As the old saying goes, “It ain’t over till the fat lady sings.”

Well the Red Lady isn’t singing yet but she’s warming up her vocal chords. There is hope and there is change with the mine fight. And it appears it could be for real.

This might be the beginning of the end of a long fight that has permeated the culture of Crested Butte and some of Gunnison County. And in a somewhat ironic twist, the 40-year-old fight over the appropriateness of a molybdenum mine on the outskirts of Crested Butte could be resolved because one of the biggest mining companies in the world is now involved.

With the transfer of Mt. Emmons mining liabilities and assets from U.S. Energy to a wholly owned subsidiary of Freeport McMoRan, a series of goals will be put into place; if accomplished, they could take away the hovering black cloud of a potential industrial mine on the west side of Crested Butte and Red Lady mountain.

It may not yet be time to pop a Champagne cork but it might be time to walk down the aisle and take a look at which bottle of bubbly to buy.

We are collectively entering a process that could end a long confrontation and everyone could walk away happy. The water treatment plant could be modernized and be funded to operate in perpetuity. Coal Creek could get the attention it needs. The town and northern part of the valley could feel comfortable that a moly mine will never be dug on an industrial level inside Red Lady. The new owner of the property, the state agencies that regulate the property and the town and county that monitor that property are all working in collaboration to reach a happy ending. Cautious optimism is overflowing.

It’s sort of weird. Like it or not, part of Crested Butte’s modern identity is resort- and amenity-based but it was founded as a coal mining town. As such, Crested Butte has become known in part for its passion over a 40-year-old fight to a keep a molybdenum mine off of Mt. Emmons, also known as Red Lady.

So many people over those decades have contributed to this moment. Holding off the mine while moly prices fluctuated and eventually declined mattered. An innovative watershed ordinance in town that was upheld by the state Supreme Court mattered. Constant vigilance by the community and its organizations like HCCA and the Red Lady Coalition mattered. A united message sent to those who came into the valley looking for moly riches and being told bluntly that would never happen mattered. A community that was not afraid to use the courts, diplomacy, publicity and passion to guide its deliberate future mattered. Not being afraid mattered. Period.

Nothing is finalized with this MOU (memorandum of understanding) deal yet. There is still a lot of work to do. But an agreement hammered out by representatives of the affected entities appears to be a solid road map toward a final solution that benefits all parties. Who’d a thunk it? The town, the county, the state, the feds, a giant mining company are all on the same page or at least reading the same chapter of a good book.

There will no doubt be a lot of smart people vetting every step of this deal along the way. As there should be. HCCA will continue to play its role as a watchdog. The RLC will monitor the economics. The town and county will be in the middle. The state is actually playing a major role in pulling it all together. And the feds are very aware of this progress. Perhaps as a result of last summer’s Gold King Mine incident, everyone is doing whatever they can to move this forward.

And the overall feeling is that this is a game changer. There is real opportunity.

The town council and county commissioners will formally consider the details of entering into that MOU agreement in a few weeks. There should be a comfort level with the direction this new development takes and an understanding of the outcome by all of us. Part of that will likely come in trust with our elected representatives and their staffs.

The community that has been so invested in this fight can look over the agreement on page 13. So touch base with your representatives to tell them what you think. Then let your councilperson or commissioner take a stand on what could be a new future—a future that has the potential to be mine-free with a critical water treatment plant that works and is safe. A future of collaboration instead of constant confrontation.

The change is upon on us. Now we can hope and begin the work to make that hope an honest reality. It is not time to pop the cork but it could be time to buy a bottle of good Champagne.

—Mark Reaman

 

Non Attorney – Client Privileged and Confidential Communication

TO: Town Council

FROM: John D. Belkin, Town Attorney

Barbara Green, Special Counsel

CC: Todd Crossett, Town Manager

DATE: February 15, 2016

RE: Memorandum of Understanding (the “MOU”) for Mt. Emmons

1. U.S. Energy Corp.  / Mt. Emmons Mining Company Transaction.

The MOU attached to this Executive Summary is the result of conversations among Freeport-McMoRan and its wholly-owned subsidiary, Mt. Emmons Mining Company (“Mt. Emmons”); the State of Colorado Department of Health and the Environment, Water Quality Control Division (the “Division”); State of Colorado Department of Natural Resources, Division of Reclamation Mining and Safety (“DRMS”); Gunnison County (the “County”); and the Town of Crested Butte (the “Town”; together with Mt. Emmons, the Division and DRMS, collectively, the “Parties”).

Mt. Emmons is a Party because U.S. Energy Corp. (“USE”) has transferred (or is in the process of transferring) all properties, mining and mill-site claims, improvements, permits and the mine project rights to Mt. Emmons.

2. Background Efforts on the Wastewater Treatment Facility.

Between 2006 and 2009 the Town, the County and High Country Citizens’ Advocates (“HCCA”) (collectively, the “Community Parties”) brought actions before the Division and the State of Colorado Office of Administrative Courts to make the Division require USE to satisfy certain surety requirements (i.e., pre-paid wastewater treatment plant operator contract and liquid financial assurances) and naming USE affiliated companies as co-permittees on the discharge permit (“Permit”) for the Keystone Mine wastewater treatment facility (“WTF”).  The administrative law judge found that although the Division has the authority to require USE to satisfy financial and other assurances as conditions to the Permit, the circumstances at the time did not appear to warrant the Court requiring the Division to impose financial and other assurances.

3. The MOU.

Conversations leading to the MOU began following a written request from the Town and the County in August 2015.  The Town and the County requested that the Division impose financial assurance requirements on USE because of concerns that USE might not have the financial capacity to continue to operate the WTF.  In response, the Director of DRMS, Ginny Brannon, and the Director of the Division, Pat Pfaltzgraff, convened a series of meetings among the Parties.  Over the last four months, as the conversations have progressed, the Parties agreed that the only way to resolve concerns would be to work in concert.  The Parties have spent considerable time discussing a cooperative partnership concerning the continued operation of the WTF, the reclamation of the mine site (the “Site”) and the disposition of the mining and mill-site claims and patented fee lands in connection with the mine.  Those goals are reflected in the MOU and can be summarized as follows:

– Protection of the environment through Mt. Emmons’ compliance with environmental laws and regulations;

– Parties’ implementation of technical solutions to environmental issues at the Site;

– Parties working on funding solutions to address environmental issues at the Site;

– Mt. Emmons’ disposition of the mining and mill-site claims and fee simple lands;

– Parties working with the federal legislative delegation on legislation to implement long-term solutions (e.g., disposition of mining and mill-site claims and fee simple lands).

– Parties’ development of site specific water quality standards for Coal Creek, with monthly technical meetings to address the same;

-Division’s continuation of the current Permit for the WTF at the Site until the June 2017 Gunnison Basin Rulemaking before the CDPHE, Water Quality Control Commission; and

Perhaps most importantly, the MOU also provides that Mt. Emmons voluntarily pre-fund the first two years of contactor labor costs at the WTF by escrow or other suitable mechanism (based on the annual operating budget, approximately $1 million) following transfer of ownership from USE to Mt. Emmons.  This substantially accomplishes what the Town and the County requested of the Division in their August 2015 correspondence.

4. Conclusion.

The MOU reflects the framework for the Parties to work cooperatively to accomplish the goals of the MOU.  It represents the beginning of what should be a long relationship of working together to solve the complicated issues that the Crested Butte community has worked on for decades.  The difference from earlier efforts is that unlike USE, Mt. Emmons is a willing partner in solving these issues with the goal of protecting the environment, and DRMS and the Division are taking leadership roles as partners with the Town and the County.

While the steps forward following execution of the MOU could well take years to implement, and with certainly require the continued commitment of the Parties working with the local community, on-going trust building is the linchpin to accomplishing the MOU goals.  The cooperation and efforts of Mt. Emmons, the Town, the County, the Division, DRMS, HCCA, Senator Bennett and many others will be crucial to our success.  The Parties would like to thank everybody for their efforts over the years in reaching this important day, namely the Crested Butte community, HCCA, the Coal Creek Watershed Coalition, the Red Lady Coalition, Senator Bennett, and the long list of others that have worked tirelessly over the years to reach this moment.

Mt. Emmons Project • February, 2016

This Memorandum of Understanding (“MOU”) memorializes the understandings between Mt. Emmons Mining Company (“Mt. Emmons”), a wholly owned subsidiary of Freeport-McMoRan Inc., and the local and state government parties (“Government Parties”) listed below (collectively, the “Parties”) should Mt. Emmons acquire the Mt. Emmons Mine Site, including the historic Keystone Mine and the existing water treatment plant (“Plant”) (collectively, “the Site”) from U.S. Energy Corp. (“USE”).

The Government Parties the Colorado Department of Public Health and the Environment (“CDPHE”), its Water Quality Control Division (“WQCD”) and Air Pollution Control Division (“APCD”), Colorado Department of Natural Resources (“DNR”), its Division of Reclamation Mining and Safety (“DRMS”) (collectively, “State Agencies), Gunnison County, Colorado (the “County”), and the Town of Crested Butte, Colorado (the “Town”).

The purposes of this MOU are to protect the public health, safety, welfare and the environment, and to serve as a basis for future cooperation and agreement among the Parties on the matters addressed herein.

The Government Parties will assist Mt. Emmons in identifying and supporting cost effective solutions at the Site to ensure on-going protection of public health, safety, welfare and the environment, in exchange for other considerations given in this MOU.

Mt. Emmons has agreed as a goodwill measure to voluntarily pre-fund by escrow or other suitable mechanism the first two years of contactor labor costs at the treatment plant (based on the annual operating budget of approximately $1 million) following the transition of site ownership to Mt. Emmons. Monthly invoices will be paid from the escrow account or other equivalent.

The Parties intend to mutually work to achieve the following:

Support Mt. Emmons in acquiring the Site and assist in ensuring compliance with all applicable environmental laws and regulations.

Find and implement technical solutions to the environmental issues at the site.

Discuss long-term funding for environmental issues at the Site.

Transfer any federal, state, and local permits and authorizations from USE to Mt. Emmons as soon as practicable after transfer of the Site.

Pursue disposition of the mining and mill site claims fee simple lands in a mutually beneficial way.

Collaboratively work to develop site-specific water quality standards for Coal Creek that may include monthly technical meetings with interested Parties.

Continue the current administrative extension of the Colorado Discharge Permit System discharge and stormwater permits until after a final decision is issued by the Water Quality Control Commission in the June 2017 Gunnison Basin Rulemaking proceeding.

Work with the federal legislative delegation on any mutually acceptable legislation required to implement long term solutions.

The Parties recognize that this MOU is only a first step in a long-term relationship. The parties commit to working together to achieve further agreements to address the actions listed above in more specificity.

The Parties do not intend this MOU to have any effect on the past, present or future liability of Mt. Emmons or any other related entity, as no such liability has been determined as a matter of law, and none is to be implied by or inferred from this MOU. Rather, Mt. Emmons has been proactively cooperating with the Government Parties to ensure sustained operation of the Plant and appropriate management of ancillary environmental issues described in this MOU. Consequently, this MOU should be read to reflect that the actions of Mt. Emmons are voluntary and not compulsory, and the Parties intend this MOU to facilitate a public-private partnership focused on addressing the issues in the manner described in this MOU.

 

This MOU is intended as a measure of good faith and fair dealings between the Parties and as a basis for long-term cooperation in furtherance of future agreements. The Parties do not intend this MOU to be, and shall not be, the basis for a non-cooperative legal action or vehicle for enforcement. Further, no person that is not a party to this MOU may rely on any provision of this MOU for any purpose.

Signed (see following pages for signatures):

William Cobb

Vice President

Mt. Emmons Mining Company

Larry Wolk, MD, MSPH

Executive Director and Chief Medical Office

Colorado Department of Public Health and Environment

Bob Randall

Executive Director

Colorado Department of Natural Resources

Glenn Michel

Mayor

Town of Crested Butte, Colorado

Paula Swenson

Chairperson

Board of County Commissioners of the County of Gunnison, Colorado

______________________________________________________________________________

William Cobb Date

Vice President

Mt. Emmons Mining Company

______________________________________________________________________________

Larry Wolk, MD, MSPH Date

Executive Director and Chief Medical Office

Colorado Department of Public Health and Environment

______________________________________________________________________________

Bob Randall Date

Executive Director

Colorado Department of Natural Resources

______________________________________________________________________________

Glenn Michel Date

Mayor

Town of Crested Butte, Colorado

______________________________________________________________________________

Paula Swenson Date

Chairperson

Board of County Commissioners of the County of Gunnison, Colorado

(Editor’s note: With this announcement from U.S. Energy, major movement with the Mt. Emmons molybdenum mine started today with a transfer of the mine assets and liabilities. We will have more details in the next issue of the Crested Butte News…)

U.S. Energy Corp. Continues to Execute on Its Previously Stated Business Plan to Transform the Company and Focus on Oil and Gas as the Primary Business

DENVER, Feb. 12, 2016 (GLOBE NEWSWIRE) — U.S. Energy Corp. (NASDAQ:USEG) a Wyoming corporation, entered into an Acquisition Agreement with Mt. Emmons Mining Company (MEM), a subsidiary of Freeport-McMoRan Inc., whereby MEM acquired the Company’s Mt. Emmons mine site located in Gunnison County, Colorado, including the Keystone Mine, a related water treatment plant and other related properties. Under the Acquisition Agreement, MEM will replace the Company as the owner and permittee of the water treatment plant, the associated mining assets and will discharge the obligation of the Company to operate the water treatment plant upon closing. Concurrent with entry into the Acquisition Agreement, and as additional consideration for MEM to accept transfer of the properties, including the water treatment plant, the Company entered into a Series A Convertible Preferred Stock Purchase Agreement, pursuant to which the Company issued 50,000 shares of newly designated convertible preferred stock with a cumulative noncash dividend to MEM.

The transaction is a continuation of the transformation of U.S. Energy Corp. to solely focus on its ongoing oil and gas business. Previously, U.S. Energy Corp. announced a restructuring of the company by reducing its overhead costs significantly, moving the corporate headquarters to Denver for better access to financial services and to improve access to oil and gas deal flow. U.S. Energy Corp. intends to migrate from a traditionally non-operator of oil and gas assets to an oil and gas operating company going forward.

With the divestiture of the Mount Emmons Mining operations, U.S. Energy Corp. will have eliminated its mining related operating costs of approximately $3 million per year, a portion of which relates to operation of the water treatment plant. Coupled with the overhead reduction of $4 million at year end 2015, approximately $7 million savings can be realized on an annualized basis. The reductions have been implemented to support the ongoing business plan of U.S. Energy Corp. during this industry downturn and low commodity price environment.

The company intends to focus on securing appropriate financial funding to replace its current Reserve Based Lender along with adding growth capital for potential oil and gas asset acquisitions. U.S. Energy Corp. primarily owns interests in oil and gas assets in the Williston Basin of North Dakota and South Texas Eagle Ford Trend. The Company intends to evaluate properties in a variety of basins where it has operating expertise.

Further, to address the stock listing compliance issue the Company has entered into a continued listing agreement with NASDAQ through June 2016.

Mr. David Veltri, Chief Executive Officer, stated, “This transaction will end our mining activities and together with the earlier reductions and savings will position U.S. Energy to execute our strategy to transform the company to profitability and to grow our oil and gas assets during 2016 and beyond.”

 

 

Like the muffed punt in the fourth quarter of last Sunday night’s premier football game between the Broncos and Patriots, there sometimes occurs an event (or events) that change the course of a game and even the end result. Crested Butte currently is flirting with some game changers.

—Significant broadband improvements could be headed to the valley, with some government help. The county and the local municipalities have joined forces to partner with Region 10, a group of six Western Slope counties that collaborate on economic development projects to get faster, cheaper, more reliable broadband to our area. The state would ultimately foot a big part of the bill to get this “backbone” infrastructure to the area that in a few years could lower Internet costs dramatically while speeding up service and making it more reliable. It appears it would be the type of broadband that would give confidence to those who need it for their work to live here. It could change the social makeup of the valley. Game changer.

—Building a 38,000-square-foot building in the Town Park could be a game changer. The Crested Butte Center for the Arts gave a presentation to BOZAR a couple of weeks ago and its team made a strong case for a big building with a cool preliminary plan. The demand for more “art” space is growing as the community expands and the Center seems to have become the catch-all for the arts in the valley. Bringing together uses currently spread out all over town and putting them under one roof (or two) means that roof has to be big. If approved, it would change the scale to the entrance of Crested Butte and change the message people get when coming in. Let’s not even talk pavement for parking. Less green and more art is not necessarily a bad message but it is a different message in that spot.

Adding to that less green part of the equation is a part of the recently completed Parks and Rec master plan. Do not forget that the plan calls for another 14,000 square feet of concrete to be laid down next to the proposed Center for the Arts for a new skate park.

Personally, I am not a big fan of big buildings and more concrete in Crested Butte—especially in the most visible park space in town. It messes with the scale that is different from other resort communities and keeps us different. (I was always a fan of the “campus” approach including that vacant lot across from the Center on Sixth Street). But if the town is headed that way, and BOZAR members seemed surprisingly compliant to the idea, this Center design team has some good ideas on ways to make it more palatable.

—Talks appear in the works to secure a modern and long-term water treatment plant on Mt. Emmons. It doesn’t come through the company with the rights to the molybdenum deposit (U.S. Energy) that is on shaky financial ground at the moment, but rather Freeport McMoRan, a giant mining company that inherited some  responsibility through a purchase of another company several years ago. But Freeport has money, stability and apparently an understanding of the need to help address a legacy mining situation just west of Crested Butte. As part of the talks about the treatment plant, the overall mining situation could come into play and there is a chance at a final resolution to the mining threat that has loomed over the upper valley for decades. Game changer.

—Owners of the property just north of town across from the Gas Café are tweaking a new proposal for 19 homes on the 44 acres. Cypress Equities felt pretty pissed by the result of annexation negotiations with the town last year and are now focused on a county development. According to their position last month, they were not rushing to hook up the home sites to the Crested Butte wastewater treatment facility and so were likely to ask for 19 wells and septic systems. This week, it appears there has been some thaw in the relationship and the developers and the town are seeking a new partnership to work out some sort of arrangement to avoid septic systems and get something other than another standard 19-home suburbia in the mountains.

—The Crested Butte-Mt. Crested Butte Chamber of Commerce and the primary public marketing entity in Gunnison Valley, the Tourism Association, is not only hopping on board the fat bike train, but hoping for a place in the engine. Chamber director Dave Ochs is a biker and he looooooves himself some fat bike. TA executive director John Norton is a biker and he is tooling around on a carbon fatty this winter. They both like trails and they see an opportunity. They are the main push behind the Fat Bike World Championships in January and Ochs likes to emphasize Crested Butte is a “bike town.” They want to catch this wave in the first set and provide a new standard for Colorado mountain resort towns in what appears to be a growing fat market.

Incidentally, that fumbled punt on Sunday was recovered by the Denver Broncos and led to the New England Patriots’ first loss of the season. The guy who fumbled the punt, Chris Harper, was cut and out of a job the next day.

Game changers have consequences.

—Mark Reaman

State, county, town and now Freeport-McMoRan collaborating 

by Mark Reaman

In what has been described as a “serendipitous” and “interconnected” moment, there could be real headway in a permanent solution to the Mt. Emmons water treatment plant and overall molybdenum mine situation.

While very preliminary, the signals are good that this new path with new players, in part spurred by last summer’s dramatic Gold King Mine release into the Animas River, could bring about substantial changes to the Red Lady situation.

Gunnison County, the town of Crested Butte, several departments in the state, mining giant Freeport-McMoRan and U.S. Energy, the company with rights to the local molybdenum deposit, appear to be headed toward a collaborative deal to upgrade and permanently fund the water treatment plant on Coal Creek and address the idea of a potential mine.

This most recent chapter in a very long story started late last August when the county and the town sent a letter to the state and feds expressing serious concern over U.S. Energy’s ability to maintain the water treatment plant, especially if an accident occurred at the plant. U.S. Energy had been taking a giant financial hit with the decrease in energy prices and it has only gotten worse, with its stock selling this week for under 30 cents a share.

The two local governments sent a letter saying that the environmental and human health consequences of any release of untreated mine drainage are beyond the governments’ response capacity. They asked the Colorado Water Quality Control Division to reopen a permit renewal process for the mine’s discharge permit, which regulates the water treatment plant.

Several state agencies, including the Department of Natural Resources, the Colorado Water Quality Control Division, the State Attorney General’s Office and the Colorado Division of Reclamation Mining and Safety, set up a meeting in October. Crested Butte town attorney John Belkin, Gunnison County attorney David Baumgarten and special counsel for the town, Barbara Green, met with them to discuss concerns about U.S. Energy and its financial ability to continue operating the plant. By all accounts, it was a positive meeting.

Shortly after that, Freeport-McMoRan, a renowned international copper, gold and molybdenum miner that operates the Climax and Henderson moly mines in Colorado, also came into the picture. While it never had an interest in the molybdenum beneath Mt. Emmons, the company bought Phelps Dodge in 2007. That mining corporation had acquired the company that originally built the water treatment plant. Freeport in essence became tied to the site through a connection of mergers and acquisitions.

“The day after that meeting with the county and town, the EPA had a meeting with Freeport-McMoRan to discuss situations like the recent Gold King Mine incident near Durango,” explained Andrew Ross, senior water quality scientist for the WQCD. “It was understood the Mt. Emmons situation could be similar if treatment at the water treatment plant stopped, so EPA Region 8 officials asked Freeport to look at its Superfund liability. And they did. It was serendipitous timing.”

Under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), because Freeport has ties to the original plant operator, it now has some liability for the plant. CERCLA is part of federal Superfund legislation.

“Understanding the CERCLA liability, Freeport-McMoRan said they would step in if treatment stopped,” said Ross. “Under Superfund, if you touch something you are then liable and because Freeport bought Phelps Dodge they have potential Superfund liability. They can prevent that by addressing the situation as it stands. If it went into a Superfund situation up there, the company would lose all control and the government would take over. They want to avoid that. Freeport has told us it wants a long-term solution to the site so there is a commitment by everyone to continue the dialogue.”

According to Nicole Rowan, WQCD’s water quality control clean water program manager, “We are in a very collaborative place right now with the state, Freeport, the county and the town.”

Rowan said that while the state has not talked to U.S. Energy officials about the situation, Freeport has. The Crested Butte News reached out to U.S. Energy chief executive officer David Veltri by e-mail but he did not respond. He did tell the News in October that the company wanted a “final solution to the mine.” In a conference call with investors two weeks ago, he said, “We continue to work through multiple avenues for divestiture of the project.”

“There is an interconnectedness with the efforts everyone has made,” said Baumgarten. “And I am talking about decades of work from hundreds of people—the people who worked with HCCA [High Country Conservation Advocates], the town, the Red Lady Coalition and everyone who advocated regarding these community issues. We are reaching a point of critical mass where a solution needs to be reached. It is very preliminary but everyone appears responsive.”

Belkin agreed. “This is a different path and one that looks very positive,” he said. “So many people had a hand in getting to this point, including the various town councils over many years. While preliminary in nature, and there are a lot of details to work out, we all feel good with the direction this is going.”

Ross said the state is still not asking the company for financial assurance or a bond to make sure there is money to operate the plant, “but we recognize U.S. Energy has some financial issues based on their recent financial statements.”

“There is no plan in case the company cannot operate the plant,” admitted Rowan. “We are working on that. No one wants to get to that point.”

While no formal agreements are signed between the interested parties, the state, county and town, along with Freeport-McMoRan, all appear dedicated to a long term solution, according to Rowan.

Freeport-McMoRan director of external communications Eric Kinneberg did not go into detail about the evolving situation from the company’s perspective but told the News that they are committed to continuing dialogue. “In October of this year, the EPA and CDPHE officials invited Freeport-McMoRan to discuss the Mt. Emmons water treatment facility. Freeport-McMoRan expressed a commitment to ongoing discussions with the regulators on the issue.

“Freeport-McMoRan is the parent company of a non-operating subsidiary that previously owned the Mt. Emmons site and constructed the water treatment plant,” Kinneberg made clear. “Freeport-McMoRan’s non-operating subsidiary was not involved in prior mining, which took place on the site from 1881 through 1970.”

“Freeport seems to be a good neighbor type of company,” said Ross. “We haven’t always seen that in the past. We are excited to work with them.”

“They have a good plant up at Climax and they have expertise in treating mine water. We are cautiously optimistic with what we see happening,” added Rowan.

“The lines of communication are very positive and everyone is interested in moving toward a permanent solution with the water treatment plant,” said Ross.

HCCA’s public lands director Alli Melton said the new development is exciting. “This looks like an opportunity to move toward a potential permanent solution,” she said. “We are committed to working towards a long-term sustainable protection for our watershed and Red Lady.”

“We are waiting to see the developments on this front,” she continued. “Our lawsuit should not be an impediment to a permanent solution that will protect Red Lady.  It’s important to keep an eye on the prize and make sure a permanent solution that protects the local watershed, continues the operation of the water treatment plant, and resolves the mine threat in perpetuity crosses the finish line.”

While early in the first quarter, it appears that ballgame may have actually started.

When lawyers and scientists start throwing around concepts like serendipity and connectedness, you know we have something to be thankful for this holiday weekend. The synchronicity of life can be subtle or shocking, but it is always happening and wonderful when it is noted.

Let’s look at a powerful example of the connectedness as it directly relates to a shadow that has loomed over the north end of the valley for 40-some years: The Red Lady mine situation.

As Crested Butte shifted from a mining economy to a tourist-based economy, the idea of a new industrial molybdenum mine on Mt. Emmons upset some of the new folks in the upper valley. Despite the history of mining in this mountain village, they (we) fought the idea with brains and brawn over the decades. It became a part of the Crested Butte story and its culture.

And now—sort of out of nowhere—there appears a new and initially promising path to lead the valley toward an end to this particular shadow. A mining firm with experience and money, Freeport-McMoRan, appears to understand it has a nebulous but legal connection to the aging water treatment plant on Coal Creek. While it never thought of mining here, one of the companies it bought years ago did. And that connection matters legally under federal Superfund regulations. So Freeport seems to be willing to stand tall and talk about how it can help address a seemingly never-ending issue.

County attorney David Baumgarten used the connectivity description. He gave some examples of the various threads that seem to be coming together to form the new path.

A. The connected efforts of the community and its citizens over decades;

B. The maturing and strengthening of the relationships between the local governments and the State;

C. The coordination between the State’s Division of Reclamation, Mining and Safety with the State’s Water Quality Control Division (in completely different State departments) thanks to their Directors and staff;

D. The coordination of the local, state and federal governments;

E. The candor of Freeport in being directly at the table;

F. The unfortunate but teachable moment that the Animas spill provides;

G. Perhaps the realization by new U.S. Energy officials reflected in the third quarter financials of liability and cost outweighing the slight prospect of future development. 

There is a respect and gratitude in Baumgarten’s examples to the work that took place from the early hippies in town to the current businessmen and women on the Red Lady Coalition, the tenacious enthusiasts of HCCA and the general citizens of the valley who wrote a letter or said a prayer to keep Red Lady free of a new mine.

He acknowledges the growing relationships between not only local governments in the valley but between those governments and the state and the feds—relationships not always on common ground, by the way. He recognizes the needed thread of a major mining group with resources to deal with a mining legacy in our backyard and that company being willing to be honest and helpful. Throw in a national calamity when a toxic spill contaminated the Animas River and plummeting energy prices that have wounded U.S. Energy’s ability to comfortably run the water treatment plant (along with new management for that company) and you have the series of developments that has led to this new path. Separate threads that alone are not particularly strong but together weave a powerful potential.

A senior water quality scientist at the state level, Andrew Ross, said that the day after a meeting with the state, town and county over their U.S. Energy concerns, the EPA had a meeting with Freeport-McMoRan to discuss situations like the Gold King Mine incident near Durango. The issue of Superfund liability on the Mt. Emmons water treatment plant was brought up and Freeport understood the situation.

“It was serendipitous timing,” Ross noted.

Yes it was.

Things happen for a reason. The Universe always works, whether you believe it or not. Understand that this is a brand new path. It is an unexplored path. It is a very preliminary path. But it is a path with light. The path may lead to nowhere soon. It may shine a light on the shadow to the west of town. It may lead to the final lifting of a weight from the shoulders of the community that has felt the pressure for decades. It may fizzle—or it may explode like a Fourth of July finale. But it is new and there appears to be optimism from everyone.

So here we are on another Thanksgiving weekend. The ski area has opened its lifts and snow is in the forecast. Smart people are working together to solve an old problem. I’m a believer in the Universe—in synchronicity. It appears we are in a time for real thanks. People are noting the connections and how they might all come together in that perfect sweet spot.

Have a wonderful Thanksgiving, everyone.

—Mark Reaman

This is our final question for our Q-and-A period with candidates for Crested Butte mayor and Town Council. You should have your ballot and they must be returned by November 3. We understand some people have already voted but we wanted to give candidates the opportunity to express their views during the final week of the election season.

This week we wanted to know their thoughts on political compromise, the potential Mt. Emmons mine and a Winter Travel Management Plan for the area drainages. We are requesting that the six candidates keep their answers to no more than 650 words.

The mail ballots should have all been received by eligible voters by now and they must be returned by the official election day of November 3.

—Mark Reaman

Glenn Michel, mayoral candidate

Do you believe in compromise to move issues along or is it more important to stick to principles?

As one of seven members of the Town Council it is very important to be able to work effectively with other council members. Compromise is a part of the legislative process along with the ability to listen, reason and understand. Most all decisions we make as representatives will involve some element of compromise. Our local government is set up that in order to move an issue along there must be four votes and no one has the ability to veto a decision. This process is focused on the collective desires and consensus building of the entire council rather than sticking to opinions of any one individual. I believe this structure is the most democratic form of government, although it is admittedly messy at times!

From a reader: What should the council be doing in terms of the potential U.S. Energy/Red Lady molybdenum mine situation?

I was surprised this question did not come up during the Candidate’s Forum as this is the most important issue for our town, particularly at this time. There is much the council should be doing:

Maintain and ensure our watershed ordinance is upheld.

Insist that adequate financial surety for the mine’s water treatment plant is in place.

Continue to support the Coal Creek Watershed Coalition and their efforts to monitor and protect water quality in the Valley.

Support strong working relationships with High Country Conservation Advocates and the Red Lady Coalition.

Encourage the state to find and support solutions to deal with mines statewide.

Maintain an open mind for potential solutions from wherever they come.

Also from a reader: Will you prioritize and support development of an updated Winter Travel Management Plan for the Gunnison National Forest? Would you allocate town resources to this endeavor? Why or why not?

Yes, the council should make it a priority to support an updated winter travel plan. As more people are enjoying our backcountry during the winter we need to keep up with management of the increased user base and the emerging uses. As far as allocating resources I don’t know what that would entail at this point? Certainly we would invest staff time and potentially money for signs. I would also support the council appointing a member to represent the town during the development of any plan.

Should the marshals be writing more tickets for any reason?

The council would first need to identify the problem and work with staff in developing solutions to remedy the identified issue. Ideally, the solutions would be proactive and not punitive in nature. I don’t feel that by simply writing more tickets it will solve a problem, as writing more tickets could have unintended consequences.

Would you work to adjust any town taxes or fees currently on the books?

The council just worked through and approved next year’s budget. There were no major changes to any taxes or fees. As we are going through this upcoming year we can see if there is a need to adjust any town taxes or fees.

If you were going to paint an Elk Avenue light post a new color to symbolize something about the community, what color would it be and why? 

I think the light posts on Elk look great painted green!

Favorite movie genre? Horror? Action? Comedy? Drama? Chick Flick? Documentary?

Action, on the big screen.

Are you dressing up for Halloween?

We live at the end of Whiterock Avenue and have a ton of Trick or Treaters. I will be handing out candy but won’t be dressing up.

W.E. “Skip” Berkshire, mayoral candidate

Do you believe in compromise to move issues along or is it more important to stick to principles?

Compromise. There are very few issues that have only one acceptable solution. The dysfunction we see in our federal legislature and too often here locally is largely related to stubborn adherence to a particular point of view. I want the next council to be one that is marked by its ability to seek sensible compromise and move on. I will work hard to that end.

From a reader: What should the council be doing in terms of the potential U.S. Energy / Red Lady molybdenum mine situation?

Let me say first that the council must be very careful not to jeopardize its quasi-judicial responsibility as the permitting authority within our watershed. We must not exhibit any prejudice or bias in our dealings with potential applicants. Our interaction with USE should be through our town attorney and special counsel representing the town as well as appropriate state and federal representatives. The Town Council will obviously have opportunities to consult with our attorneys and provide direction as appropriate. This is a really significant issue and we must make sure that it is handled well.

Also from a reader: Will you prioritize and support development of an updated Winter Travel Management Plan for the Gunnison National Forest? Would you allocate town resources to this endeavor? Why or why not?

Yes, I support development of a Winter Travel Management Plan. The increased winter use of the backcountry surrounding Crested Butte will lead to inevitable tension and conflicts. We need to be proactive and support establishment of guidelines and rules that allow for balanced use of our backcountry in winter. The process employed by the Forest Service (FS) to create a Summer Travel Management Plan should be used to create a similar Winter Travel Management Plan. Unfortunately, the FS is unwilling to take a leadership role in this needed process. As Mayor, I would urge the FS to step back into a leadership role. If they continue to refuse, I would support a joint effort with the county and community leaders to facilitate a process to create a Winter Travel Management Plan. Doing nothing is not an option.

Should the marshals be writing more tickets for any reason?

I respect the judgment of our Town Marshals. They know when, where, and how to enforce our laws. I don’t want them to compromise their professional integrity or “user friendly” image by writing tickets to achieve some arbitrary objective. If the council has a particular concern, we should ask the Town Marshal to make a recommendation regarding that concern.

Would you work to adjust any town taxes or fees currently on the books?

There are a lot of fees charged by the town. Almost all of them are based on recovering cost incurred in areas ranging from providing copies of documents to building permits and even our water and sewer services. In total, the revenue from all fees comprise about 21 percent of the town’s total revenue. I would support a review of fees to insure that we are achieving the objective of the fees and making adjustments where necessary. With respect to taxes, the town annually adjusts the mill levy for property taxes to meet TABOR requirements as well as budget needs. The town finance director does an excellent job in recommending appropriate mill levy adjustments to the council.

If you were going to paint an Elk Avenue light post a new color to symbolize something about the community, what color would it be and why? 

I would leave them green. That color symbolizes a lot about our community—we strive to be “Green” and we’re surrounded by beautiful green forests. Sounds pretty good to me.

Favorite movie genre? Horror? Action? Comedy? Drama? Chick Flick? Documentary?

Comedy and drama. For example, Dr. Strangelove and Out of Africa.

Are you dressing up for Halloween?

No. My annual costume outing is the Al Johnson Uphill/Downhill Telemark race each spring.

Erika Vohman, council candidate

Do you believe in compromise to move issues along or is it more important to stick to principles? 

It depends on the issue. In some cases compromise can be great. In other cases, compromise is a lose-lose situation that leads to ineffective, half-baked results.

From a reader: What should the council be doing in terms of the potential U.S. Energy/Red Lady molybdenum mine situation? 

I think the council has a responsibility to stay very involved and to support HCCA however we can in their work to protect Red Lady and to be completely transparent in any dealings with U.S. Energy. I think it best to delegate this issue to HCCA as they have the experience, knowledge and staff to address the issues.

Also from a reader: Will you prioritize and support development of an updated Winter Travel Management Plan for the Gunnison National Forest? Would you allocate town resources to this endeavor? Why or why not? 

Yes, I would support that and allocate resources if necessary. I think we need to allow snowmobiles in some places, but not others. I would love to see an odd/even alternating day use system established for all drainages. This would allow certain days to be quiet/non-motorized and other days to be open for motorized use.

Should the marshals be writing more tickets for any reason? 

Yes, I would like to see more speeders and other traffic violators stopped and ticketed. People speed around town because we’ve gotten away with it basically forever. I’m as guilty as the next person, but once I get a $75 ticket, you bet I’ll slow down!

Would you work to adjust any town taxes or fees currently on the books? 

Yes, I would like to see town collect more fees for traffic violations to offset costs of traffic-calming devices and better signage. I think we need to enforce the fee system for people leaving their accessory dwellings vacant.

If you were going to paint an Elk Avenue light post a new color to symbolize something about the community, what color would it be and why? 

White, to honor the incredibly deep, powdery winter of 2015!

Favorite movie genre? Horror? Action? Comedy? Drama? Chick Flick? Documentary? 

Comedy.

Are you dressing up for Halloween? 

I’m going as Towelie from South Park.

Paul Merck, council candidate

Do you believe in compromise to move issues along or is it more important to stick to principles?

In most decisions, compromise is part of the process. Hopefully with our council principles should not need to be given up.

From a reader: What should the council be doing in terms of the potential U.S. Energy / Red Lady molybdenum mine situation?

Informing the public about the current happenings and emergency protocols and response. Creating a link to the town website that the public can get questions answered and updates.

Also from a reader: Will you prioritize and support development of an updated Winter Travel Management Plan for the Gunnison National Forest? Would you allocate town resources to this endeavor? Why or why not?

I am excited to work on these issues and support Winter and Summer Travel Management Plans with the forest service. A lot came from the Gothic town meeting this summer. We all have a lot on our plate to work on these pertinent issues. Yes town resources may need to be allocated and I am open to joining the sub-committee to look at this issue.

Should the marshals be writing tickets for any reason?

I always have been extremely pleased in the operations of the Marshal’s Office. They have always been open and have been great advocates of Crested Butte. Citizens and especially children need to use caution when crossing the streets; stop, look and listen.

Would you work to adjust any town taxes or fees currently on the books?

I believe it is the council’s and any citizen’s duty to help improve and update taxes and fees to meet the needs of a constantly changing community.

If you were going to paint an Elk Avenue light post a new color to symbolize something about the community what color would you paint and why?

Our town staff and public works are busy enough and there is no need to waste valuable resources painting our posts. Crested Butte in itself symbolizes many things—look around.

Favorite movie genre? Horror? Action? Comedy? Drama? Chick Flick? Documentary? 

Me, my kids and wife take turns in picking movies. The diversity of different genres is what I enjoy.

Are you dressing up for Halloween?

My wife, Lisa, and I are participating in a Murder Mystery dinner on Elk Ave. and I am portraying Marshal Homer Watson, so watch your speeding. This is a very important and busy evening for our children and community.

Aaron J. Huckstep, council candidate

Do you believe in compromise to move issues along or is it more important to stick to principles?

I believe in compromise. You must know your principles, though, in order to set boundaries for how much you are willing to compromise.

From a reader: What should the council be doing in terms of the potential U.S. Energy/Red Lady molybdenum mine situation?

I support the town’s work with Gunnison County on a renewed request for the state of Colorado to require a performance bond from U.S. Energy. This is a good move in light of U.S. Energy’s declining financial condition. There is room for further action, though. We must seek to understand our greater community’s attitude towards Mt. Emmons. The citizens of Crested Butte are overwhelmingly opposed to a mine on Mt. Emmons, but how far down the valley does that sentiment stretch? In particular, do the residents in the Ohio Creek Valley and Gunnison support a “final resolution” for Mt. Emmons that takes resource extraction off the table into perpetuity? And, just how “valuable” do citizens view the issue? It is much easier to support a final resolution if it comes for free or at a low cost—say $5 per year. As the price goes up, though, we should expect erosion in the support for a final solution.

Here’s why this matters: We have an information gap. No one knows the true sentiment of the entire valley when it comes to Mt. Emmons. No one knows citizens’ tolerance for contributing financially towards a solution, either. If the community at large ever gets a chance to take Mt. Emmons off the table, it may require the citizens to close the gap on funding—that’s reality. And if that chance comes along, we cannot squander it—we must create a situation where there is no chance for failure. Obtaining this information will not only help the community, it will help our negotiators.

Make no mistake: I support requiring that current and former owners of Mt. Emmons remain financially liable for water plant operations. I also support exhausting federal, state and private funding options before we ask citizens to help. But at the end of the day, I choose certainty over the unknown—unknown timeframes, unknown control structures, unknown future. Gathering this information will best serve our citizens by giving us the best chance to take control of our future without a Gold King-like incident

I’m open to the possibility that the town isn’t the best entity to gather this information. If the town owns the information, it becomes public, which may place us at a disadvantage when negotiating with other stakeholders.

Also from a reader: Will you prioritize and support development of an updated Winter Travel Management Plan for the Gunnison National Forest? Would you allocate town resources to this endeavor? Why or why not? 

I support asking the USFS to consider making this a priority. I also support the town (with Mt. Crested Butte and Gunnison County) being a convener for meetings designed to understand the community’s long-term interest. I support allocating a small amount of town resources to this effort, conditioned on financial buy-in from other constituent groups as well.

Should the marshals be writing more tickets for any reason?

No.

Would you work to adjust any town taxes or fees currently on the books?

Yes—the pillow tax. And if 2A fails, the council must revisit the town’s fund reserve policies.

If you were going to paint an Elk Avenue light post a new color to symbolize something about the community, what color would it be and why? 

I’d paint one at the Four-way, rainbow colored to remind all of us that our community welcomes and respects a diversity of opinions and people.

Favorite movie genre? Horror? Action? Comedy? Drama? Chick Flick? Documentary?

Nature-based documentaries.

Are you dressing up for Halloween?

Yes.

Laura Mitchell, council candidate

Do you believe in compromise to move issues along or is it more important to stick to principles?

Yes, compromise to accomplish missions and goals for the town.

From a reader: What should the council be doing in terms of the potential U.S. Energy/Red Lady molybdenum mine situation? 

If I am elected I pledge to get more familiar with our current role and what we can do to ensure safety for our town watershed.

Also from a reader: Will you prioritize and support development of an updated Winter Travel Management Plan for the Gunnison National Forest? Would you allocate town resources to this endeavor? Why or why not? 

Yes to a Winter Travel Management Plan. Town has social responsibility for supporting it economically. With increased use in the backcountry some guidelines, not rules, need to be established for the many different users of the U.S. Forest.

Should the marshals be writing more tickets for any reason? 

Speeding and stop signs.

Would you work to adjust any town taxes or fees currently on the books?

No.

If you were going to paint an Elk Avenue light post a new color to symbolize something about the community, what color would it be and why? 

Rainbow stripe.

Favorite movie genre? Horror? Action? Comedy? Drama? Chick Flick? Documentary?

Comedy.

Are you dressing up for Halloween? 

One-armed zombie! Boo!

Wants to see insurance bond and approved plan of operations

By Alissa Johnson 

High Country Conservation Advocates (HCCA) filed a lawsuit against the U.S. Forest Service on Monday, October 5, challenging the agency for allowing the continued operation of the U.S. Energy-owned water treatment plant near Mt. Emmons without key regulatory measures in place.

HCCA filed the suit in District Court in Denver, citing the lack of an approved Plan of Operations (PoO), a bond to insure the plant’s ongoing operation, and any environmental review of those operations.

The plant, which is located about three miles upstream of Crested Butte, treats acid mine drainage from the Keystone Mine workings on the south side of Mt. Emmons. According to information provided by HCCA, the plant treats about 350 gallons of water per minute and ensures that heavy metals like cadmium, lead, and zinc are not released into Coal Creek in violation of water quality standards.

The cost of operation is from $1.8 million to $2 million each year, and yet no bond exists to cover that cost should U.S. Energy ever stop operating the plant.

“We’ve been working to address the bonding issue for just about a decade now,” explained HCCA’s public lands director Alli Melton.

Most recently, those efforts included meeting with stakeholders like the Town Council of Crested Butte and the Board of County Commissioners, encouraging them to ask the Forest Service to require a bond.

But for HCCA, a few key developments seemed to demand more action. In August, roughly 3 million gallons of toxic mine waste water and tailings spilled into the Animas River near Silverton, Colo. when a remediation project went awry, highlighting the consequences of acid mine drainage.

In addition, U.S. Energy started to make headlines with declining stock prices and a major corporate shakeup. Last week, the Larsen family, which founded and ran U.S. Energy for nearly 50 years, stepped down from top management positions.

“Our headwater community and down-stream communities are vulnerable as the result of the Forest Service’s inaction.  HCCA’s concern over the lack of a bond for the water treatment plant is not a new one–rather, it’s an issue we’ve raised for years with the Forest Service.  As we’ve watched U.S. Energy’s finances continue to decline over the last year, this outstanding concern has only become more pressing,” Melton said.

Melton pointed out that the Forest Service itself has admitted the need for both a PoO and a bond.

In a 2012 decision, the Forest Service wrote: “No bond currently exists for this very extensive operation on National Forest System lands. In accordance with 36 CFR 228.13(a), a reclamation bond is appropriate and is required.”

“We just want this to come to a solution that protects our community, and we don’t think it’s appropriate to have the Forest Service continue to leave our community and our community’s values at risk,” Melton said.

According to Forest Service spokesperson Lee Ann Loupe, the agency is unable to comment on issues in litigation.

The Greek philosopher Heraclitus said, “The only thing that is constant is change.” 

There is plenty of change happening right now.

—The leaves are the obvious one. We might be past the peak, so our recent glorious golden days will soon turn into a steady autumn brown. Enjoy the final colors before the wind takes them all.

—Mt. Crested Butte ski shops are changing hands like falling autumn leaves. Flatiron Sports is changing ownership. GJ and Oz have passed the torch to Christy Sports. Also, Steve Bunt sold Crested Butte Sports to a longtime customer from Longmont. Those are big changes up there. Good luck to all those guys.

—As we begin to change our thoughts from single track to powder stashes, it seems a change in the valley clientele now includes a lot more people from the Front Range in both summer and winter.

—Scientists say they are almost certain water flows part of the time on the surface of Mars. That could be a game changer.

—Colorado’s Republican and Democratic senators actually worked together on a good response to a threatened government shutdown. According to the Denver Post, Democrat Michael Bennet and Republican Cory Gardner planned to introduce legislation that would impose strict rules—including the possibility of arrest—on the Senate whenever one or more federal agencies were thrown into shutdown mode. The rationale, said Bennet and Gardner, was to keep lawmakers in town to negotiate. Just these two working together is sort of a change.

—At an economic forum in Gunnison last week sponsored by the Federal Reserve Bank of Kansas City, Denver branch, and hosted by Gunnison Bank and Trust president Ashley Burt, who sits on the branch board—we saw statistics showing that the economy is changing in the state and the region. It is not a quick change but it is changing in the right direction.

—U.S. Energy just went through a major corporate shake-up. It’s too soon to know what that means for a potential molybdenum mine that looms over the upper valley, but change is not only constant, it can be good.

Let’s focus on that last one…

In the many years we have dealt with the Larsens and U.S. Energy, it hasn’t always been the smoothest of relationships. No surprise there. The Larsens would probably agree that they primarily see this valley as a place for a molybdenum mine to make the company some serious cash. I’ve always felt that given the huge start-up costs and giant regulatory hurdles, that idea has been a dream—especially as the price of moly sinks and is now at about five-and-a-half bucks a pound.

Most of us living here now view this place as our home that has shifted away from the mining history of the past and deliberately chosen a new road with recreation and tourism as the prime economic focus.

Mining and tourism naturally brings a certain conflict.

With just a few conversations and absolutely no proof, my gut feeling is that Mark and Keith Larsen have been emotionally invested in the idea of the high-grade molybdenum deposit in part because their father discovered the mother load of some of the highest grade moly in the world. But moly isn’t gold, especially at $5.50 a pound. So, despite gargantuan costs to really get a mine operation even started and the fact that real moly mining companies partnered and then walked away given the realities on the ground, the Larsens just couldn’t let go.

It now appears the Larsens have been pushed from the company founded by their father. New management headed by David Veltri is taking the reins of U.S. Energy. Changes at the top could mean new opportunity.

The Larsens actually changed the company when they expanded into oil and gas and for a while it brought U.S. Energy significant revenue. But oil and gas prices have plummeted this last year and the impact on the company is real. Revenues are shallow and the stock price is horrendous. But the legal obligation to run the water treatment plant on Mt. Emmons costs more every year and stands at about $1.8 million annually.

So the question now is whether there is opportunity with the changes at U.S. Energy to negotiate some sort of final agreement to rid the valley of even the possibility of a mine looming over the west side of Crested Butte. That industrial possibility has been there for decades and while mining has a large history in the community, few think a moly mine three miles from Third and Elk is a progressive idea in these times.

But what sort of solution is possible? The financial and regulatory cost of even getting a mine to pull up the first bucket-load of moly is so huge that it is a long shot unless molybdenum suddenly becomes many times more valuable than the current price. And given the fact that moly is a common byproduct of copper mining, there is absolutely no shortage of molybdenum in the world. A basic understanding of economics (that’s as much as I have) indicates the equation just doesn’t add up to a new mine up the road.

So while there is value in putting the specter of a moly mine to rest, it is not worth selling the farm for. But opportunity is opportunity, so it is certainly worth re-opening talks with a new U.S. Energy management team to see if the new people in charge want to get that liability off their books. We might be able to somehow help them with that.

Assisting the struggling oil and gas company to lose a hard-rock mine liability and make the company more solid financially might just be possible—if the company and community can somehow figure out how to pay for the water treatment plant in perpetuity. I’m not sure what the final solution is, but now could be a good time to start exploring for a new answer.

It seems everyone involved, including the new company CEO, would be open to the kind of change that puts an end to the question and to the fight.

Change is constant and change can be good.

—Mark Reaman