2011-12-27_REVISION - C1981022 (2)

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DIVISION OF RECLAMATION, MINING AND SAFETY Department of Natural Resources 1313 Sherman St., Room 215 Denver, Colorado 80203 Phone: (303) 866 -3567 FAX: (303) 832 -8106 December 27, 2011 Jim Kiger Oxbow Mining, LLC P.O. Box 535 3737 Highway 133 Somerset, CO 81434 RE: Elk Creek Mine – Permit No. C- 1981 -022 TR -73 – Methane Utilization Facility and Alluvial Monitoring Well Relocation Preliminary Adequacy Review No.1 Rule 2.03.10 – Identification of Other Permits Rule 2.05.3(3) – Mine Facilities Office of Mined Land Reclamation STATE OF COLORADO COLORADO D I V I S I O N O F RECLAMATION MINING —&— SAFETY John W Hickenlooper Governor Mike King Executive Director Loretta E. Pineda Director Dear Mr. Kiger: The Division of Reclamation, Mining and Safety (Division) received Oxbow Mining LLC's (OMLLC) application for Technical Revision No. 73 (TR -73) at the Elk Creek Mine on November 25, 2011, and it was deemed complete for the purposes of filing on December 1, 2011. OMLLC is proposing to add a methane fueled electricity generator and thermal oxidation facility and to relocate an alluvial monitoring well. The methane fueled electricity generator and thermal oxidation facility will be located outside the permit disturbance boundary. The Division concurs with this proposal provided the electricity generated by the facility is not used to provide power directly to the coal mine. If the power is used directly by the mine, the electricity generator and thermal oxidation facility will be considered a support facility. The Division has the following comments regarding the proposed plan. 1. The OGCC permit must be issued before the gas being pumped by the methane drainage borehole can be used for production. Please commit to notifying the Division and updating the permit when the OGCC permit is issued. 2. The methane drainage borehole located north of the Elk Creek fan is a Division regulated coal facility that will be providing methane through a pipeline to the methane utilization facility which is not under the jurisdiction of the Division. Please clarify in the Permit (Section 2.05.3 Item P) where the jurisdiction of the Division for the methane drainage borehole will end (example: at disturbance boundary, point on the pipeline etc.). 3. Please clarify in the Permit (Section 2.05.3 Item P) that the borehole is a dual use facility. Currently, the borehole is used as a methane drainage borehole regulated by the Division and serves to degas the mine. With TR -73, OMLLC is proposing the dual purpose of a gas Office of Denver • Grand Junction • Durango Active and Inactive Mines