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Keenesburg Midterm 5 Page 3 May 1, 2009 <br />Section 2.03.4(7) contains information regarding ownership of surface and subsurface lands contiguous <br />to the permit. This section was last updated in May 2004. Please review this section and provide <br />updates to ownership and owner addresses as warranted. <br />Section V- Bonding Review <br />In accordance with Rule 3.02.2, the reclamation cost estimate was reviewed and updated with current <br />costs. The operator's reclamation cost estimate (RCE) is found in section 2.05.4 of the permit. This <br />estimate appears to be the original estimate from 1981. The Division reviews and updates the RCE at <br />permit renewal, midterms, bond releases, and when revisions to the permit change reclamation costs. <br />CEC has used the Division's reviews to determine the current reclamation costs and required surety. <br />The Division reviewed and updated the RCE on April 30, 2009, using the Division's CIRCES <br />estimating program. Costs associated with reclamation and maintenance of the remaining permitted site <br />are estimated to be $2,172,953.00. Previously estimated reclamation costs were $2,327,437.00 (RN5, <br />November 2006). No bond releases or revisions that have changed reclamation costs have been <br />approved between November 2006 and this review. This represents a reduction of $154,484.00. <br />Although many of the costs have increased slightly since the 2006 estimate, costs that have gone down <br />include seeding costs and well sealing costs. Seeding costs are based on seed costs provided by <br />independent seed companies. Due to demand, weather, availability, etc, seed costs tend to fluctuate. <br />The Division has revised the methodology for determining well sealing costs that we believe more <br />closely estimate actual sealing costs. This change in methodology resulted in roughly 50% reduction in <br />the well sealing costs included in the estimate. Cost reductions were also realized with <br />mobilization/demobilization of equipment. This reduction appears to result from mobilization of more <br />roadable equipment versus non-roadable equipment due to the nature of the remaining reclamation tasks. <br />The Division holds a bond in the amount of $2,327,437.00 as a corporate surety from Travelers Casualty <br />and Surety Company of America. No additional bond is required as a result of this midterm review.