united states p.o. box 25127 department of lakewood, co...

USDA United States 7?ZZ5 Department of

Agriculture

File Code: 1570-1 Route To:

Forest Service

Rocky Mountain Region

P.O. Box 25127 Lakewood, CO 80225-0127 Delivery: 740 Simms Street Golden, CO 80401 Voice: 303-275-5350 TDD: 303-275-5367

Date: November 4,2011

Subject: ARO Recommendation - Federal Coal Lease COC-61357 Modification Tract 5, Appeal #11-02-00-052 (215) Paonia Ranger District, Grand Mesa-UncompahgreGunnison National Forests

To: Appeal Deciding Officer

As the designated Appeal Reviewing Officer, this is my recommendation on disposition of the appeal filed by lead appellant Jeremy Nichols of Wild Earth Guardians under the regulations at 36 CFR 215. Forest Supervisor Richmond signed the Decision Notice and Finding of No Significant Impact (FONSI) for the Federal Coal Lease COC-61357 Modification Tract 5 on August 3, 2011, and a legal notice of the decision was published in the newspaper of record on August 10, 2011. My recommendation is based on the appeal and the decision documentation (36 CFR 215.18(a)).

BACKGROUND

The Decision Notice (DN) and FONSI are based on the Environmental Assessment (EA) that analyzed the impacts of modifying Federal Coal Lease COC-61357 by adding approximately 157 acres for an estimated 35,000 to 235,000 tons of coal on the Paonia Ranger District in response to an application received by the Bureau of Land Management (BLM) Colorado State Office from Oxbow Mining, LLC (OMLLC). The mine plan prepared by OMLLC proposed removal of the estimated coal reserves over a period of approximately two days to three weeks.

The EA was prepared by the Grand Mesa-Uncompahgre-Gunnison National Forests (USFS), Uncompahgre Field Office of the BLM, and Office of Surface Mining Reclamation and Enforcement (OSMRE) to analyze the impacts of modifying the coal lease. The EA also incorporated, by reference, previous analysis documented in the North Fork Coal Environmental Impact Statement and Record of Decision of March 30,2000.

The coal lease modification area, COC 61357, North East Lease Modification, Tract 5, D-Seam, lies in portions of Sections 32 and 33, T. 12 S., R. 90 W., 6th PM, Gunnison County, Colorado. The modification area includes National Forest System (NFS) surface lands managed by the USFS, Paonia Ranger District. The coal estate is administered by the BLM.

Previous lease modifications (Tracts 1;2, 3 and 4) have accounted for 498.66 acres ofthe total 960 acres available for modification. With Tract 5 (156.77 acres), the remaining area available for lease modification is 304.57 acres.

The BLM is required, by law, to consider leasing federally-owned minerals for economic recovery. With respect to NFS lands, the Forest Service must consider consenting to the BLM

Caring for the Land and Serving People ft

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Appeal Deciding Officer

leasing coal reserves underlying those lands that are under its jurisdiction and prescribe stipulations for the protection of non-mineral resources.

Within the lease modification area, the coal would be accessed and recovered by underground longwall mining methods from the existing Elk Creek Mine. Under the foreseeable mine plan scenario, surface use on this lease modification is not anticipated. All of the lease modification area is within the Springhouse Park Roadless Area.

2

As required by 43 CFR 3420.4-2, the USFS decided to consent to BLM to lease the USFSadministered lands that were included in the Federal Coal Lease Modification COC-61357, Tract 5. In addition to providing consent, the USFS prescribed terms and conditions, identified as stipulations, to protect surface resources on NFS lands to be leased within Tract 5.

The consent decision is conditioned on application of the Notice for Lands of the National Forest System under Jurisdiction of the Department of Agriculture (FS Notice) on the Federal Coal Lease Modification COC-61357, Tract 5, when and ifthe tract is leased. This notice addresses compliance with basic requirements of environmental statutes and USFS special requirements. BLM's and USFS's special requirements can be found in the stipulations in Appendices B and C of the EA.

RELIEF REQUESTED

The Appellants requested the following relief:

1. The Regional Forester must withdraw the Decision Notice and Finding of No Significant Impact providing the Forest Service's consent to the Federal Coal Lease Modification COC-61357, Tract 5.

2. If the Forest Service intends to consent to Federal Coal Lease Modification COC61357, Tract 5, it must prepare NEPA documentation (including opportunities for public involvement and appeal) that complies fully with NEP A, the Clean Air Act, and the Administrative Procedure Act, and that addresses all of the issues raised in this appeal.

3. Any decision on this appeal must include a full response to each issue raised ,in the Statement of Reasons.

4. The Regional Forester must direct Forest Supervisor Charles S. Richmond to refrain from committing any further agency resources to implement or otherwise consent to Federal Coal Lease Modification COC-61357, Tract 5 unless and until the Forest Service complies with all applicable law, as described in paragraphs 1-3, above.

ISSUES AND DISCUSSION


Appeal Issue I: THE FOREST SUPERVISOR VIOLATED NEPA BY FAILING TO DISCLOSE THE IMPACTS OF THE PROPOSED ACTION FROM MINING A HALFMILLION TONS OF COAL OUTSIDE THE LEASE MODIFICATION AREA.

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NEP A requires that agencies analyze in detail the direct, indirect, and cumulative impacts of a proposed agency action. 40 C.F.R. §§ 1508.7 & 1508.8. This inquiry must include an analysis of "direct effects," which are "caused by the action and occur at the same time and place," as well as "indirect effects," which are "later in time or farther removed in distance, but are still reasonably foreseeable." 40 C.F.R. §§ 1508.08; see Idaho Sporting Congo v. Rittenhouse, 305 F.3d 957, 963 (9th Cir. 2002) ("NEPA regulations and caselaw require disclosure of all foreseeable direct and indirect impacts" of a proposed action). In addressing the impacts of a proposed action, both the short-term and long-term effects must be considered. 40 C.F.R. § 1508.27(a).

In addressing the direct impact of its consent to the Lease Modification, the Forest Service states that the lease will result in the removal 35,000-235,000 tons of coal over a two-day to three-week period. Forest Service, Environmental Assessment, Federal Coal Lease COC61357 Modification, Tract 5 (August 2011) at 25 (hereafter "EA"). But the EA also states that the proposed action will permit Oxbow Mining LLC to remove an additional 0.52 million tons of coal outside of the lease modification boundary that would likely otherwise be bypassed were it not for the Lease Modification. Id. at 93 ("BLM's estimate of additional recoverable reserves on the existing lease afforded because of development on the modification would be about 0.52 million tons."); see also D. Dyer, BLM, Combined Geologic and Engineering Report (GER) and Maximum Economic Recovery Report (MER) for Federal Coal Lease COC61357, Tract 5 (Aug. 2010, 2nd Rev. May 2011) ("GERfMER"), attached to EA at 134 ("Additional recoverable reserves on the existing lease afforded because of development on the [Lease Modification] would be about 0.52 million tons."); EA at 25 (characterizing the 0.52 million tons of coal as amounting to "approximately 6 to 7 weeks duration" of additional mining).

Despite the fact that the Lease Modification will make directly available up to 0.24 million tons of coal, and will make available another 0.52 million tons of coal outside of the Lease Modification boundary (for a total of up to 0.76 million tons), the EA fails to disclose the several impacts from facilitating Oxbow's mining ofthe additional 0.52 million tons of coal.

The EA contains no discussion of (or map depicting) the location of the additional half ton of coal that will be mined as a result of the Lease Modification. Neither the public nor the decisionmaker is provided information that would enable them to understand where subsidence or other impacts might occur. No acreage figures are provided, and it is unclear to what extent the half-million tons underlies Forest Service and/or private land.

The EA states that no roadless lands will be degraded by the Forest Service's action because the Lease Modification area will be covered by a "no surface occupancy" stipulation prohibiting surface disturbance for "for exploration, methane drainage, or ventilation and/or escape shafts in the modification area." EA at 106. See also id. at 65 ("the proposed action has a no surface occupancy stipulation (for steep slopes, geohazards and for Roadless values); so no surface disturbing activities, other than subsidence, will take place on. the lease modification area."). But

Appeal Deciding Officer 4

the EA fails to disclose whether Oxbow will be required to build roads, clear pads, and construct methane drainage wells within the Springhouse Park Roadless Area outside of the Lease Modification area to mine the additional half-million tons of coal that the Lease Modification will make available.

The EA appears to address only the air quality impacts arising from the 35,000-235,000 tons of coal to be mined within the Lease Modification's boundaries, not the additional half-million tons to be mined as a result of the Lease Modification.

The EA predicts only the GHG emissions that will result from the combustion of coal mined in the Lease Modification area, not the additional 0.52 million tons of coal that the Lease Modification will make possible. See EA at 52-53.

It does not appear that any previously-prepared NEP A document has disclosed the impacts of air and pollutants emitted from the Elk Creek Mine's ventilation system and methane drainage wells.

Neither the Forest Service nor any other agency has disclosed the impacts ofthe current mine plan in any NEP A document, since that plan was changed in February 2011. See EA at 134 (BLM's GERlMER) ("In February of2011 a ground failure event caused a change in mine plans .... "); id. at 92 (same).

The Forest Service failed to disclose the indirect impacts of the agency's consent to the Lease Modification, which will permit Oxbow to access an additional half-million tons of coal it would likely otherwise be unable to remove. The Forest Service must address the impacts of removing that additional half-million tons of coal on remand in a subsequently prepared NEP A document that is made available for public comment.

Rules:

40 CFR § 1508.7 - "Cumulative impact" is the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions. Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.

40 CFR § 1508.8 - Effects and impacts as used in these regulations are synonymous. Effects includes ecological (such as the effects on natural resources and on the components, structures, and functioning of affected ecosystems), aesthetic, historic, cultural, economic, social, or health, whether direct, indirect, or cumulative. Effects may also include those resulting from actions which may have both beneficial and detrimental effects, even if on balance the agency believes that the effect will be beneficial.

40 CFR § 1508.27 - ... "significantly" as used in NEPA requires considerations of both context and intensity ... (a) Context. .. Significance varies with the setting of the proposed action. For


instance, in the case of a site-specific action, significance would usually depend upon the effects in the locale rather than in the world as a whoie. Both short- and long-term effects are relevant.

Discussion:

The Appellant mischaracterizes recent actions by the BLM and USFS for the Elk Creek Mine.

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In December 2010, the USFS sent out a scoping notice regarding a modification to the existing Federal Coal Lease COC-61357 to add 157 acres (Tract 5) of National Forest System lands to facilitate the mining of the existing D-seam reserves on the parent lease. The addition of Tract 5 on the northeast comer of the mine would enable the Elk Creek Mine to consider an additional sixth panel to its mine design. The modification to include Tract 5 would <;ontribute between 35,000-235,000 tons of coal to the parent lease. Access to the additional D-seam reserves is expected to take place from the existing D-seam, Tract 1. Tract 1 was analyzed in the North Fork Coal EIS of2000 (Tab 4). The D-seam is the primary mineable coal.

The concern raised by the Appellant in their appeal regarding the mining of an additional 0.52 million tons of coal on the parent lease was not raised during the comment period (Tab 10). The lease modification, Tract 5, would facilitate safer and more logical mining of 0.52 million tons of previously leased reserves on the parent coal lease with the additional sixth panel (Tab 2, page 16).

In 2008, the BLM prepared an EA for the Elk Creek East Tract Coal Lease (COC-70615); this tract provided a logical extension of the Elk Creek Mine's D-seam workings within the current mine. This was a Lease by Application (LBA) for approximately 786 acres ofBLM-managed surface and mineral estate on the southeast side ofthe mine (and south ofUSFS boundary). The proposed action associated with the above LBA was to continue mining operations into the additional area. As a result, the production rate of the Elk Creek Mine would be lowered from 4.8 million to 3.96 million tons of coal annually (Tab 12).

• Removal of an additional 0.52 million tons of coal outside ofthe lease modification boundary

The Appellant states "The Forest Supervisor violated NEP A by failing to disclose the impacts of the proposed action by mining a half-million tons of coal outside the lease modification area." The half-million tons of coal is associated with the parent lease, but is addressed in the EA because the lease modification for Tract 5 will allow for the efficient and effective recovery (and logical development) ofthe coal seam. There is disagreement between BLM and Oxbow Mining, LLC (OMLLC) whether this quantity of coal would be mined on the parent lease with or without the lease modification; but, effects were disclosed in the EA (Section 3.2) such that either scenario may apply (DN, page 5). The 0.52 million tons of previously leased coal that could be developed with this modification to the lease area was evaluated as part of the baseline condition; the impacts of authorizing OMLLC to mine coal from the parent lease (including the aforementioned 0.52 million tons) was previously analyzed (North Fork Coal EIS, Tab 4 and USFS Record of Decision, Tab 5). In OMLLC's application, MSHA approved a change to a 5-panel design within the existing lease boundary. By adding Tract 5, a 6th panel can be added, which would facilitate the mining of the additional coal in the parent lease (Tab 8; June 1,2010 application).


• "no surface occupancy" stipulation

Appellant states that "[n]either the public nor the decision maker is provided information that would enable them to understand where subsidence or other impacts might occur." However, the EA identified past, present and reasonably foreseeable actions:

EA, 3.1, page 41: 3.1 Past, Present and Reasonably Foreseeable Actions: With respect to surface disturbance, only subsidence (lowering of the land surface) is expected on the lease modification area; surface facilities are not expected, nor will be allowed.

And, in the North Fork Coal EIS (Tab 4, Section 1.9), reasonably foreseeable coal mining activities: ... typically, [lease] modifications do not involve any substantial surface disturbance or additional impacts over and above the existing operation.

Significance exists if it is reasonable to anticipate a cumulatively significant impact on the environment. In consenting to authorize BLM to modify the lease area with an additional 157 acres (proposed action), the USFS has determined there will be little to no surface disturbance, and, therefore, impacts were not determined to be significant within the context or setting of the proposed action. This is also addressed in the Decision Notice (Tab 3). Subsidence and other surface-related issues are covered in the Decision Notice under Appendix B-Stipulations for National Forest System Lands Federal Coal Lease COC-61357 and Appendix C-Federal Coal Lease COC-61357.

In the EA, Response to Comments - Conduct an EIS because the effects are significant: The agencies feel that a proposal that has no impacts or very minimal surface impacts from subsidence [only] is not a significant action requiring the preparation of an EIS.

Also, the Appellant is concerned about whether OMLLC will be allowed to build roads, clear pads, and construct methane drainage wells within the Springhouse Park Roadless Area outside of the Lease Modification area to mine the additional half-million tons of coal. Again, this is covered in the EA (Tab 2) and Decision Notice (Tab 3). As described in the Decision Notice (Tab 3, Appendix C), consenting to the lease does not result in any direct effects to the land surface of the lease tract. Furthermore, the "no surface occupancy" stipulation applies to all NFS lands within the Springhouse Park Roadless Area.

EA, 1.2, Background of this Lease Modification, pgs 15-16: ... stipulations would be carried forward from the existing (parent) lease including a stipulation for activities in roadless areas ...

The coal lease was modified in December 2008. Appendix B ofthe permit includes the stipulations that were updated on the parent lease of2001 (Tab 7) and in the Decision Notice (Tab 3, Appendix C). One of the stipulation changes included "roadless", which would apply to the USFS portion on both the parent and any lease modifications. The area includes the Springhouse Park Inventoried Roadless Area and is subject to applicable restrictions.


• Disclosure o(the impacts o(air and pollutants emitted

The Appellant states, "[i}t does not appear that any previously-prepared NEP A document has disclosed the impacts of air and pollutants emitted from the Elk Creek Mine's ventilation system and methane drainage wells." The EA, under Other Related Efforts (Tab 2; page 24) references previous NEP A analysis incorporated into the document, specifically identifying application for lease modifications as foreseeable actions. The Appellant states that methane and greenhouse gas (GHG) emitted from the half-million tons of coal outside the lease modification was not included in the analysis of the EA. Under the parent lease, any air quality analysis pertaining to methane and GHG is covered under Section 3.1 and Appendix M of the North Fork Coal EIS (Tab 4).

Recommendation:

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The environmental analysis adequately addresses the impacts of the proposed action from mining a half-million tons of coal outside the lease modification area. The Decision Notice met the requirements of 40 CFR § 1508.7,40 CFR § 1508.8, and 40 CFR § 1508.27. The record supports the deciding officer's decision. Therefore, I recommend that the Forest Supervisor's decision be affirmed on this point.

Appeal Issue II: THE FOREST SERVICE VIOLATED NEPA BY FAILING TO ANALYZE REASONABLE ALTERNATIVES TO REDUCE THE METHANE POLLUTION OF THE COAL LEASE.

When the Forest Service issues an EA, it must take a "hard look" at the project's environmental impacts and the information relevant to its decision. Forest Guardians v. U.S. Fish & Wildlife Serv., 611 F.3d 692, 711-12 (lOth Cir. 2010). In taking the required "hard look," an EA must "study, develop, and describe" reasonable alternatives to the proposed action. 42 U.S.C. § 4332(2)(E); Native Ecosystems Council v. U.S. Forest Serv., 428 F.3d 1233, 1245 (9th Cir. 2005); 40 C.F .R. § 1508.9(b) (an EA "[ s ] hall include brief discussions ... of alternatives"). This alternatives analysis "is at the heart of the NEPA process, and is 'operative even if the agency finds no significant environmental impact. '" Dine Citizens Against Ruining Our Env't v. Klein, 747 F. Supp. 2d 1234, 1254 (D. Colo. 2010) (quoting Greater Yellowstone Coal. v. Flowers, 359 F.3d 1257, 1277 (10th Cir. 2004)), appeal dismissed, No. 11-1004,2011 WL 3793969 (lOth Cir. Aug. 26, 2011); see also 40 C.F.R. § 1502.14. Accordingly, "[i]nformed and meaningful consideration of alternatives" is "an integral part of [NEP A's] statutory scheme." Bob Marshall Alliance v. Hodel, 852 F.2d 1223, 1228 (9th Cir. 1988).

The Forest Service's failure to analyze reasonable alternatives to limit GHGs while consenting to the Lease Modification ignores all of this guidance and results in an inadequate consideration of a substantial environmental question of material significance to the proposed action, violating NEPA.


Despite the significant impacts the EA predicts that climate change will likely have on the GMUG National Forest, and the Forest Supervisor's commitment to "lead the charge" in "explor[ing] options" that would reduce the level of wasted methane from coal mines, the Forest failed to analyze adequately such measures.

Rules:

42 USC § 4332(2)(C) - utilize a systematic, interdisciplinary approach which will insure the. integrated use of the natural and social sciences and the environmental design arts in planning and in decisionmaking which may have an impact on man's environment.

30 CFR § 740 - Surface coal mining and reclamation operations on lands containing leased Federal coal shall be conducted in accordance with the requirements of the terms, conditions and stipulations of the lease issued under the Mineral Leasing Act and its implementing regulations in 43 CFR parts 3400, as applicable, and the mining plan.

30 CFR § 906.30 V(D)(I) - Determine whether the permit application or application for a permit revision or renewal provides for post-mining land use consistent with FLMA's land use plan and determine the adequacy of measures to protect Federal resources under FLMA' s jurisdiction not covered by the rights granted by the Federal coal lease.

40 CFR§ 1502.14 - NEP A does not require that "all" alternatives be considered, only those which are "reasonable". Nor does NEP A require mitigation for every adverse impact, only those which are "appropriate".

40 CFR § 1502.16 - This section forms the scientific and analytic basis for the comparisons under § 1502.14. It shall consolidate the discussions of those elements required by sections 102(2)(C)(i), (ii), (iv), and (v) ofNEP A which are within the scope ofthe statement and as much of section 102(2)(C)(iii) as is necessary to support the comparisons. The discussion will include the environmental impacts of the alternatives including the proposed action, any adverse environmental effects which cannot be avoided should the proposal be implemented, the relationship between short-term uses of man's environment and the maintenance and enhancement oflong-term productivity, and any irreversible or irretrievable commitments of resources which would be involved in the proposal should it be implemented. This section should not duplicate discussions in §1502.14.

40 CFR § 1506.3(a) - An agency may adopt a Federal draft or final environmental impact statement or portion thereof provided that the statement or portion thereof meets the standards for an adequate statement under these regulations.

40 CFR § 1506.3(b) - If the actions covered by the original environmental impact statement and the proposed action are substantially the same, the agency adopting another agency's statement is not required to re-circulate it except as a final statement.

40 CFR § 1508.9(b) - "Environmental assessment": shall include brief discussions of the need for the proposal, of alternatives as required by section 102(2)(E), of the environmental impacts of


the proposed action and alternatives, and a listing of agencies and persons consulted.

43 CFR § 3432. 3 (a) and (d) - Forest Service authority to attach appropriate lease stipulations to a coal lease modification.

Mineral Leasing Act 0[1920. as amended (30 U.S.C. 181 et seq.) authorizes and governs leasing of public lands for development of deposits of coal ...

Surface Mining Control and Reclamation Act - 30 USC 1291(28)-(28) "surface coal mining operations" means --

Background:

(A) activities conducted on the surface oflands in connection with a surface coal mine or subject to the requirements of section 516 surface operations and surface impacts incident to an underground coal mine, the products of which enter commerce or the operations of which directly or indirectly affect interstate commerce. Such activities include excavation for the purpose of obtaining coal including such common methods as contour, strip, auger, mountaintop removal, box cut, open pit, and area mining, the uses of explosives and blasting, and in situ distillation or retorting, leaching or other chemical or physical processing, and the cleaning, concentrating, or other processing or preparation, loading of coal for interstate commerce at or near the mine site: Provided, however, That such activities do not include the extraction of coal incidental to the extraction of other minerals where coal does not exceed' 16 2/3 per centum of the tonnage of minerals removed for purposes of commercial use or sale or coal explorations subject to section 512 of this Act; and

(B) the areas upon which such activities occur or where such activities disturb the natural land surface. Such areas shall also include any adjacent land the use of which is incidental to any such activities, all lands affected by the construction of new roads or the improvement or use of existing roads to gain access to the site of such activities and for haulage, and excavations, workings, impoundments, dams, ventilation shafts, entryways, refuse banks, dumps, stockpiles, overburden piles, spoil banks, culm banks, tailings, holes or depressions, repair areas, storage areas, processing areas, shipping areas and other areas upon which are sited structures, facilities, or other property or materials on the surface, resulting from or incident to such activities;

Oxbow Mining, LLC (OMLLC) operates the Elk Creek Mine under a construction permit that was issued by the Colorado Department of Public Health and Environment (CDPHE), Air Pollution Control Division (APCD) on July 29,2009. The permit is valid for a period of 5 years until July 29,2014. The permit sets limits on the following: PMlO, nitrogen oxides (NOx), and carbon monoxide (CO). A detailed air quality assessment, including modeling of the original lease, was conducted as part of the environmental analysis for the Elk Creek Coal Lease Tract in 2000 (North Fork Coal FEIS, Tab 4). In this FEIS, an air quality assessment was completed for the original Oxbow mine, which was permitted by the State to produce up to 4.8 million tons of


coal annually (Section 3.1 and Appendix M, North Fork Coal FEIS, Tab 4). This section of the FEIS identifies the permitted mining processes at Oxbow Mine and the emission increases included in the modeling (Section 3.1.3).

Methane emissions in working mines arise when methane is released as a direct result of the physical process of coal extraction and from the collapse of the surrounding rock strata after a section of the coal seam has been mined and the artificial roof and wall supports are removed as mining progresses to another section. The debris resulting from the collapse is known as gob and also releases methane or 'gob gas' into the mine.

All aspects of the atmosphere in underground mines, including methane concentration and removal, are regulated by the Mine Safety Health Administration (MSHA) under the Federal Mine Safety & Health Act. The specific regulations cover such subjects as ventilation plans, permissible methane limits, fire prevention, drilling, and electricity, use of equipment, personal protection, and control of air quality.

Mining underground coal deposits releases large quantities of methane into the mine workings, which must be removed by diluting the methane with large volumes of air. In-mine methane concentrations must be maintained well below the lower explosive limit, so ventilation air exhausts at mines carry only very dilute concentrations of methane (typically below 1 % and often below 0.5%). Because of mine safety concerns, there are no federal or state regulations which control or prohibit the venting of mine methane into the atmosphere. Efforts to put the gas to any beneficial use, or to reduce its impact on the environment, are strictly voluntary by the mine operator.

The ventilation systems move the diluted methane out of the working areas of the mine into shafts leading to the surface. The methane removed from working mines via this technique is known as Ventilation Air Methane (V AM). The V AM is released through the ventilation shafts and can then be destroyed or captured for utilization rather than allowing it to be released directly into the atmosphere, as may have occurred in the past. V AM has the lowest concentration levels of all forms of recoverable methane from coal seams because of its high exposure to air; often displaying levels of 0.05-0.8%.

Many mines also drain methane by drilling boreholes into the coal seams and surrounding strata in advance of mining. The mines then pipe this methane to the surface. To pre-empt the release of gob gas from post mining collapse, it is possible for vertical gob wells to be drilled directly into the coal seam's surrounding strata before mining activities pass through that section. These pre-drilled wells can then remove the gob gas once the collapse takes place, thus avoiding the release of methane directly into the mine. The gob gas can then be destroyed or captured for utilization via the wells, rather thim allowing it to be released directly into the atmosphere. As gob gas is exposed to significantly lower volumes of air than V AM, it displays much higher methane concentration levels - typically between 35-75%.

Discussion:


Under Appeal Issue II, the Appellant claims the Forest Service did not consider reasonable alternatives to the proposed action.

• An EA must "study. develop. and describe" reasonable alternatives to the proposed action

11

The Appellant misquotes many of the statutes and regulations or provides the incorrect citation in its NEP A challenges. NEP A does not require that "all" alternatives be considered, only those which are "reasonable" (40 CFR§ 1502.14) and within the scope of the statement (40 CFR§ 1502.16) encompass those [alternatives] to be considered by the ultimate agency decisionmaker (40 CFR § 1502.2 (e)) for the purposes of "sharply defining the issues and providing a clear basis for choice among options by the decisionmaker and the public" (40 CFR § 1502.16).

Nor does NEP A require mitigation for every adverse impact, only those which are "appropriate" (40 CFR § 1502.14(f) and 40 CFR § 1502.16(h)). The discussion should include "any adverse environmental effects which cannot be avoided should the proposal be implemented, the relationship between short-term uses of man's environment and the maintenance and enhancement of long-term productivity, and any irreversible or irretrievable commitments of resources which would be involved in the proposal should it be implemented" (40 CFR § 1502.16).

Alternatives are designed to achieve the basic aims of the proposed action by different means, while eliminating or lessening the adverse environmental consequences of that action. Mitigation measures are the terms and conditions developed to eliminate or lessen any adverse environmental impacts that cannot be avoided if the proposed action or a preferred alternative is authorized. The actions, discussed here, brought forward by the Appellant in the comment period and in the appeal are, in reality, not "alternatives to the proposed action" as defined above, but are mitigation measures that could be implemented if the proposed action is authorized (see Appeal Issue III).

The EA considered reasonable alternatives that met the purpose and need (were within the "scope") and discussed adverse effects. Alternatives considered in detail included the No Action and the Proposed Action alternatives (Section 2.1, EA). There were three alternatives considered but eliminated from detailed study (Section 2.2, EA).

As described in the Decision Notice (Tab 3, Appendix C), consenting to the lease does not result in any direct effects to the land surface of the lease tract. No surface occupancy will be allowed. Lease stipulations were prescribed for cultural and paleontological resources; endangered or threatened species; Canada lynx, raptors, big game winter range, water depletions, breeding birds, geologic hazards, baseline studies, monitoring requirements, riparian, wetland or floodplain, subsidence, roadless and visuals. These stipulations could require surveys and monitoring offNFS lands where off-site surface disturbance adjacent to the lease tract may impact resources located on NFS. The lessee is required to establish a monitoring system to locate, measure, and quantify the progressive and final effects of underground mining activities on the topo'graphic surface, subsurface and surface hydrology, soils and vegetation.


• Analyze reasonable alternatives to limit greenhouse gas (GHG)

• "exploring options" that would reduce the level of wasted methane

In Sections 2.2 and 3.2.ofthe environmental analysis, there is discussion of mitigation measures related to methane release and climate change.

A cumulative effects discussion regarding Greenhouse Gas (GHG) emissions would not provide practical or meaningful effects analysis for the deciding officer. Consenting to the lease modification and the expected emissions associated with extending the duration of mining from 2 days to 3 weeks is not expected to exceed the current rates of permitted/regulated pollutants from the parent lease.

EA, 3.2, Air Quality, starting on page 41 : No data is available regarding current ambient methane concentrations in air, because methane is not yet a regulated constituent.

The values used to estimate methane emissions included in the analysis were based on values associated with averages from 2009 and 2010 as reported to MSHA and submitted to EPA. This data is somewhat non-representative of over-all operations in the North Fork because methane at this mine is the direct result ofthe depth of over-burden. Where over-burden is the deepest, the methane emissions are the highest and where over-burden is the shallowest, the methane emissions are nearly non-existent.

EA, 3.2, Air Quality, page 46: A detailed air quality assessment, including modeling, of the original mine was conducted as part of the environmental analysis for the Elk Creek Coal Lease Tract in 2000 (North Fork Coal EIS). The air quality analysis conducted for the original mine included an emissions inventory and modeling analysis. That emissions inventory quantifies PM 10, NOx, and S02 emissions. The modeling analysis also includes a visibility impacts assessment in the West Elk Wilderness Area (Class I Area) as well as an atmospheric deposition impacts assessment. Emissions that were calculated and modeled included tailpipe emissions from mining equipment, haul trucks, and locomotives (railway emissions). The results of that detailed impact assessment predicted no significant impacts to air quality as a result of authorizing the Oxbow Mine.

EA, 3.2, Air Quality, page 46: Preliminary modeling results using EPA's SCREEN3 air model indicate that methane concentrations from existing methane drainage wells '" would still be below the Mine Safety and Health Administration (MSHA) level of 1 %. No new methane drainage wells will be needed for mini~g this lease modification area.

EA, 3.2, Greenhouse Gases, beginning on page 45: Potential impacts may occur from reasonably foreseeable activities related to subsequently mining the lease modification such as continued methane drainage on the


parent lease, continued use of coal fired power plants around the United States and other countries, and coal transportation to places where coal is used.

EA, 3.2, Environmental Consequences Proposed Action, Greenhouse Gases, page 52, Gaseous emissions in the form of methane from methane drainage wells and other ventilation activities would continue on parent lease and other leases but not on the lease modification as during the mining of coal in the lease modification from all systems including: vertical wells/gob vent boreholes (MDWs) and main mine fans. No new methane drainage wells will be needed for mining this lease modification area.

EA, Comparison of Alternatives, Air Quality, Table 2.3: The Proposed Action - same as No Action Alternative except duration extended 2 days to 3 weeks based on additional quantity of coal in lease modification. No Action - continued release of methane and other permitted/regulated pollutants at current rates from parent and other leases and private lands. .

Specifically, the Appellant claims the following alternatives for limiting greenhouse gas emissions were not adequately considered: methane flaring, ventilation air methane (V AM) oxidation, methane capture and use, and carbon credits.

The Appellant brought forward these mitigation measures during the comment period. All of the suggested mitigation measures would be effective in reducing GHG emissions. However, none of these potential mitigations can occur on the lease modification area, and it is extremely unlikely that these would occur on leases already analyzed and issued under the North Fork Coal EIS (Tabs 4 and 5) and in the parent lease of2000. On NFS lands, a stipulation requires no surface occupancy for exploration, methane drainage, or ventilation and/or escape shafts in the Elk Creek coal mining area. The North Fork Coal EIS addressed surface methane venting through gob vent boreholes.

EA, 3.2, page 47, GHG Possible Mitigations for All Alternatives: Direct mitigations for the release of methane, as brought forward by environmental groups during the comment period, include either flaring, capturing methane and putting to beneficial use or ventilation air methane capture. All would be very effective in reducing greenhouse gas emissions. None of these potential mitigations would occur on the lease modification (as surface use is not permitted) and it is extremely unlikely that

. these would occur on leases analyzed and issued under the North Fork Coal EIS and issued in 2000 (parent lease COC-61357) which addressed surface methane venting through gob vent boreholes. However, they may occur on other pending leases or on OMLLC's private lands.

Further, since methane is not regulated, nor have any standards been promulgated by EPA, the federal agencies (BLM, Forest Service, OSMRE, MSHA, MMS and EPA) and state agencies with delegated authority (DRMS and CDPHE) operating within their jurisdiction in the federal coal program cannot currently require flaring or capture as a mitigation measure on a previously approved lease. This situation is currently under review by many State and Federal Agencies and may change based on new regulations or


interpretation by the courts. However, since groups are interested in these activities they have been summarized below, but are outside the scope of this decision as these activities would not occur on the lease modification tract but do form part of the existing operating considerations.

DN, Mitigation Measures & Methane Venting, page 5: Commenters further contend that the Forest Service should force OMLLC to capture or/use methane vented to the atmosphere. Methane venting will not occur on the lease modification due to surface occupancy restrictions; however, it is not precluded on the parent lease, or other portions of the mine's permit area. Additional discussion can be found in the EA, Section 3.2. Methane is currently an unregulated constituent under the Clean Air Act as managed by the Environmental Protection Agency (EPA) and through their agent Colorado Department of Public Health and Environment (CDPHE). I agree capturing or using methane would beneficial; however, the Forest Service is not a permitting agency for underground coal mining activities nor do we have the authority to promulgate or enforce air quality regulations pursuant to the Clean Air Act. Since methane is released as a by-product of mining approved by other state and federal entities, I would be exceeding my authority by requiring such mitigation under 43 CFR 3432.3(d), other laws, and agency memorandums of understanding which specify that my role is to consent to leasing and prescribe protections for NFS surface resources.

Appeal Issue II-A: THE EA FAILS TO ANALYZE OXIDATION OF VENTILATION AIR METHANE AS A REASONABLE ALTERNATIVE TO REDUCE THE LEASE'S METHANE POLLUTION.

The largest source of methane emissions from approving the Lease Modification will be from the Mine's ventilation system. This methane pollution, known as ventilation air methane ("V AM"), is distinct from methane removed by methane drainage wells. At the Elk Creek Mine, V AM accounted for 75% of all methane emissions between 2004 and 2006; in a recent environmental assessment for another expansion of this mine approved just a few months ago at Elk Creek, BLM stated that it expects similar rates of methane emissions at the Mine in the future.

The Forest Service declined to consider in detail an alternative that would require Oxbow to mitigate or eliminate V AM emissions despite the multiple examples of successful V AM mitigation measures. EA at 32-33. Data demonstrates that VAM reduction technologies are likely technically feasible at the Elk Creek Mine. Mine Safety and Health Administration ("MSHA") data from 2008 to 2009 shows that the Mine is producing methane in· sufficient concentrations to operate a V AM oxidizer.

The EA contains a handful of reasons for dismissing V AM reduction as an option. But all of the EA's excuses lack support. The EA's failure to fully and fairly evaluate an alternative that would include a requirement that Oxbow reduce or eliminate methane in V AM emissions is arbitrary and capricious and must be set aside.


The EA asserts that "[a]lternatives that address VAM destruction are duplicative of either the No Action or Proposed Action alternatives as these are possible mitigation measures that may be implemented by OMLLC on their existing leases, private land or new BLM lease, but not on the lease modification due to the No Surface Occupancy stipulations." EA at 33. See also EA at 48 ("None of these potential [methane] mitigations would occur on the lease modification .... ").17 The Forest Service is apparently taking the position that the agency can only require measures to reduce the environmental impacts of the Lease Modification if those measures occur on the lease parcel itself. The Forest Service provides no support for this contention. The Forest Service has the authority to "attach[] ... appropriate lease stipulations" to a lease modification. 43 C.F.R. §3432.3(d). The Forest Service fails to explain what provision oflaw or policy requires that these stipulations preventing harm to the lease modification area must require the lease-holder to implement mitigation measures within the lease parcel. In any event, the EA certainly fails to provide an explanation for why this would be so.

The Forest Service argues that because "methane is not regulated," the Forest Service cannot require flaring or other mitigation measures. EA at 47. The Supervisor also states that mitigating methane's impacts via "capture" would be "exceeding my authority by requiring such mitigation under 43 CFR 3432.3(d), other laws, and agency memorandums of understanding which specify that my role is to consent to leasing and prescribe protections for NFS surface resources." DN & FONSI at 6. This ignores the Forest Service's broad authority to "attach[] ... appropriate lease stipulations" to a lease modification. 43 C.F.R. § 3432.3(d)

The EA contains a host of erroneous or unsupported rationales for declining to consider in detail the alternative of requiring Oxbow to adopt V AM technologies to reduce methane pollution.

Discussion: Also, see above discussion under Appeal Issue II.

Mitigation of ventilation air methane (V AM) is discussed in Sections 2.2 and 3.2 of the EA.

EA, 3.2, Ventilation Air Methane (V AM) Capture, pages 49-50: OMLCC's ventilation air flow quantity (~960,000 cfs) is much higher than anything that has to date been demonstrated as effective with this technology (World Coal 2010). The agencies involved in this analysis do not know if V AM destroyers on the market are compatible with the specific design ofOMLCC's MSHA-approved ventilation system (EPA 2010). If the capacity, design and feasibility of a V AM system were addressed by permitting agencies, there would still be a concern that this technology would require large acres of disturbance for surface facilities including roads and utilities.

Further, according to a recent MSHA report, this mine is not potentially attractive for V AM technologies (US EPA 2010).

Conclusion and Recommendation:

There is no specific authority in the Mineral Leasing Act, the regulations under the Act, or elsewhere, that addresses the mitigation of methane that must be removed from underground coal mines. The USFS analysis shows that the deciding officer understood both the environmental


benefits of destroying or capturing ventilation air methane from the mine and the overriding need to protect the safety of underground miners. The USFS "no surface occupancy" stipulation for the lease modification places the suggested alternative methods to capturing methane outside the jurisdiction of the agency. Possible mitigation measures may be implemented by OMLLC on their existing leases, private land, or new BLM lease, but not on this lease modification due to the No Surface Occupancy stipulations.

Furthermore, due to the size of the lease modification (and associated recoverable coal reserves) relative to the existing parent lease, and considering the degree to which the lease modification would extend the life of the entire mining operation, the proposed action will not cause significant additional impacts beyond what is permitted under the parent lease; therefore, the effects of the proposed action, as well as the alternatives discussed, essentially do not differ from the no action alternative.

The environmental analysis adequately addresses whether V AM oxidation is a reasonable alternative to the proposed action. The record supports the deciding officer's decision. Therefore, I recommend that the Forest Supervisor's decision be affirmed on this point.

Appeal Issue II-B. THE EA FAILS TO SUFFICIENTLY ANALYZE METHANE FLARING AS A REASONABLE ALTERNATIVE.

The Elk Creek Mine removes methane not only through ventilation systems (as V AM), it also vents methane through drainage wells. Coal mine methane from drainage wells can be combusted, or flared, before it enters the atmosphere. Flaring results in 7.5 times fewer GHG emissions than venting methane directly into the atmosphere. Despite the potential benefits of methane flaring, the Forest Service dismissed detailed consideration of a flaring alternative without a rational basis. Methane flaring, however, is a reasonable, practical, effective, and feasible alternative to reduce the Lease Modification's GHG emissions.

The EA should have analyzed a flaring alternative in detail because such an alternative would allow Oxbow to produce the coal within and adjacent to the Lease Modification, thereby fulfilling the project's purpose and need, while reducing the damaging impacts of methane pollution. The EA's stated explanations for failing to do so are arbitrary and capricious.

The EA states the flaring cannot be implemented in the Lease Modification area because of the . no surface occupancy stipulation. EA at 33, 47. While it is true that the NSO stipulation would

prevent methane drainage wells - and thus flaring - within that area, nothing prevents the Forest Service from stipulating that any methane drained as a result of the Lease Modification should be flared. Given that, according to BLM, a half-million tons of coal could be mined outside of the Lease Modification as a result of the Forest Service's consent, it is likely that methane drainage will be required to safely mine that coal.31 The EA fails to address or depict the location of any methane drainage wells in the vicinity ofthe Lease Modification. Further, the Forest Service has authority to compel lease-holders to protect National Forest resources with lease stipulations, even if the harm will occur off the lease. See supra at 14.


Methane flaring is a reasonable, practical, effective, and feasible alternative to reduce GHG pollution that would allow for the accomplishment of the Lease Modification's purpose and need. The Forest Service's conclusory dismissal of a methane flaring alternative, based on an arbitrary analysis and little valid evidence, violates NEPA. See, e.g., Davis v. Mineta, 302 F.3d 1104, 1122 (lOth Cir. 2002) (agency cannot reject an alternative as unreasonable or infeasible with little or no documents in the record supporting its conclusion); Wilderness Soc'y, 524 F. Supp. 2d at 1311-12 (overturning agency when no evidence in the record supported the agency's conclusion that an alternative was infeasible).

Discussion: Also, see above discussion under Appeal Issue II and II-A.

Flaring involves destroying gas that would otherwise be released directly into the atmosphere. Flaring is an important technology for disposing of the methane safely and efficiently and can help to significantly reduce a major source of GHG emissions. Flared methane is converted to CO2, heat and water.

Mitigation of methane emissions via flaring is discussed in Sections 2.2 and 3.2 ofthe EA.

EA, 2.2, Alternatives Considered but Eliminated from Detailed Study, page 33: Alternatives that address flaring and methane capture are duplicative of either the No Action or Proposed Action alternatives as these are possible mitigation measures that may be implemented by OMLLC on their existing leases, private land or new BLM lease, but not on the lease modification due to the No Surface Occupancy stipulations. CEQ NEP A regulations describe this situation as having been covered by prior environmental review (40 CFR § 1506.3).

EA, 3.2, GHG Possible Mitigations for All Alternatives, page 48: ... [W]hile flaring pure, or nearly pure, concentrations of methane results in a large greenhouse gas emission reduction, other inert constituents in the gas flared can become criteria pollutants. For this project, inert constituents are estimated to be between 6 and 77% (based on methane concentrations in the North Fork) which when flared with the methane result in nitrogen oxides and carbon monoxide which are criteria pollutants. The resulting CO2 emissions still present a huge challenge in terms of combating climate change and flaring is therefore not regarded as the most efficient nor environmentally friendly of the end use options available. It is unknown due to the fluctuating nature of the gas constituents what effects this might have on Colorado and National Ambient Air Quality Standards (NAAQS) and Permitting and would also require site-specific emissions monitoring if flaring is ever approved to determine air permit requirements. To the best we are able to tell from literature, flaring in an active gob (where the longwall miner is working) in the US has not yet been approved by MSHA.

MSHA has notified the Forest Service that flaring is not a feasible option and they would not approve a flaring operation. MSHA has objected to plans to flare mine methane brought to the surface by methane drainage wells despite approving of ventilation plans that included those wells. Flaring was determined to be an un-researched and untested technology and MSHA believes testing and analysis would require several years of effort. The USFS found that while


MSHA regulations may not specifically prohibit flaring, MSHA believed that any flaring system design would need to be tested in a situation in which no miners were exposed (such as at a sealed and abandoned mine), and that sufficient time was needed to test the viability and durability of the system to ensure that there would be zero potential to cause gas ignition underground. (See: Record of Decision, E Seam Methane Drainage Wells Project, Charles S. Richmond, USFS Forest Supervisor, March 7, 2008).

EA, 1.3, Purpose and Need, page 16: The purposes of the lease modification are to facilitate recovery of known federal compliant and super-complaint coal reserves both within the existing lease and the lease modification while also making operations on parent lease safer for mmers;

EA, 3.2, CaptUre and Use, page 49: If the mines were to generate their own power this would impact citizens including low income and minority individuals in multiple counties because ofthe contracts in place for electrical supply. Electricity costs in these rural communities could theoretically increase by 20% ($0.097lkwh to $0.116/kwh) for residential and business customers.


The USFS identified the cumulative effects ofthe mine methane emissions in the North Fork Coal EIS and the EA and discussed alternatives to venting including the potential environmental and economic impacts associated with flaring or capturing portions of the mine methane.

There is no specific authority in the Mineral Leasing Act, the regulations under the Act, or elsewhere, that addresses the capture and use of methane that must be removed from underground coal mines. The USFS analysis shows that the deciding officer understood both the environmental benefits of mine methane flaring and capture and the overriding need to protect the safety of underground miners. The USFS "no surface occupancy" stipulation for the lease modification places the suggested alternative methods to mitigate methane emissions outside the jurisdiction of the agency. Possible mitigation measures may be implemented by OMLLC on their existing leases, private land, or new BLM lease, but not on this lease modification due to the No Surface Occupancy stipulations.

Furthermore, an alternative requiring methane flaring would not satisfy the specific purpose and need for the project, which was to "facilitate recovery of known federal compliant and supercompliant coal reserves both within the existing lease and the lease modification while also making operations on parent lease safer for miners".

Due to the size of the lease modification (and associated recoverable coal reserves) relative to the existing parent lease, and considering the degree to which the lease modification would extend the life of the entire mining operation, the proposed action will not cause significant additional impacts beyond what is permitted under the parent lease; therefore, the effects of the proposed action, as well as the alternatives discussed, essentially do not differ from the no action alternative.


The environmental analysis adequately addresses whether methane flaring or methane capture are reasonable alternatives to the proposed action. The record supports the deciding officer's decision. Therefore, I recommend that the Forest Supervisor's decision be affirmed on this point.

Appeal Issue II-C. THE EA FAILS TO ANALYZE CARBON OFFSETS AS A REASONABLE ALTERNATIVE TO REDUCE THE IMPACTS OF THE LEASE'S METHANE POLLUTION.

Carbon offsets are a tested, feasible, and practical alternative to allowing the Elk Creek Mine to vent millions of cubic feet of methane into the atmosphere every day as a result of the Lease Modification without mitigation or control.

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An alternative consenting to Oxbow's proposed Lease Modification while requiring Oxbow to purchase carbon offsets is consistent with the proposed action's purpose and need. Oxbow would be able to expand its operations in the exact same manner as it proposed. A carbon offset alternative would simply require Oxbow to purchase carbon credits from a reputable vendor.

The Forest Service's failure to properly analyze the reasonable alternative of carbon offsets violates NEPA's mandate that anagency study, develop, and describe all reasonable alternatives to the proposed action. See, e.g., Native Ecosystems Council, 428 F.3d at 1245-47. In addition, the Forest Service violated NEPA's requirement that an agency provide a reasoned explanation why an alternative was eliminated from detailed analysis. See, e.g., id. at 1245-46; Wilderness Soc'y, 524 F. Supp. 2d at 1309.

Discussion: Also, see above discussion under Appeal Issue II, II-A, and II-B.

Emerging policy to regulate greenhouse gas (GHG) emissions through a cap-and-trade program presents mine managers with an opportunity to explore and develop methane utilization or abatement projects that generate value from the monetization of carbon offset credits. Projects that reduce methane emissions can generate carbon offset credits.

EA, 3.1, Past, Present and Reasonably Foreseeable Actions, starting on page 39.;. Elk Creek Mine -The mine has been operating for 12 years and holds over 6,800 acres of Federal coal leases, pending leases and private reserves .... Mine life is currently projected to last 2 Yz to 3 years (late 2013 to early 2014) based on existing leased reserves.

EA, 3.2, Air Quality, page 46: Preliminary modeling results using EP A's SCREEN3 air model indicate that methane concentrations from existing methane drainage wells ... would still be below the Mine Safety and Health Administration (MSHA) level of 1 %. No new methane drainage wells will be needed for mining this lease modification area (EA, page 46).


EA, 3.2, Carbon Credits, page 50: Purchasing of carbon credits is a voluntary financial investment that OMLLC may choose to entertain for business reasons. The federal agencies are not involved in any financial investment decisions that OMLLC makes as a corporation.


The USFS identified the cumulative effects ofthe mine methane emissions in the North Fork Coal EIS and the EA and discussed alternatives to venting, including the potential environmental and economic benefits associated with mitigating the mine methane.

Alternatives that address the reduction of the impacts of methane pollution are duplicative of either the No Action or Proposed Action alternatives. The USFS analysis shows that the deciding officer understood both the environmental benefits of employing carbon credits or offsets. However, the USFS does not have authority to require the mine to purchase carbon credits.

The environmental analysis adequately addresses whether carbon credits or offsets are reasonable alternatives to the proposed action. The record supports the deciding officer's decision. Therefore, I recommend that the Forest Supervisor's decision be affirmed on this point.

Appeal Issue III. THE EA FAILS TO INCLUDE A REASONABLY COMPLETE DISCUSSION OF GREENHOUSE GAS MITIGATION MEASURES.

In addition to requiring agencies to consider reasonable alternatives to the proposed action, NEP A requires agencies to provide a detailed statement of "any adverse environmental effects which cannot be avoided should the proposal be implemented." 42 U.S.C. § 4332(2)(C)(ii). For these unavoidable impacts, an agency must adequately propose and discuss appropriate mitigation measures in an EA or EIS. 40 C.F.R. §§ 1502.l4(f), 1502.16(h), 1505.2(c), 1508.25(b )(3). This discussion of mitigation measures is required "precisely for the purpose of evaluating whether anticipated environmental impacts can be avoided." S. Fork Band Council of W. Shoshone of Nev. v. u.S. Dep't ofInterior, 588 F.3d 718, 727 (9th Cir. 2009). An EA "should include sufficient discussion and analysis to allow the public or a reviewing court to evaluate the adequacy of proposed mitigation measures." Dine Citizens, 747 F. Supp. 2d at 1258 & n.39. And if "all practicable means to avoid or minimize environmental harm from the alternative selected" have not been adopted, the agency's record of decision must explain "why they were not." 40 C.F.R. § 1505.2(c).

V AM combustion, methane flaring, and carbon offsets would all mitigate and reduce the Lease Modification's GHG emissions and climate change impacts. Thus, these are all practicable mitigation measures that the Forest Service should have properly analyzed in the EA.

The Forest Service's failure to rationally justify why "practicable means to avoid or minimize environmental harm from the alternative selected" were not adopted also violates NEP A. See 40 C.F.R. § 1505.2(c).


Rules:

30 CFR § 906.30 V(D)(1) - Determine whether the permit application or application for a permit revision or renewal provides for post-mining land use consistent with the Federal Land Management Agency's (FLMA's) land use plan and determine the adequacy of measures to protect Federal resources under FLMA's jurisdiction not covered by the rights granted by the Federal coal lease.

40 CFR §§ 1505.2 - the record, which may be integrated into any other record prepared by the agency ... (c) state whether all practicable means to avoid or minimize environmental harm from the alternative selected have been adopted, and if not, why they were not ...

40 CFR §§ 1508.25(b), 1502.14(f),1502.16(h) - Federal agencies are required to develop, discuss in detail, and identify the likely environmental consequences of proposed mitigation measures.

Surface Mining Control and Reclamation Act - 30 USC 1291(28)-(28) "surface coal mining operations" means --

(A) activities conducted on the surface oflands in connection with a surface coal mine or subject to the requirements of section 516 surface operations and surface impacts incident to an underground coal mine, the products of which enter commerce or the operations of which directly or indirectly affect interstate commerce. Such activities include excavation for the purpose of obtaining coal including such common methods as contour, strip, auger, mountaintop removal, box cut, open pit, and area mining, the uses of explosives and blasting, and in situ distillation or retorting, leaching or other chemical or physical processing, and the cleaning, concentrating, or other processing or preparation, loading of coal for interstate commerce at or near the mine site: Provided, however, That such activities do not include the extraction of coal incidental to the extraction of other minerals where coal does not exceed 16 2/3 per centum of the tonnage of minerals removed for purposes of commercial use or sale or coal explorations subject to section 512 of this Act; and

(B) the areas upon which such activities occur or where such activities disturb the natural land surface. Such areas shall also include any adjacent land the use of which is incidental to any such activities, all lands affected by the construction of new roads or the improvement or use of existing roads to gain access to the site of such activities and for haulage, and excavations, workings, impoundments, dams, ventilation shafts, entryways, refuse banks, dumps, stockpiles, overburden piles, spoil banks, culm banks, tailings, holes or depressions, repair areas, storage areas, processing areas, shipping areas and other areas upon which are sited structures, facilities, or other property or materials on the surface, resulting from or incident to such activities;

42 USC § 4332(2)(C) - utilize a systematic, interdisciplinary approach which will insure the integrated use of the natural and social sciences and the environmental design arts in planning and in decisionmaking which may have an impact on man's environment.


Discussion: Also, see Appeal Issue II.

Oxbow Mining, LLC (OMLLC) operates the Elk Creek Mine under a construction permit that was issued by the Colorado Department of Public Health and Environment (CDPHE), Air Pollution Control Division (APCD) on July 29,2009. The permit is valid for a period of 5 years until July 29,2014. The permit sets limits on the following: PMlO, nitrogen oxides (NOx), and carbon monoxide (CO). Colorado does not regulate PM2.5 in permits. A detailed air quality assessment, including modeling, of the original lease was conducted as part of the environmental analysis for the Elk Creek Coal Lease Tract in 2000 (North Fork Coal FEIS, Tab 4). In this FEIS, an air quality assessment was completed for the original Oxbow mine, which was permitted by the State to produce up to 4.8 million tons of coal annually (Section 3.1 and Appendix M, North Fork Coal FEIS, Tab 4). This section of the FEIS identifies the permitted mining processes at Oxbow Mining and the emission increases included in the modeling (Section 3.1.3).

The Appellant suggested mitigation measures during the comment period that included methane flaring, capturing methane and putting to beneficial use or ventilation air methane oxidation. All of these would be effective in reducing GHG emissions. However, none of these potential mitigations can occur on the lease modification area, and it is extremely unlikely that these would occur on leases already analyzed under the North Fork Coal EIS and ROD issued in March 2000 for the parent lease COC-61357 (March 2001). The North Fork Coal EIS addressed surface methane venting through gob vent boreholes.

The agencies incorporated and accounted for GHG emissions changes in a qualitative and quantitative evaluation of potential contributing factors that would incrementally contribute to climate change. Based on the cumulative effects analysis (EA, page 53), GHG emissions associated with continued mining in the North Fork are negligible relative to any potential impacts on the global scale. Locally, the trend is a decrease in GHG emissions associated with the coal mining activities in the North Fork Valley.

The USFS does not authorize mining by consenting to BLM to issue a lease for federal coal. The impacts of mining coal were considered in the EA because it is a logical consequence of a lease modification being issued to the existing mine. The use of the coal after it is mined is also not determined at the time of leasing or mining; the use is determined by the purchaser and the end user. Almost all ofthe coal mined in this region is used by coal-fired power plants to generate electricity. A discussion of emissions and by-products that are generated by burning coal to produce electricity or transport coal from the mine was included in Section 3.2 of the EA.

The USFS and BLM do not govern GHG emissions, air quality standards, or pollutants. Further, the USFS and BLM do not permit or authorize mining operations and do not have the authority to regulate mining operations or the burning of coal at utility plants. The Clean Air Act requires the EPA to regulate air pollutants and develop regulations, rules, and standards for industries that emit one or more pollutants in significant quantities. The EA addressed climate change comments that were received in a timely manner.


Recommendation:

In review of the record I find the discussion of mitigation adequate to meet the twin aims of NEP A (informed decision making and public disclosure) given the minor contribution of the lease modification to global climate change.

The record supports the deciding officer's decision. Therefore, I recommend that the Forest Supervisor's decision be affirmed on this point.

Appeal Issue IV: THE EA FAILS TO TAKE A HARD LOOK AT THE AIR QUALITY IMPACTS OF THE COAL LEASE.

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The Forest Service's consent to the Lease Modification will lead to emissions of multiple pollutants that degrade air quality. For example, coal mining at Elk Creek emits substantial amounts of NO x and particulate matter from drill rigs, processing equipment, diesel engines, dirt roads, ventilation shafts, and locomotives. In addition, uncontrolled venting through drainage wells and through the ventilation shaft that will operate to remove methane from the coal mined in the Lease Modification area - and in the area where the additional 0.5 million tons of coal will be mined - will cause air pollution. NEP A requires agencies to take a "hard look" at the environmental impacts of a proposed action, including air quality impacts. See, e.g., New Mexico, 565 F.3d at 703-04. The EA violates NEPA because it fails to take a hard look at many of the Lease Modification's air quality impacts.

Rules:

Clean Air Act, as amended, 1990 (42 USC 7401-7671) - Conduct all land management activities in such a manner as to comply with all applicable federal, state, and local air-quality standards and regulations.

Section 102(2)(C) ofNEP A - The purpose of the regulations tells the federal agencies what they must do to comply with the procedures and achieve the goals ofthe National Environmental Policy Act. The NEP A process is intended to help public officials make decisions that are based on an understanding of environmental consequences, and take actions that protect, restore and enhance the environment.

40 CFR § 1502.16 - This section forms the scientific and analytic basis for the comparisons under §1502.14. It shall consolidate the discussions of those elements required by sections 102(2)(C)(i), (ii), (iv), and (v) ofNEPA which are within the scope of the statement and as much of section 102(2)(C)(iii) as is necessary to support the comparisons. The discussion will include the environmental impacts of the alternatives including the proposed action, any adverse environmental effects which cannot be avoided should the proposal be implemented, the relationship between short-term uses of man's environment and the maintenance and enhancement of long-term productivity, and any irreversible or irretrievable commitments of resources which would be involved in the proposal should it be implemented. This section should not duplicate discussions in § 1502.14.


40 CFR § 1502.22 - Incomplete or unavailable information - When an agency is evaluating reasonably foreseeable significant adverse effects on the human environment in an environmental impact statement and there is incomplete or unavailable information the agency shall always make clear that such information is lacking.

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42 U.S.c. § 7475(a) Major emitting facilities on which construction is commenced No major emitting facility on which construction is commenced after August 7, 1977, may be constructed in any area to which this part applies unless - (3) the owner or operator of such faCility demonstrates, as required pursuant to section 741 Ou) of this title, that emissions from construction or operation of such facility will not cause, or contribute to, air pollution in excess of any (A) maximum allowable increase or maXimum allowable concentration for any pollutant in any area to which this part applies more than one time per year, (B) national ambient air quality standard in any air quality control region, or (C) any other applicable emission standard or standard of performance under this chapter;

42 U.S.C. § 7475 (e) Analysis; continuous air quality monitoring data; regulations; model adjustments (1) The review provided for in subsection (a) of this section shall be preceded by an analysis in accordance with regulations of the Administrator, promulgated under this subsection, which may be conducted by the State (or any general purpose unit of local government) or by the major emitting facility applying for such permit, ofthe ambient air quality at the proposed site and in areas which may be affected by emissions from such facility for each pollutant subject to regulation under this chapter which will be emitted from such facility.

Discussion:

Air quality impacts were addressed at many points in the record. The deciding officer made several findings in the DNIFONSI (DN/FONSI, page 5):

"The EA (Section 3.2) documents issues related to air quality standards and possible effects globally and locally.from climate change. Afew commenters undoubtedly would like to see modeling impacts of criteria pollutants and climate change .from this project. Criteria pollutants for this area were previously modeled under the North Fork Coal EIS which this EA is tiered to. Regulations at 40 CFR 1502. 14-1502.16 describe that a comparison between the existing or baseline condition and the proposed activities be described "as is necessary to support the comparisons" and "provide a clear basis for choice by the decision maker". This has been sufficiently described to me as extending the existing condition which is in compliance with Clean Air Act permits issued to OMLLC The addition of the lease modification area would add only about 2 days to 3 weeks worth of mining to the life-ol-mine depending upon which mine plan is approved However, leasing the small amount of reserves on the modification would facilitate the mining of an additional 0.52 million tons of coal on the parent lease. There is disagreement between BLM and OMLLC whether this quantity of coal would be mined on the parent lease with or without the lease modification; however, effects were disclosed in the EA (Section 3.2) such that either scenario may apply. The permitted baseline condition such as the rate of mining and mining systems will not change. Additionally, trends in air quality and climate change impacts have been identified"


Further discussion in the air quality section of the EA (EA, Section 3.2, pages 41-60) clearly indicates this project would be in compliance with NAAQS and CAA. The section further indicates how modeling and calculations were conducted for emissions.

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The appellant ascertains that the Elk Creek Mine has "emits substantial amounts of NO x and particulate matter" and "uncontrolled venting through drainage wells and through the ventilation shaft that will operate to remove methane" however as found in the record these emissions are regulated by the State of Colorado through the Air Pollution Control Division by which Oxbow Mining, LLC has a current and valid permit (APEN-Air Pollution Emission Notice). The permit is valid for a period of 5 years until July 29,2014. The permit sets limits on the following: PMlO, nitrogen oxides (NOx), and carbon monoxide (CO). A detailed air quality assessment, including modeling, of the original lease was conducted as part of the environmental analysis for the Elk Creek Coal Lease Tract in 2000 (North Fork Coal FEIS, Tab 4). In this FEIS, an air quality assessment was completed for the original Oxbow mine, which was permitted by the State to produce up to 4.8 million tons of coal annually (Section 3.1 and Appendix M, North Fork Coal FEIS, Tab 4). This section of the FEIS identifies the permitted mining processes at Oxbow Mining and the emission increases included in the modeling (North Fork Coal FEIS, Section 3.1.3, Tab 4).

It is important to note that EPA periodically reviews the National Ambient Air Quality Standards (NAAQS) and their scientific basis, and revises the standards as appropriate to protect public health and the environment. This means that over time Colorado Department of Public Health and Environment may need to implement additional control measures to meet new, more protective air quality standards.

Recommendation:

Where the State of Colorado has a threshold in law or regulation for air quality emissions, the environmental analysis (both this EA and the FEIS for the parent lease) addressed the project's relationship to that threshold. I recommend that the Forest Supervisor's decision be affirmed on this point.

Appeal Issue IV-A: THE EA FAILS TO ANALYZE IMPACTS TO AMBIENT OZONE CONCENTRATIONS

Ozone is a pollutant of concern for which the Clean Air Act has established a National Ambient Air Quality Standard ("NAAQS") to protect public health and welfare. It is particularly important for the Forest Service to analyze and assess the Lease Modification's impacts to ambient ozone concentrations in light of increasing ozone trends in the Rocky Mountain West, including western Colorado, and the link between rising ozone and increases in VOC and NOx emissions from oil and gas production and other activities.

While the EA briefly describes the basics of ozone formation, it fails entirely to analyze and assess the impacts to ambient concentrations of ozone air pollution resulting from the Lease Modification. Instead, the Forest Service alleges that (1) ozone analysis is a "complex process" and better analyzed ona regional basis, rather than for an individual project; and (2) the June 2011 EA "tiers" to a 2000 Iron Point FEIS for an adequate ozone analysis. EA at 42,44. Neither


ofthese explanations excuses the EA's failure to analyze and assess the Lease modification's impacts to ambient ozone concentrations.

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The Forest Service's argument that ozone analysis is too "complex" to perform contradicts both federal land management agency practice and EPA's recommendations for similar coal leases and other sources in Colorado. For example, the Clean Air Act and EPA guidance require every new major source in a NAAQS attainment area to demonstrate that its emissions willnot cause or contribute to an ozone NAAQS violation, which involves the type of "complex" analysis that the Forest Service declined to do here. 42 U.S.C. § 7475(a)(3), (e).59 Moreover, BLM conducted a rudimentary ozone analysis in the draft EIS for the nearby Red Cliff coal mine in Colorado.60 The Forest Service does not explain why BLM conducted an ozone analysis for a nearby coal mine, but a similar analysis for the Lease Modification would be too complex. Agencies must rationally explain their actions and conclusions; the Forest Service failed to so do here. Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); see also S. Utah Wilderness Alliance v. Kempthorne, No. 08-0411 (LFO) (D.D.C. Order Dec. 1,2008) (rejecting unsupported BLM determination that ozone analysis is "too costly and time consuming," and enjoining decision approving oil leases), attached as Exh. 40.

The Forest Service attempts to justify its failure to consider the Lease Modification's impacts on ambient ozone concentrations by asserting that "[ a] detailed air quality assessment, including modeling, ofthe original mine was conducted as part of the environmental analysis for the Elk Creek Coal Lease Tract in 2000." The 2000 Iron Point FEIS the Forest Service refers to, however, did not analyze or assess impacts to ambient ozone concentrations. No agency expert specifically analyzed the Mine's impacts to ozone concentrations in the EA or the 2000 FElS.

Even if the 2000 Iron Point FEIS had analyzed impacts to ambient ozone concentrations, that analysis would be outdated and not appropriate for tiering for the EA.

The Forest Service's efforts to "tier" to the 2000 Iron Point FEIS to justify the lack of ozone analysis in the EA violate NEP A.

IV-A-l: THE EA FAILS TO ANALYZE NOx EMISSIONS

Despite the significant impact of NO x emissions on ambient ozone concentrations, the EA makes no effort to quantify the NOx emissions that will result from the lease modification. Nor does the EA analyze the impacts to air quality ofthe Lease Modification's NOx emissions.

IV-A-2: THE EA FAILS TO ADEQUATELY ANALYZE VOC EMISSIONS

While the Forest Service failed to analyze the scope ofVOC emissions for the Lease Modification, data from the nearby West Elk Mine - about five miles from the Lease Modification area - shows that non-methane hydrocarbons (i.e., VOCs) there constitute approximately 1 % of the methane emissions from that mine's methane drainage wells.

The EA fails to analyze or disclose VOC emissions at all. Nor can the Forest Service rely on the 2000 Iron Point FEIS for an analysis of the VOCs. That FElS mentions VOC emissions only


once, in its analysis of emissions from mine operation and coal transport, stating that "trace amounts of organic compounds [from diesel engines] ... can cause short-term odor problems.

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The 2000 Iron Point FEIS completely fails to address pollutants found in vented methane. Instead, the FEIS' s brief discussion of methane emissions states only that methane is vented to the atmosphere. The Forest Service cannot "tier" to or otherwise rely on an ll-year-old analysis that omits any discussion of the most likely source ofVOC pollution.

Discussion:

Also see the discussion above in Appeal IV issue.

Ozone is not emitted directly into the air but is formed by the reaction of Volatile Organic Compounds (VOCs) and nitrogen oxides (NOx) in the presence of heat and sunlight. VOCs are emitted from a variety of sources, including motor vehicles, and other industrial sources. NOx is emitted from motor vehicles and other sources of combustion.

The appellant argues that ozone analysis should have been completed directly for this lease modification based on the fact that the BLM conducted a rudimentary ozone analysis in the draft EIS for the nearby Red Cliff coal mine. However, it should be noted that the BLM analysis was for an impact of a whole mine including surface disturbance. This lease modification clearly does not authorize any new surface disturbance which would lead to an increase ofVOC's and NOx emissions which is discussed in the EA (Section 3.2 pages 41 to 60). The fact that this lease modification is significantly smaller in the amount of coal proposed for removal (35,000 to 235,000 tons equivalent to addition of2 days to 3 weeks of mining) and allows no new surface disturbance it was clearly stated in the EA that this will contribute such minor changes in the amounts of NOx or VOCs to the air, that those changes would not be readily evident in further modeling. The EA also states that "The equipment used for the lease modification will be the same equipment that is being used in the current mining operations. Therefore, the air quality impacts associated with the proposed mine expansion can be presumed to be equal to, or less than, impacts predicted in the original air quality impact assessment due to more stringent regulations. "

The DN/FONSI was clear to state the Oxbow will be required to maintain their current APEN with the State of Colorado who has been delegated the authority over air quality regulation and enforcement. The proposed action is not anticipated to require any amendments or modification to the APEN. The issue of NOx and VOCs emission as well as their relationship to ozone is apparent in the analysis and was not overlooked.

Recommendation:

I recommend that the Forest Supervisor's decision be affirmed on this point regarding analysis of ozone, NOx and VOCs.


Appeal Issue IV-B: THE EA FAILS TO ANALYZE IMPACTS TO PM2.5 CONCENTRATIONS

The EA also fails to analyze impacts to concentrations ofPM2.5.

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The EA fails to contain any analysis at all of the Lease Modification's impacts to PM2.5

concentrations, an oversight that violates NEP A. The EA merely notes that "Colorado does not regulate PM2.5 in permits." But a federal agency cannot rely on a state agency's failure to regulate a pollutant in a permit as a proxy for NEP A compliance any more than it can rely on an actual state permit.

Where neither the EA, nor the EIS to which the EA is tiered, analyze a relevant environmental impact, NEP A has been violated.

Discussion: See also general air quality discussion above in Appeal VI point.

The EA clearly states in the air quality report (Section 3.2) that all particulates were considered and analyzed in the EA and the parent EIS as they are a standard within the NAAQS and CAA (Clean Air Act). It is also part of the analysis that all particulates are analyzed and implemented by the State of Colorado (via the CDPHE) through the authority delegated to by the CAA. The CDPHE has permitted the mine in accordance with the rules and regulations of the Colorado Air Quality Control Commission and the Colorado Air Pollution Prevention Control Act. Additionally, the State of Colorado imposes limits on processing rates and diesel fuel consumption, and requires specific control measures (such as enclosure of transfer points, and enclosure and spray bars on crushers and screens).

The EA also clearly shows that this lease modification does not measurably change the baseline air quality. It was referenced a larger action that the BLM analyzed for a nearby modification that stated the mine air quality including PM2.5 and PMIO would be less than current emissions. Therefore, the USFS modification is significantly smaller than that BLM analysis and not expected to exceed the NAAQS.

The appellant commented on this issue during the scoping comment period and in the response to comments stated that modeling was done for this area and stated that "Relatively recent (2008) air dispersion modeling in the North Fork Valley which included regional impacts indicates that particulates would not cause ambient air quality impacts and no acid deposition or visibility impacts on the West Elk Wilderness (Class I airshed) would occur based on coal mining/or which production rates have not changed since the model was run."

In 2009, the State of Colorado issued a new permit that covers all of the NAAQS standards to ensure projects meet those air quality standards.

Recommendation:

I recommend that the Forest Supervisor's decision be affirmed on this point.


Appeal Issue IV -C: THE EA FAILS TO ADEQUATELY ANALYZE IMP ACTS TO VISIBILITY IN CLASS I AREAS

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The Forest Service has an affinnative duty under the Clean Air Act to protect visibility in Class I areas, which include national parks and wilderness areas. 42 U.S.C. § 7475(d)(2)(B). In the EA, the Forest Service "tiers" to the 2000 Iron Point FEIS's visibility analysis - without conducting any further analysis - to support its conclusion that the Lease Modification's air quality impacts will not be significant. EA at 43-44. While the 2000 Iron Point FEIS concluded that the Mine's overall impacts on visibility would not be significant, it also stated that impacts to visibility at portions of the West Elk Wilderness Area would potentially be significant and exceed the threshold for significant impacts on the worst visibility days.

Even if the Forest Service's conclusion in 2000 that the Mine's overall visibility impacts were insignificant was reasonable then, that is not a reasonable conclusion in 2011 without further analysis.

When the underlying environmental conditions and air quality baselines have changed since an earlier NEPA analysis, the Forest Service cannot "tier" to that earlier EIS to avoid conducting up-to-date analysis that accurately gauges the environmental impacts of the current project.

Discussion:

See also the discussion above in Appeal Issue IV.

Air pollutants such as particulate matter (PM), sulfur oxides (SOx), and nitrogen oxides (NOx), can reduce visibility across large regional areas, including national parks and wilderness areas. The area surrounding the lease modification is designated a Class II area, as defined by the Federal Prevention of Significant Deterioration (PSD) provision of the Clean Air Act.

Federal/State Mandatory Class I Areas located in the analysis area include West Elk Wilderness at approximately 10 miles south-southeast and Black Canyon of the Gunnison National Park approximately 25 miles southwest of Somerset, Colorado. Due to the nature of the project no specific pennit requirements apply to gaseous emissions.

Construction will be required to comply with fugitive dust provisions under Regulation 1 (5CCR 1001-3) which requires that precautions be taken to control fugitive emissions (e.g., airborne particulate matter) to levels below opacity (EA, page 42). See discussion under Appeal Issue IV.

The Elk Creek Mine currently operates under air emission discharge pennits obtained from Colorado Department of Public Health and Environment (CDPHE), Air Pollution Control Division on July 29,2009. The pennit is valid for a period of 5 years (until July 29,2014). This time period covers the time period in which the Proposed Action Alternative would be implemented. See Air Quality Impacts under Appeal Issue IV.


The EA (3.2, Air Quality, page 43) and the EA Response to Public Comments provides clearly that modeling for visibility was completed and that the results of that detailed impact assessment predicted no significant impacts to air quality as a result of authorizing the Oxbow Mine.

The EA fmds the impacts from this lease modification will: "Leasing actions would have no direct impact on air quality as the lease does not authorize any mining activities. However, if underground mining is subsequently approved, indirectlcumulative effects on air quality would be similar to those described for No Action Alternative except under the reasonably foreseeable development scenario these effects would be extended for approximately 2 days to 3 weeks due to extending the life of the mine with the coal reserves in the lease modification".

Compliance with CAA and NAAQS was addressed in the air quality section (3.2 pages 41-60). The mere act of analyzing visibility and its impacts would appear to satisfy the intent of this section under NEP A. Recommendation:

I recommend that the Forest Supervisor's decision be affirmed on this point.

RECOMMENDATION

I recommend that the Forest Supervisor's August~, 2011 Record of Decision be affirmed and that the Appellant's request for re1iefbe denied.

w~y~ WILLIAM T. BASS Appeal Reviewing Officer Forest Supervisor, Bighorn National Forest

united states p.o. box 25127 department of lakewood, co...

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