM holds confidential data on North Horn coal which could aid in determining the market value of the mineral, indicated the state energy office. Coal beds in the North Horn extend further west than the tracts acquired by SITLA in the 1998 land swaps and present a target Ser- vice EIS will be released in 2004 that evaluates various options for dealing with the risk, added the coal review and forecast report compiled by the Utah Energy Office. Unlike Cottonwood and Muddy, North Horn is not adjacent to existing facilities and will require an entirely new mine operation as well as more development lead- - for potential future exchanges. The Muddy coal tract was acquired by SITLA in 1998. The fice. But for most of the tracts, environmental studies Muddy is located on the southern of the end Wasatch Plateau and may be cap- andor lease coal stipulations will require years of lead-tim- e. is important to note that Utah's tive to Sufco mine, operated by Canyon Fuel It high mine pro- ductivity relies modern upon Tfl .. longwall equipment that is viable only with large, relatively clean coal seams, pointed out state energy office. A : , r M. - economical $ if- M holes in anticipation of leasing " SITLA t plans to offer the tract for competitive bid for lease as other reserves in "ai j 3 ; the area are longwall mining time-consumi- and often subject to severe restrictions on surface facilities leaves operators with the relatively constrained option of extending existing underground operations. Three tracts of Utah School and Institutional Trust Lands Administration (SITLA) land are of growing interest: the Muddy, North Horn and Cottonwood. The tracts were transferred in part to SITLA as a result of coal reserves exchanged during the creation of the Grand Staircase Escalante National Monument. The transfer agreement fice. There is a question whether a formal environmental impact study (EIS) would be invoked under provisions of the National Environmental Policy Act (NEPA); however, at the very least, such work would have to be done as part of any mine plan approval. Three years of baseline PacifiCorp for the company's d Trail Mountain now-close- mine, with access to occur through the Deer Creek. Coal would be carried across the canyon to the old Cottonwood mine loadout. More recently, industry speculation suggests that PacifiCorp owner Scottish Power may be reconsidering time. Tonnage and royalty estimates were made at an ear- lier time when less was known about the reserves, noted the state energy office. It is possible that, due to a variety of geologic, en- vironmental and evolving market factors, these tracts may be able to produce more or less than the amounts provided by the agreement. the mining assets, perhaps environmental evaluation focusing more closely on the should become available by company's core business of The Cottonwood coal tract spring or determining what, generating power, indicated in was office. would state the conveyed to SITLA by a energy appear stipulations Genwal was outbid by federal land exchange in lease agreements between mine operators and SITLA, PacifiCorp for the Mill Fork 1998. The tract reverts to explained the state energy tract and will need a replace- federal control after $13 milment for the diminishing lion in royalties are received office. EIS compilation for the Crandall Canyon reserves. by SITLA. The North Horn coal tract is has raised Concern been tract expebeing Muddy dited on behalf of Canyon that mining the Cottonwood was acquired by SITLA in 1998 The tract is of special Fuel Company's interest in tract could affect the integtranof dam. eventual because it is not interest the Joes rity Valley smoothing Seismic shaking or captive to a mine and may sition from the Sufco mine de- pleted. Rows of timber appear to guide the viewers eye directly to the smoking tipple at the Clear Creek mine near Scofield The majority of coal production in Castle Valley occurs on federal or SITLA mineral leases. Concerns have surfaced regarding leasing activities, suggesting coal operators may need to be monitored to stabilize company consolidations and mine closure trends while yielding coal sufficiently low in sulfur and sodium, added the state energy office. The fact that the leasing and permitting process is complex, com- recently series of exploration drill number of enough to support Company. Canyon Fuel i pleted a operators and consumers have lack of tracts large ft, im7 coal expressed concerns about the 45 Aside from the Cottonwood, North Horn and Muddy, there are few other readily viable coal tracts available for near-terleasing in the Wasatch Plateau. m situation The change if could new technology al- lows confident mining at depths below current practice or about 2,800 feet of overburden. Small tracts of coal in the San Pitch Mountains and Ferron Canyon area might be viable for exploitation, but only by continuous miner equipment. Severe faulting and other geologic problems make longwall panels uneconomic. SITLA controls more than 115,000 acres of land in Utah, which contains more than 607 million tons of recoverable coal. coal-bearin- g (Continued on page 46) |