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Coal permit application deficient

A mining permit application for a company vying to extract about 2.5 million tons of coal per year near South Heart by 2016 has once again been found deficient.

The North Dakota Public Service Commission sent a letter to South Heart Coal, LLC, which is jointly owned by Great Northern Project Development and Allied Syngas Corp., on April 28, citing 37 deficiencies in their surface coal mining permit application.

The first application South Heart Coal filed on Oct. 15, 2008, was returned with about 60 deficiencies, but the company later withdrew the application in response to assumptions made about the company's relation to a coal beneficiation plant proposed by GTL Energy USA Ltd.

"It was our way of demonstrating that we weren't part of the GTL facility," said Richard Southwick, environmental vice president for South Heart Coal.

Deficiencies in the present application include surface water, post-mining land use, business entity information, and reclamation and operation plans.

"If the PSC wants clarification or they want the description, we will certainly respond to that," Southwick said.

Deficiencies cited in the 2008 application were similar.

Several who live near the mine have concerns about water and air quality.

Southwick said the mining has potential to cause issues with water sources within the mine's vicinity.

The PSC letter asks the company to address what impact the operation will have on surface water availability.

"Do we know what's going to happen? I can't say that we know what's going to happen, but it's a very real possibility, certainly," Southwick said.

The company will mine into what they call the "upper aquifer," and during the process, the water must be pumped out as they mine to reach the coal below.

Permeability of ground above the coal will be a key factor and consultants to the coal company have said it is not very permeable.

"Wells in close proximity to that hole we're going to dig could see a reduction in water flow and likely will because of where they are," Southwick said, adding they don't expect many to be affected.

James Deutsch, director of the PSC Reclamation Division, said under state permits, completed mining operations should be able to return water sources back to normal.

"In this case they just haven't provided those details, and once they come back we will review that and determine if we feel that's sufficient or not," Deutsch said.

While most state mining permits are issued for a period of five years, South Heart Coal requested a permit good from July 2014 through July 2043.

"We've never had anybody actually come in and propose a longer term," Deutsch said.

However, state law allows a longer permit issuance if the applicant can demonstrate a longer term is needed for financial reasons.

"We didn't probably pay as close attention to regulation as we should have," Southwick said, adding they are aware of the longer-term requirements. "I think we'll end up just accepting the five-year permit and its renewal provisions."

The company estimates about 140,000 tons of coal to be extracted in 2014, about 970,000 tons in 2015 and annual production thereafter to be about 2.5 million tons per year, Deutsch said.

The 2008 permit was for about 300,000 tons per year.

Provisions are also taken in the application in case of any sudden closure of the operation.

A "worst case scenario" bond has been set on the operation for about $11 million, Southwick said, but the PSC letter cited the calculation of the bond as not following state guidance.

Mike Berg, environmental engineer for the PSC Reclamation Division, said a formula is used to figure when the mine will have the highest environmental disturbance to the area.

"They'll submit what they think the worst case is; if we don't agree, we'll send it back," Berg said.

Southwick said Norwest Corp., based in Sale Lake City, and Golder Associates, based in Denver, are working on a response to PSC's letter.

Southwick said after the permit's filing in March, he expects the process to take about a year.

After permit applications go through a completeness review, they are then put to a technical review.

The deficiencies may not stop the permit's issuance.

"At this point, if you're looking for something that could be considered the showstoppers that would prohibit the issuance of the permit, I guess I'm not aware of anything like that," Deutsch said.

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