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Proposed Civil Penalty Assessment Picketwire Processing LLC /The New Elk Mine Cessation Order CO-2006-007 December 7, 2006 Reviewed: Notice of Violation CV-2006-003 File; Cessation Order CO-2006-007 File; Irrevocable Letter of Credit #291 (submitted 6/19/06); Mid-Term Review MT-OS Findings Document (1 t/g/O6); Irrevocable Letter of Credit #300 (submitted 11/13/06); Bond Release SL-02 Findings Document (11/15/06; final decision pending); NOV CV-2006-003 proposed Settlement Agreement (11/17/06; pending); Permit Transfer SO-03 Findings Document (11/21/06; final decision pending} History [Rule 5.04.5(3)(a)]: NOV CV-2006-003 was terminated I1/l4/06. An Assessment Conference was held 11/16/06, and a Settlement Agreement mailed 11/17/06. The NOV is thus within regulatory appeal timeframes. The History component is therefore proposed to be set at $0. Seriousness [Rule 5.04.5(3)(6)]: The Seriousness component ofa proposed assessment may range from $0 to $1750. The amount proposed depends upon whether the violation was of performance requirements or administrative requrements. Cessation Order CO-2006-007 was written for the permittee's failure to comply with the performance requirements of Notice of Violation CV-2006-003. [n the case of a violation of performance requirements, the amount to be assessed for Seriousness depends upon (1) the probability of the occurrence of the event which a violated standazd is designed to prevent, and (2) the duration and extent of the potential or actual damage in terms of area and impact on the public or environment. (1) The performance requirements of NOV CV-2006-003 were designed to prevent the State of Colorado from assuming anunder-bonded reclamation liability at the New Elk Mine. When the Cessation Order was issued (10/31/06), the probability of the occurrence of this event seemed high. Now that the full bond amount has been received, the probability seems low. (2) The extent of the under-bonded reclamation liability at the time of the issuance of the CO was significant in terms of area and impact on the environment. Now that the full reclamation bond amount has been received, the extent of the potential under-bonded liability is small. The Seriousness component of this assessment is therefore proposed to be set at $250. Fault [Rule 5.04.5(3)(c)]: The fault component of a proposed civil penalty assessment may range from $0 to $1500. Assessments for "unavoidable" violations may range from $0 to $250, for "negligence" violations from $250 to $750, and for "intentional" violations from $750 to $1500. The permittee's failure to abate Notice of Violation CV-2006-003 appears highly negligent. The Fault component is therefore proposed to be set at $750. Good Faith in Achieving Compliance [Rule 5.04.5(3)(d)]: It does not appear that the pennittee took extraordinary measures to abate this Cessation Order. Good faith credit is therefore proposed to be set a[ $0.