Peabod
<br />1111 ENERGY
<br />Hayden Gulch Terminal, LLC
<br />Ms. Virginia Brannon, Division Director
<br />Colorado Division of Reclamation, Mining, and Safety
<br />1313 Sherman Street, Room 215
<br />Denver, Colorado 80203
<br />303.866.3567 X 8135
<br />NOV �
<br />DW*N OF F
<br />Re: Hayden Gulch Terminal, LLC (Permit C-1992-081) —NOV CV -2016-002
<br />Dear Ms. Brannon:
<br />29515 Routt County Road 27
<br />Oak Creek, CO 80467
<br />970.879 3800
<br />November 1, 2016
<br />RECr" ED
<br />MAVON Or r cCLp,YATION
<br />DINING ktID Sr EV
<br />Hayden Gulch Terminal, LLC (HGT) is the permittee for the Hayden Gulch Loadout Facility, located near the
<br />Town of Hayden. The permitted coal loadout facility, which consists of a rail spur and loop; coal stockpile,
<br />handling, and loading facilities and equipment; and the Tie -Across Haulroad (as shown on the attached photo);
<br />has been inactive for a number of years. HGT is proceeding with phased reclamation of this facility, and a
<br />recent (09/21/16) Colorado Division of Reclamation, Mining, and Safety (CDRMS) inspection resulted in
<br />issuance of a Notice of Violation (NOV CV -2016-002) for, "Failure to contain disturbance within the permit
<br />area boundary". Given the specific circumstances, we feel that the NOV is unwarranted, and ask that you
<br />review the specific circumstances, as detailed in the following discussions, and based on your review, withdraw
<br />or terminate the NOV.
<br />Following a management decision that retention of the Hayden Gulch coal loading facilities to support future
<br />operations was no longer warranted, HGT reclaimed the associated surface facilities (coal stockpile, handling,
<br />and loading facilities and equipment, along with ancillary structures) in 2011, and filed a partial Phase I bond
<br />release request for the 11.9 acre facilities area. The partial bond release was approved in July 2012. There was
<br />some hope that the rail spur and loop could be transitioned to another beneficial use, so it was retained. After
<br />exploring various options, the decision was made in late 2015 to proceed with removal of the rail, ties, and
<br />ballast from the rail spur and loop. HGT contracted with S&S Salvage, an experienced salvage, demolition and
<br />reclamation firm, to complete the required railroad salvage work. S&S began the railroad salvage work on the
<br />rail loop portion of the spur on the west side of Routt County Road 37 (RCR37), and was able to use previously
<br />disturbed areas for equipment and materials (rails, ties, and ballast) staging.
<br />As the work proceeded beyond the rail loop to the north/south portion of the spur on the east side of RCR37, the
<br />permitted disturbance area for the spur was not wide enough for both the safety of required equipment
<br />operations and staging of equipment and materials. Options for dealing with this situation included; 1) Staging
<br />equipment and materials in the areas previously used for the work on the loop portion of the spur; 2) Staging at
<br />an off-site location; or 3) Utilizing adjacent Peabody -owned or leased lands for equipment and material staging.
<br />The first two options would require significant and almost continuous project traffic on and crossing the
<br />connecting County road (RCR37), posing safety concerns, resulting in potential dust generation, and being very
<br />inefficient, since equipment and materials would be continually moving between the work and staging area(s).
<br />Peabody owns the lands immediately adjacent to the north/south portion of the spur and owns or leases the lands
<br />immediately adjacent to the eastern portion of the rail loop (see attached ownership plat) and leases these lands
<br />for hay production. At the time this work was occurring, these hay fields had been cut, so Peabody contacted
<br />our leasee, and with his concurrence gave S&S permission to use the edge of the field areas adjacent to the spur
<br />for equipment and materials staging. As noted in the inspection report associated with the NOV (attached for
<br />reference) two small areas were affected totaling less than 1.5 acres. Activities in these areas were limited to
<br />equipment and materials staging and did not include any significant earthwork or grading. The only minor work
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