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December 2002, VOL. 20, NO. 4

IMCC Fall Meeting in Annapolis, Maryland

The 2002 Fall Meeting of the Interstate Mining Compact Commission (IMCC) was held November 19-20 at the Historic Inns of Annapolis in Annapolis, Maryland.

IMCC’s standing committees met all day on Tuesday, November 19. Guests from the Office of Surface Mining (OSM) and the Mine Safety and Health Administration (MSHA) were in attendance, along with representatives from 19 states. Jack Belcher, Staff Director of the Subcommittee on Energy and Mineral Resources of the House Resources Committee, addressed attendees during a luncheon regarding Abandoned Mine Land Fund reauthorization issues. A reception was held in the evening. On Wednesday, November 20, the Executive Commission Business Meeting took place following a short briefing by Truett Degeare of the Environmental Protection Agency (EPA) on the status of recent discussions regarding mine placement of coal combustion waste.

A resolution urging Congress, the Office of Management and Budget, the U.S. Department of the Interior, and OSM to support reauthorization of abandoned mine land fee collection authority was adopted by the full Commission.

The next scheduled meeting of the IMCC is the 2003 Annual Meeting to be held March 30 - April 2 in New Orleans, Louisiana. More information and registration materials will be included in the next issue of the Compact Newsletter.

Michael F. Duffy Confirmed as FMSHRC Commissioner

The U.S. Senate recently confirmed by unanimous consent President Bush’s appointment of Michael F. Duffy to the Federal Mine Safety and Health Review Commission (FMSHRC).

The appointment, which becomes official following formal signature by President Bush, returns Duffy to the commission, where he previously served as counsel to the chairman for five and a half years. He has been with the National Mining Association (NMA) as Deputy/General Counsel and one of its predecessor organizations, the National Coal Association (NCA), since March 1993. In addition, he previously served as senior counsel for labor and mine safety and health matters at the American Mining Congress from 1979-87, which merged with NCA to form NMA in April 1995.

According to NMA President and CEO Jack N. Gerard, “Mike Duffy is one of nation’s outstanding legal experts in mine safety and health matters. While we will greatly miss his expertise at NMA, we are pleased that his knowledge and experience will now benefit the nation as a whole, by his service on the Mine Safety and Health Review Commission. We thank him for his service, and wish him well in this new endeavor.”

Consideration of Energy Legislation Expected

While many stakeholder groups were disappointed with the recent announcement that congressional conferees were unable to reach agreement on comprehensive energy legislation this year, the foundation has been put in place for early consideration of a bill in the next session.

After a joint meeting, Senate Democratic and Republican conferees declared that efforts to pass an energy bill this year were ended. “With the House expected to adjourn (Nov. 14), the odds were long, the time was short,” said an Energy Conference statement. Senate conferees had met and voted not to send a counter-proposal to Conference Committee Chairman Rep. Billy Tauzin’s (R-LA) suggestion that Price-Anderson Act and Pipeline Safety Act reauthorizations be separated from the overall energy bill and passed.

Bi-partisan leadership of both chambers has indicated that an energy bill will be top priority in the next Congress.

BLM Coal Lease Final Rule Issued

The Bureau of Land Management (BLM) recently issued a final rule eliminating the requirements for a public hearing and publication of a notice of availability of environmental analysis documents for coal lease modifications. The rule also amends the regulations to increase the amount of acreage of federal coal leases or permits that an individual or entity may hold in a single state or nationally.

The hearing and publication requirements were eliminated because they were included in error in a final rule published on September 28, 1999. The acreage amounts for federal coal leases or permits were increased to reflect the changes made by the Coal Competition Act of 2000. That law, which amended Section 27(a) of the Mineral Leasing Act, increased the maximum amount of acreage of federal coal leases or permits that an individual or entity may hold in a single state from 46,080 acres to 75,000 acres and raised the national acreage limit from 100,000 to 150,000 acres.

EIA Annual Energy Report Finds Coal the Most Affordable Fuel

Coal is still by far the most affordable and abundant source of power in the U.S., currently averaging less than one fourth the price of petroleum and natural gas, according to a new Energy Information Administration (EIA) report.

According to EIA’s recently released Annual Energy Review 2001, the production price of coal in real terms (constant 1996 dollars) has remained fairly stable for the last ten years. Coal averaged an estimated 73 cents per million Btu last year, crude oil was down 20 percent at $3.45 per million Btu, and natural gas was up 9 percent at $3.40 per million Btu.

According to EIA data, U.S. recoverable coal reserves of about 275 billion short tons are enough to last more than 250 years at current consumption rates. U.S. reserves represent 25 percent of the world’s recoverable coal resources.
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The full report is available on EIA’s website at www.eia.doe.gov.

IOGCC Conference Held on Natural Gas from Coal Seams

A conference co-sponsored by the Interstate Oil and Gas Compact Commission, the Interstate Mining Compact Commission, U.S. Department of Energy and the Environmental Protection Agency which explored the potential of natural gas from coal seams was held in Charleston, West Virginia on September 29. West Virginia Governor Bob Wise hosted the conference.

Recognizing the huge potential of natural gas from coal seams in the eastern United States, a slate of industry and government energy experts discussed the growing demand for natural gas, the environmental benefits of utilizing this resources and the existing barriers to production.

Governor Wise suggested that a name change is needed for this fuel source. “Natural gas whose source is coal now accounts for seven percent of total natural gas usage in the United States – an increase from zero percent 20 years ago,” he said. “Because this is now an important part of the total U.S. energy mix, the industry needs to move away from using its confusing short-hand term, ‘coalbed methane.’ The public understands the term natural gas because they use it every day. That is why we are calling this resource natural gas and identifying its source rock as coal seams.” Governor Wise noted that natural gas from coal seams is being developed in the Northern Appalachian Basin.

“However, this region radically lags other regions in the country for development of natural gas from coal seams,” he said. “For instance, this year we have had between 85 and 100 new permits issued for natural gas wells drilled into West Virginia coal seams. In that same period of time, our sister state of Wyoming will have permitted 8,500 gas wells drilled into the coal in the Powder River Basin.”

Also making remarks were James Slutz, deputy assistant secretary for natural gas and petroleum technology in the Office of Fossil Energy at the U.S. Department of Energy; Daniel Larcamp of the Federal Energy Regulatory Commission; Rita Bajura, director of the Department of Energy’s National Energy Technology Laboratory; Dr. Robert Stokes, vice president for research and deployment, Gas Technology Institute; and Dina Kruger, chief of non-CO2 Gas and Sequestration Branch, EPA.

Dr. Pramod Thakur, manager of coal seam degasification at CONSOL Energy; Dan Kortum, business development manager for Dominion Transmission; and Joseph Zupanick, vice president of operations at CDX Gas, LLC, discussed the relationship between natural gas from coal seam production and coal mining interests.

A trio of state geologists outlined the Basin’s potential for coal seam natural gas development: Katherine Lee Avary, head of the Oil and Gas Program, West Virginia Geological Survey; Larry Wickstrom, supervisor of the Petroleum Geology Group, Ohio Division of Geological Survey; and Dr. James A. Drahovzal, head of the Energy and Minerals Section, Kentucky Geological Survey.

The legal perspective was provided by Virginia Assistant Attorney General Elizabeth McClanahan and oil and gas law attorneys Jill Morgan Harrison of Penn, Stuart and Eskridge, Abingdon, Virginia, and Thomas McJunkin of Jackson and Kelly, PLLC, Charleston.

The development of natural gas from coal seams, also known as coalbed methane, creates jobs, cleans the environment and bolsters the economy of a state. Panelists discussing the state perspective included Dr. Donald Oltz, former Alabama Oil and Gas supervisor and Shawn Taylor, Wyoming Energy Commission Energy Policy Development.

Copies of the materials presented at the conference are available at www.iogcc.ok.state.us.

Hank List Appointed Secretary of Kentucky Natural Resources Cabinet

Governor Paul Patton recently named Henry Clay “Hank” List secretary of the Natural Resources and Environmental Protection Cabinet for the Commonwealth of Kentucky. List follows the late James E. Bickford as secretary of the cabinet.

“I’m pleased we had available inside the cabinet an individual with Hank’s outstanding background, knowledge and leadership abilities to carry forward both the important initiatives and reputation for fair and honest work that Jim Bickford had worked so diligently on for the past seven years,” Governor Patton said. “Hank and all the dedicated employees in the cabinet have been an integral part of a legacy of environmental protection and service to our Commonwealth of which we all can take great pride.”

“I feel very honored to have Governor Patton appoint me to this position,” List said. “I want to continue the programs started by Jim Bickford and Governor Patton, including cleaning up illegal dumps, straight pipes, implementation of solid waste legislation and brownfields regulations and the cleanup of the Paducah Gaseous Diffusion Plant.”

List also said the cabinet will continue its partnership with the Eastern Kentucky and Bluegrass PRIDE (Personal Responsibility In a Desireable Environment) programs.

List, appointed deputy secretary of the cabinet in June, 2001, has been the cabinet’s lead person for the voluntary environmental remediation (brownfields) regulations and has been representing the cabinet on the Kentucky State Board on Electrical Generation and Transmission Siting.

List served as the state representative from the 79th district from 1978-1984 and as a governmental affairs representative for Kentucky Utilities Company and Louisville Gas and Electric. In 1999, he was named director of public affairs for Kentucky Utilities/Louisville Gas and Electric. List holds a Bachelor of Public Administration degree from the University of Mississippi.

IMCC Files Brief on Section 522(e)

The Interstate Mining Compact Commission (IMCC) recently filed an amicus curiae (or “friend of the court”) brief with the D.C. Circuit supporting the Department of Interior’s (DOI) and National Mining Association’s (NMA) position in Citizen’s Coal Council v. Norton, which deals with Section 522(e) of the Surface Mining Control and Reclamation Act of 1977 (SMCRA).

In June, the U.S. District Court in Washington granted NMA’s motion to stay its March 27, 2002 decision declaring invalid DOI’s rule codifying the longstanding interpretation that 522(e) did not apply to subsidence caused by underground coal mines. That stay prevented applying 522(e) prohibitions to underground coal mine subsidence, pending a decision by the D.C. Circuit Court of Appeals.

In its brief, IMCC made three primary arguments:
  • The District Court order is contrary to the purpose and structure of SMCRA and its legislative history.
  • OSM properly determined that application of Section 522(e) to subsidence and underground mining operations that may cause subsidence is inappropriate in light of the other limitations and restrictions on such activities found in SMCRA.
  • The prohibition of subsidence and underground mining operations that may cause subsidence in 522(e) areas will expose the primacy states to an unprecedented number of takings claims.
In addition, IMCC noted that although each state has a legal duty to ensure that all of SMCRA’s minimum requirements are met by their respective programs, none of IMCC’s 14 primacy state members currently apply the 522(e) prohibitions to potential subsidence from underground coal mining operations.

The Citizens Coal Council (CCC) filed its brief with the D.C. Circuit on October 7. NMA and DOI filed reply briefs on October 25, and CCC filed its reply on November 12. Oral arguments are set for April 7, 2003.

MSHA Establishes Small Mine Office

The Mine Safety and Health Administration (MSHA) has established a new Small Mine Office to “address the specialized needs” of the nearly 6,500 mines around the country that fall into this category – any surface or underground operation with five or fewer employees.

According to MSHA, the Small Mine Office will: develop additional training materials tailored to small mines; provide on-site compliance assistance to small mine operations; expand training and information resources on the web for small operators; focus compliance assistance and training visits on mines that do not have their own safety and training departments and cannot use web-based resources; and identify regulations that create an undue burden on small mine operators and develop alternate ways to provide the same level of protection.

Heading the Small Mine Office is Kevin Burns, a 15-year MSHA veteran with more than 20 years of experience in the mining industry. He previously was director of safety and health services at the National Stone Association, and attorney with Buchanan Ingersoll P.C. of Pittsburgh, and a senior counsel with the American Mining Congress.

Dave D. Lauriski, assistant labor secretary for mine safety and health, said the new office will enable the agency to “better focus our resources” on reducing accident and injury rates at small mines, which are typically double those of larger operations.

Interior Awards: Best Reclaimed Coal Mines Since SMCRA Enacted

Secretary of the Interior Gale Norton recently announced special awards for the three most outstanding examples of coal mine reclamation since the Surface Mining Law (SMCRA) was enacted. Winners of the Special 25th Anniversary Awards for Excellence in Surface Coal Mine Reclamation since 1977 are: Gold Award – Sky Point Mine in Indiana; Silver Award – Indian Head Mine in North Dakota; and Bronze Award – Trapper Mine in Colorado.

For more information on Interior’s surface and abandoned mine land reclamation awards, see the OSM website: www.osmre.gov/awards.htm.
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