The Energy Blend: Deserado Mine pays more in fines than in Moffat County taxes
November 4, 2016
Craig — This year, underground coal mine Deserado has already paid more in fines to the U.S Department of Labor, Mine Safety and Health Administration than it has paid to Moffat County for 2015 taxes.
Sitting just 10 miles east of the Colorado-Utah border, the Deserado mine employs about 170 miners and produces about two million tons of coal a year that is shipped via private railroad line to Deseret Power's Bonanza Power Plant located south of Vernal, Utah.
The plant is a 500-megawatt coal-fired power station.
The administration has cited the mine with almost 300 safety violations since the start of 2016 for which they have paid $73,549 in fines, have another $46,000 in proposed fines, with additional fines not yet assessed for 15 violations and seven violations moved forward for hearings.
In January 1996, a fire temporarily closed the mine and on Oct. 29 of that same year Ted Munford, a surface mechanic for the mine died when the raised bed of the Euclid haul truck that he was driving struck an overpass at the mine, said the MSHA report on the accident.
The mine "leases land for a small portion of the railroad line from Moffat County," said David Crabtree, general counsel for Blue Mountain Energy, which owns and operates Deserado Mine. "And paid just over $65,000 in 2015 taxes to Moffat County."
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This year the mine paid just under $900,000 in 2015 taxes for all holdings, including vacant land, agricultural land, personal property and minerals in Rio Blanco County.
The fate of the mine is tied to power plant coal restrictions
Bonanza was set to be shuttered in 2016, according to information on the Law 360 website, however a 2013 approved expansion of Deserado kept the mine and the plant going. Yet it also garnered the attention of organizations concerned about the impact of mine expansion on air quality in the region.
Last October two separate legal actions brought against the Environmental Protection Agency for failure to analyze the impact to air quality for the mine expansion and continued operation of the plant were brought forward by WildEarth Guardians and the Sierra Club.
Actions resulted in a settlement that restricts the Bonanza Plant in 2020 to burning no more than 20 million more tons of coal unless measures are taken to make major upgrades to the system to reduce air quality impacts said the settlement agreement made before the Environmental Appeals Board of the EPA.
"Putting a lifetime limit on coal consumption gives Deseret the opportunity to create a plan to replace Bonanza with energy sources that will be cleaner, safer and more cost-effective than coal," said Senior Campaign Representative for the Sierra Club's Beyond Coal Campaign Nellis Kennedy-Howard.
The Bonanza Power Plant is Deseret Power's primary generating resource, according to their website.
"There is no mine or plant closure date. The current lease is held for underground mine operations to 2030 and beyond," Crabtree said.