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Page 2 of 3 <br />DRMS recognizes that the use of methane gas to generate electricity and the related facilities are beyond DRMS <br />jurisdiction (Rule 1.04 (132)). The NOV was not written with the intent to expand our jurisdiction to include the <br />methane facilities, but rather to address the issue that a facility was built within the mine disturbance boundary <br />without prior approval and a reclamation cost bond adjustment. A revision should have been submitted to DRMS <br />prior to the construction of the substation proposing that the disturbance boundary be adjusted to remove the <br />substation. This is the procedure that was implemented in TR -73. <br />Issues Raised in the Oxbow. LLC letter of November 8. 2012 <br />The initial NOV was mistakenly issued without a DRMS representative's signature. It was re- issued with <br />a signature on November 13, 2012 via certified mail. <br />2. DRMS agrees with Oxbow's interpretation of Rule 1.04 (132) and that DRMS does not have jurisdiction <br />over the extraction of a gas resource and its associated facilities which was discussed in Technical <br />Revision 73 (TR -73). The methane well producing the gas is a permitted and bonded coal mine degas <br />well. During the TR -73 review process, OMLLC obtained a production well permit from the OGCC. A <br />point on the pipeline transporting the methane gas from the well to the generating facility marks the <br />boundary of the DRMS permit. DRMS agreed that as long as the power generated from the facility was <br />not being used as power for the coal mine, the facility would not be considered a coal mine support <br />facility and would not be considered a "surface coal mining facility ". As a result, the generating pad was <br />removed from the DRMS disturbance boundary to avoid jurisdictional confusion. <br />DRMS takes issue with the placement of the substation pad within the Elk Creek disturbance boundary <br />that was not discussed in TR -73. It is understandable that a large scale project such as this one will have <br />uncertainties, require modifications and that worker and facility safety is paramount to OMLLC; <br />however, it has not been demonstrated that OMLLC intended to disclose the placement of the substation <br />pad or submit a revision notifying DRMS of the changes made within the disturbance boundary. When <br />OMLLC was advised by DRMS that the pad is within the coal mine disturbed boundary, they suggested <br />that an as -built revision be submitted after the fact and the pad could be removed from the coal mine <br />disturbed area. DRMS would have considered a minor revision to the permit, had we been notified <br />during construction that the construction of the pad was necessary due to safety concerns. <br />DRMS acknowledges that the methane fueled electrical generating facility was constructed outside of the <br />disturbance boundary and is not within its jurisdiction as stated in the October 19, 2012 inspection report. <br />The inspection report does correctly state that DRMS was not aware of the construction of the substation <br />on a separate earthen pad within the disturbance boundary. Based on TR -73 submitted by OMLLC, one <br />pad for the electric generating station was needed; there was no discussion in the revision about the need <br />for another pad or facility area. The function of the substation is clearly for use with the electrical <br />generation facility; however, it was built on a recently constructed earthen pad within the disturbance <br />boundary without notifying DRMS. <br />4. The abatement for NOV CV- 2012 -008 requires the removal of the substation from the coal permit <br />disturbance boundary if its' intended purpose is solely for the transport of power to the grid and not for <br />the purpose of powering the Elk Creek Mine. If that is the case, the coal mine disturbance boundary will <br />need to be adjusted to exclude the substation and a bond will not be necessary. OMLLC submitted Minor <br />Revision No. 101 (MR -101) on November 13, 2012 to make the disturbance area adjustment. <br />This is an administrative violation where proper procedures were not followed. The corrective action to address <br />this violation is for OMLLC to submit a revision with the disturbance boundary adjusted to exclude the new <br />substation. OMLLC submitted MR -101 addressing the new substation via email on November 8, 2012 and <br />revised maps were delivered to the DRMS office on November 9, 2012. MR -101 is currently being reviewed. <br />