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Page Two Letter to Mr. David C. Shelton Re: Kerr Coal Permit Application July 31, 1980 effect of this request for various regulatory approvals and permits is to allow for the mining and exploring of an ad- jacent area encompassed within a recently issued Federal Coal Lease C-22777 and to bring Marr Strip #1, as so expanded, and the Marr Prep Plant into compliance with the Permanent Regulatory Program. The within application of Kerr Coal for approval of its mining plan and for state and federal permits is the next and last step prior to the commencement of Mining on Federal Lease C-22777 issued on July 1, 1980, pursuant to the Emergency Leasing Criteria set forth in 43 C.F.R. Part 3425. Mining of the coal reserves contained in Federal Lease C-22777 is neces- sary to maintain employment and production levels and to meet binding contracts. Without regulatory approval of the accompanying appli- cation, by February 1, 1981, coal production of Kerr Coal will plummet and its operations will be severely curtailed, if not halted altogether. Employees will be laid off, defaults under existing contracts will occur and, in the broader perspective, • the nation's critical energy shortage will be aggravated. More- over, failure to obtain all necessary regulatory approvals by February 1, 1981 will result in an absolute increase of 148 in the unemployment rate in Jackson County, Colorado when 114 employees of Kerr Coal are laid off. In an effort to bring the problem to the attention of the Office of Surface Mining Reclamation & Enforcement ("OSM") and MLRB and to facilitate and expedite review of this application, Kerr Coal has held a series of meetings with OSM and MLRB representatives throughout the spring and summer of 1980 for the purpose of discussing and reaching some under- standing on the permit format, design criteria for certain structures in the mining area, and environmental baseline information requirements in a wide variety of areas. The substance of these discussions, including detailed confirma- tion of baseline parameters, has been set forth in correspon- dence from Kerr Coal to OSM and representatives of the MLRB. Moreover, we must emphasize that the application is not for a new mine in virgin country. On the contrary, the application encompasses an existing operation that has been producing significant quantities of coal for over five years. Kerr Coal is a well-respected operation in the local commu- nity with an excellent reclamation record. Equally important, the application does not seek to expand the existing levels of • production, requiring additional employees or significantly