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The company may add a powerline, access road and ventilation hole in the Sylvester Gulch or on the northern portion of the lease tract. It is anticipated there will be a maximum of 8 drill holes to acquire geologic information after the lease is issued. The locations of these facilities are not known at this time. Additional NEPA analysis would be required when the locations are proposed and the existing lease stipulations would be incorporated into any decisions made as a result of the proposals. The estimated acreage of surface disturbance is expected to be less than five acres. The surface runoff will be detained on-site at the above ground surface disturbance sites. All mine facilities are in place, located off the Box Canyon Tract and are already permitted by CDMG on fee and federal lands. Production is anticipated to commence on the tract by late 1995 if Mountain Coal Company is the successful bidder. The maximum production rate from the tract would be about 5 million tons per year, but could vary with market demand and/or production being satisfied in greater or smaller quantities from other federal leases. Mining on the tract could be completed in 10 years but may take longer because mining would occur in conjunction with the adjacent lease tract. Production at the 4 million tons per year level would sustain a 32 year mine life for the West Elk Mine. Expected employment at the mine, at the full production level of 5 million tons per year is 210 persons. In 1993, 3 million tons were produced with 189 persons employed. Compliance With the Land Use Plan This application is in compliance with the existing BLM land use plan. The Uncompahgre Basin Resource Management Plan (RMP) was completed and approved in July, 1989. The land use plan determined that the application area was to be managed for both existing and potential coal development. The area is acceptable for coal development and coal production could occur without conflicting other land uses with a minimum of multiple use restrictions as described in the RMP. The one remaining land use standard to be applied is the Coal Unsuitability Criteria which has been completed and is contained in Appendix I. Approximately 18 acres of the lease are unsuitable for coal mining due to the North Fork of the Gunnison River floodplains and 160 acres are unsuitable for surface disturbances due to riparian habitat in Box Canyon that support priority habitat for migratory bird species of high federal interest. After application of the exceptions to the Criterion approximately 18 acres cannot be undermined and there are 160 acres with no surface occupancy. Further restrictions may apply if conditions warrant such as described in the mitigation measure section of this document. The September, 1991, Amended Land and Resource Management Plan (LRMP) for the Grand Mesa, Uncompahgre and Gunnison National Forests made provisions for coal leasing subject to the application of the Coal Unsuitability Criteria ISee Appendix 11. The LRMP also provides for applicable stipulations to be utilized for protection of specific surface resources in Section III, General Direction, pages 63-69. The Record of Decision for the Oil and Gas Leasing Final Environmental Impact Statement signed on April 19, 1993 by Robert L. Storch considered surface resources in various Affected Environments and amended the 1991 LRMP with regards to oil and gas leasing stipulations. The proposed coal lease area contains Affected Environments considered in that EIS; therefore, based on the site specific examination of the area, the effects analysis in the Oil and Gas EIS adequately describes effects in the proposed coal lease area. The stipulations from that EIS are applicable to this lease proposal. As a result of the LRMP, approximately 1,512 acres have no surface occupancy stipulations and 854 acres have seasonal and/or controlled surface use stipulations. B. Alternative Two - Reiect Application INo-Actionl The second alternative is to not authorize a lease sale in response to the competitive coal lease application submitted by Mountain Coal Company. If the decision was to reject the application, Mountain Coal Company would continue its present mining of the B and D/E seams bypassing the Box Canyon Tract. However, because access to the coal on the application lands could be reached at the outcrop, the tract could be mined in the future. Until the coal is mined in the future, not mining the coal would represent a loss of revenue to the federal government and a loss of potential energy (coal) to the nation as well. Future mining from the outcrop is unlikely for the reasons stated above in Part II. Not offering the federal coal reserves for lease would shorten the West Elk Mine life by 10 years. Page 4