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WESTERN <br />FUELS <br />ASSOCIATION <br />INC. <br />7heNational <br />Fuel Supply <br />Cooperative <br />ftecov° <br />3uN 1 2011 <br />Division of 1-ieclamation, <br />Mining and Sate* <br />Nolan W. Lloyd <br />Chief Well Inspector <br />State of Colorado <br />Division of Water Resources <br />1313 Sherman Street, Room 818 <br />Denver, CO 80203 <br />Re: File No: 11 -BC -009 Alleged Statue/Rule Violations: Construction of Monitoring <br />Hole/Wells without proper Notice or Permit. <br />Dear Mr. Lloyd, <br />June 10, 2011 <br />This letter is provided in response to your written correspondence dated June 1, 2011 concerning <br />alleged violations of the Water Well Construction Rules for nine (9) monitoring holes <br />constructed at the proposed New Horizon North Mine in Montrose County. In your <br />correspondence, it is specifically stated that Western Fuels — Colorado (WFC) violated Rule 6.3 <br />which requires that the State Engineer be notified not less than three (3) days prior to the <br />construction of any monitoring or observation hole and Water Well Construction Rules 2 CCR <br />402 -2 which requires that monitoring and observation wells or holes shall not be constructed <br />without proper notice, a permit, or emergency approval from the State Engineer. The intent of <br />this letter is to clarify the circumstances surrounding the development of the monitoring holes <br />and to document the permits and state agency notifications provided prior to construction. <br />The property where these monitoring holes were constructed is a land parcel currently under <br />consideration by the Colorado Division of Reclamation, Mining and Safety (DRMS) for a coal <br />mine permit. These monitoring holes were developed as a connected action to the proposed coal <br />mine to satisfy requirements for the DRMS permitting process. On July 22, 2008 a Notice of <br />Intent (NOI) to Explore (Exhibit 1) was provided to DRMS clearly identifying the project as <br />construction of nine ground water monitoring holes. This notice was provided more than two <br />months prior to construction. This NOI was reviewed by DRMS and a letter of completeness <br />and requirements was provided to WFC on July 28, 2008 (Exhibit 2). Final approval was <br />granted by their office on September 4, 2008 (Exhibit 3), more than 3 weeks prior to <br />construction. Since WFC operates the current New Horizon Mine, interaction between WFC and <br />DRMS is extensive. DRMS is the primary regulatory agency for coal mining in the State of <br />Colorado. Existing and past practice when permitting through DRMS has been where there is a <br />regulatory overlap between two agencies, such as these monitoring holes, inter - agency <br />coordination occurs and the applicant is either directed by DRMS to pursue separate approvals <br />through the other interested agencies or conversely, the DRMS permitting is considered <br />sufficient to meet all requirements. <br />PO Box 33424 • Denver, CO 80233 -3424 • Telephone 303/254 -3070 • Fax 303/254 -3079 • 1100 West 116th Avenue • Westminster, CO 80234 <br />