Coal mine closure will hit workers and budget

150 workers laid off

A carbon monoxide leak that closed the Elk Creek Coal Mine in Somerset in January, subsequently raising concern that spontaneous combustion could cause a massive explosion in the mine, finally forced mine owners last week to permanently lay off 150 employees and abandon $80 million in equipment and millions more in recoverable coal.

Elk Creek Mine executive vice president Mike Ludlow said after January’s closure, regular air monitoring by computer and physical sampling in the mine was showing consistently elevated levels of carbon monoxide, as well as increases in hydrogen and ethylene, indicating that there had been a fire somewhere in the mine.
The coal in the North Fork Valley oxidizes relatively quickly compared with other types of coal, say officials from Oxbow Carbon, which owns the mine, and that can manifest itself in elevated levels of carbon monoxide at the surface. Oxidization also releases heat, which in some cases can result in combustion and an underground coal fire. Under a worst-case scenario, a fire could ignite methane that occurs naturally in coal seams, resulting in an explosion.
The location of the carbon monoxide leak was narrowed to a remote area of the mine where the coal has already been removed, but is still in contact with the current mining operation at the farthest extent of the mine, 2,700 vertical feet underground.
“It’s all connected,” Ludlow says of the mine workings. “The people in the long wall face would be breathing fresh air and if a methane ignition were to happen, those people would have been exposed to that ignition.”
After sealing the area where the fire was believed to be to deprive it of oxygen, since no one ever saw a flame, mine operators opened the workings to the air and after two weeks saw indications that a fire was burning again. For that reason, officials from Oxbow Carbon decided to seal the mine and walk away from the estimated $80 million in equipment still located below ground and about 1.5 million tons of coal.
“We re-ventilated the mine and the spontaneous combustion reignited. So we were forced to seal the mine again,” Ludlow says.
“And because it reignited in less than two weeks of ventilating the mine, we made the determination that we can’t prevent the spontaneous combustion to a degree that we can safely recover the [long wall miner]. We don’t feel that we can risk personal injury or life to recover equipment.”
Instead, the mine was forced to cut back its operation from 350 miners to about 200, focusing on an area known as the East Lease, where two long wall miners are currently being operated and a third is being installed.
That will help Oxbow meet its contract obligations, but it could also impact the amount of money Gunnison County gets in severance tax, which can account for more than $1 million of the county budget.
The Elk Creek Mine officials have said that the operation could mine all the recoverable coal in the current lease by 2016 and even as soon as next year, depending on the outcome of pending lease applications.
While the it may be too early to tell how the current closure will impact Gunnison County, which is the benefactor of severance taxes paid by the mine.
 “We are unlikely to have any major impacts for the 2014 budget year, but after that it may become a significant issue depending on what happens with some other revenue sources for the General Fund,” County manager Matthew Birnie says. “ For instance, though gas production and its attendant taxes are down, that is likely to be temporary … However, both gas producers in the County currently have drilling permits under consideration and plans for many more wells than currently exist.  So, it is likely that over time severance taxes from gas production will replace a significant portion of the reduction in revenue from Oxbow.”