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Mr. Robert Hagen - 2 - June 5, 1987 On March 31, 1987, Gary Fritz, an OSM inspector, observed activity at the site. This inspection was conducted after he consulted with the Division about the agreement and status of the operation. Mr. Fritz investigated and, after consultation with the AFO, issued a cessation order. The cessation order required as the abatement that;li La Plata Coal cease coal exploration operations; and 2) La Plata Coal obtain exploration approval within 30 days or reclaim the area disturbed within 60 days. On March 31, 1987, you informed Fred Banta, Supervisor of the State Coal Program, that the cessation order had been issued. On April 1, 1987, Fred Banta and I met with Ray Lowrie to express concern about the issues raised by the issuance of a cessation order given the circumstances at this mine site. On April 16, 1987 Fred Banta met with you to discuss alternatives for handling the issue. Among the alternatives raised with both Ray Lowrie and you was the possibility of the State issuing a cessation order to supplant the Federal cessation order. This alternative has been rejected as of this date and will be discussed further in this letter. After the cessation order had been written, the Division held meetings with Joe Carpio of La Plata Coal to discuss the exploration application that was under review. With concurrence from La Plata Coal, the Division extended the review period beyond the decision date so the Division could clarify some points about the limits of exploration. In addition, the Division was awaiting verification from La Plata Coal that the coal was to be used for test burns. The OSM hearing pertaining to the cessation order was held on April 30, 1987 in Durango. Steve Rathbun of the AFO presided. On May 11, 1987, Steve Rathbun informed Fred Banta that as the Hearing Officer he had modified the abatement of the cessation order to require that a valid permit be obtained by May 29, 1987, or that the property be reclaimed. This was done without consultation with the Division. As of May 29, 1987, La Plata Coal did not have a valid permit, but was still pursuing it within the limits of the State permit system. Underlying the facts and events just described are several important issues that I will now address. Did OSM Have To Write A Cessation Order? In this case it is not clear that OSM had to write a cessation order. 30 CFR 843.11 provides that in certain instances mining without a permit does not constitute a condition or practice which causes or can reasonably be expected to cause significant, imminent environmental harm to land, air and water resources. Such condition or practice must exist to issue a cessation order. When one is operating without a permit, it is presumed, due to lack of knowledge about the operation, that such adverse conditions exist. However, when the operation is an integral, uninterupted extension of previously permitted operations, and the person conducting such operations has filed a timely and complete application for a permit, a cessation order does not have to be issued by OSM.