2013-11-22_INSPECTION - C1981022

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Oxbow has built a coal bed methane thermal oxidizer and three 1- megawatt generators just off of the permit area to the north of the diesel shop and change house. This project is a cooperative effort involving several entities including Oxbow, Vessels, Aspen Ski Corp., Gunnison Energy, 3MW, LLC., and North Fork Energy. Although outside the DRMS permit area, the methane is extracted from vents that are permitted, and the Mine Safety and Health Administration (MSHA) requires that such gasses to be vented. However, MSHA and DRMS jurisdiction ends before the methane pipeline enters this facility. Oxbow is now interested in expanding this operation and would like to develop additional methane vent boreholes (the old Sanborn Creek and Bear Creek portals, Sanborn Creek fan site, possibly others). These vents could potentially outlive the Elk Creek coal mine. Prior to DRMS permitting such activities or the necessary post mining land use changes (to industrial), Oxbow must acquire an Oil and Gas Conservation Commission (OGCC) permit to extract the methane. The OGCC permit application is currently pending. The east yard storage area was orderly, although a large amount of equipment is now being stored on the surface. This is a result of pulling all salvageable equipment out of the mine works. The main portal was open. The ventilation fans, intake heaters, and coal conveyor were running. The rock dust tank, diesel shop, and change house areas are orderly. No disturbances to areas outside the permitted area were noted. The following items were verified on file during the records check: • DRMS permit (2013 renewal in process — proposed decision awaiting publication / comment period) • Permit Application Package with revisions • Most recent findings documents (RN -5 and PR -7) • Insurance certificate (exp. 6/2014) • Performance bond (currently $4,871,606; may request reduction due to lowered reclamation cost estimate and over - bonding; not due to reclamation work completed) • Air emissions permit (dated 7/8/2013) • County special use permit (Delta / Gunnison) • Underground mining landowner notifications • Subsidence monitoring reports (10/4/2013) • Rill and gully survey (2/15/2013) • Annual Reclamation Report (2013) • Midterm review documents (7/7/2011) • Over 3 year's DRMS / OSM inspection reports • Transfer / Succession of operator documents (10/22/2001) • Reclamation cost estimate (5/9/2008; will be updated after permit renewal 6 approval becomes final) • Pond certification as- builts • Annual pond certifications (10/8/2013; quarterly pond inspections are certified by a P.E.) • Fill certifications for underground development waste 0 3rd quarterly inspection (10/8/2013) 0 2nd compaction testing and final certification (6/2013) • Haul & access road certifications (1/2005)