2016-08-02_REVISION - C1982056 ‎(3)‎

• Permit No: C1982056
• IBM Index Class Name: Revision
• Doc Date: 8/2/2016
• Doc Name: Review of Borehole Closure Costs
• From: Twentymile Coal, LLC
• To: DRMS
• Type & Sequence: SI2
• Email Name: JLE
• Email Name: DIH
• Media Type: D
• Archive: No

8/2/2016 State.co.us Executive Branch Mail -Re: Twentymile Coal, LLC- Foidel CReek Mine (C-82-056), Review of Borehole Closure Costs for SI -2
'ATE E Hernandez - DNR, Alysha <[e-mail]>
COLORADO,
Re: Twentymile Coal, LLC - Foidel CReek Mine (C-82-056), Review of Borehole
Closure Costs for SI -2
1 message
Ebert - DNR, Jared <[e-mail]> Tue, Aug 2, 2016 at 9:01 AM
To: "Nettleton, Jerry" < J Nettleton @peabody energy. com >
Cc: Alysha Hernandez - DNR <[e-mail]>
Jerry,
I have reviewed your e-mail from Friday July 29, 2016 regarding the borehole and monitoring well sealing cost for Task
182 for S12. Your e-mail explained your concern regarding the increase in the task cost and the number of hours to
complete the task. Based on your e-mail, you indicated that you evaluated invoices for recent drilling and borehole
closure activities at the site and compared them to the Division's costs and that they were in the same range of the
specific closure activities where a 50% increase in hours was noted. You requested that I review the labor hours for
specific closure activities where an increase in hours was greater than 100°/x.
I have completed the review as requested and do not believe any further adjustment is warranted. When I reevaluated
this task after the informal conference, it appeared the amount of cement required for each borehole sealing activity and
the time it took to seal the boreholes for each activity was inconsistent. For each borehole sealing activity, I
reevaluated the number of bags of cement that would be required for each hole and the time required for a drill and water
truck to complete the sealing project. After interviewing drilling companies, DRMS came up with a chart of the number
of hours it takes to set up and take down the required equipment, evaluate an open hole, conduct some maintenance of
the hole to facilitate sealing the borehole and finally filling a drill hole drilled to a certain depth and calculated the feet per
hour rate to fill the borehole. These times did not vary greatly so I calculated the average time for borehole sealing
activities and came up with a factor that on average it takes about 1 hour to conduct sealing activities on 96.1 linear feel
of borehole. I used this number to calculate the hours required for each borehole sealing activity. The initial
inconsistency with the hours required for each borehole sealing activity is the reason there was a not a consistent
increase in hours.
Given this, the Division will proceed with the approval of S12. My recommendation would be that if any borehole
sealing project has been completed and the pads have been backfilled, graded and adequate drainage reestablished,
these areas would be eligible for a Phase I bond release.
On Fri, Jul 29, 2016 at 12:45 PM, Nettleton, Jerry <[e-mail]> wrote:
Jared —
As a follow-up to my 07/15/16 email and our subsequent conversations, I have reviewed the 02/16 and 06/16 SI -2
bond updates for Task 182, Borehole and Monitoring Well Sealing, and have obtained and reviewed documentation for
actual borehole sealing costs from our drillers and compared them with the 06/16 updates. The following summarizes
my concerns and the results of my review:
➢ For Task 182, the 02/16 bond update showed a total cost of $624,193 and total task hours of 910
The 06/16 update for this Task showed a total cost of $700,674 and total task hours of 1,678, an increase
of 12.3% in the total cost and 84.4% in total hours
> Based on the very significant increase in task hours, the 06/16 update for Task 182 was reviewed, and it
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