La Plata County’s only operating coal mine is set to run out of reserves in about two years, prompting the company to ask for an expansion of 950 acres of underground workings about 20 miles west of Durango.
On Friday, the Bureau of Land Management announced a 30-day public comment period on the proposal, which will end July 9. A public meeting will be held at 4 p.m. June 20 at the Breen Community Building, 15300 Highway 140 in Hesperus.
According to the BLM, if GCC Energy LLC – operators of the King II coal mine near Hesperus since 2007 – is not granted an expansion, the company could go out of business.
Jennifer Maiolo, BLM mining engineer, said in a prepared statement that GCC Energy’s production at King II has averaged about 700,000 tons per year. At this rate, she said there is about two years of coal available before the company runs out of reserves. “If approved, the lease modification would allow the company to continue operating,” Maiolo said.
From 2012 to 2016, state records show the company averaged about 734,614 tons of coal per year. However, production ramped up significantly in 2014 and 2015 when 970,790 and 813,677 tons of coal were produced, respectively. But in 2016, GCC Energy had a dip in production, producing 628,953 tons of coal.
GCC Energy officials responded late Monday that the modified permit would “allow the continued operation of the mine at curent levels.” The company did not say how long the mine would be able to continue operations or how many new employees would be hired if the expansion is approved.
GCC Energy applied in 2014 for a license to explore new areas that could be mined because reserves on its 1,300-acre allotment were about to run out, and it threatened local jobs and tax revenues, the company said.
Last August, six months after the Secretary of the Interior Sally Jewel called for a pause on new coal production leases, GCC Energy received an exemption because of its dwindling mine reserves.
As a result, the BLM authorized GCC Energy to drill up to 23 exploration holes on 5.3 acres around Hesperus. The project was slated to begin last August and take about two months of work. The BLM recently released the preliminary Environmental Assessment for GCC Energy’s request, which now requires the public’s input.
Over the years, the mine has drawn some complaints, especially from residents along County Road 120, who endure round-the-clock traffic from the mine, with the exception of Sundays.
Environmental groups, too, take issue with the use of coal, which is a significant contributor to greenhouse gas emissions. In May 2016, Wildearth Guardians filed a federal complaint claiming GGC Energy is taking out more coal than is federally allowed.
“King II Mine has a huge impact on the local community – some of whom have come forward to Guardians with concerns about the destructive impacts of the operations,” said Shannon Hughes, a climate guardian for Wildearth Guardians. “The federal government can’t continue to give in to the coal company’s demands, over the wishes of the people.”
GCC Energy, for its part, said the mine contributes about $3 million in taxes and royalties to the state and county. Gina Nance, GCC vice president of environment and energy, said in September the employee count was down to about 90, a 30 percent reduction since January 2016.
“The whole industry, it’s depressed,” Nance said at that time. “When you’re competing with other energy sources, it’s going to be hard to compete a little bit.”
Across the county, the use of coal for energy has been on a downward spiral because of the preferred alternative of natural gas, a cleaner and much cheaper option. GCC Energy has said coal produced at King II mainly feeds the cement plants of its parent company, Mexican-based Grupo Cementos de Chihuahua.
The BLM, in its press release, said the agency is required by law to consider leasing federal coal. Throughout Colorado, six operating coal mines on public mineral estates create 6,000 jobs and contribute $42 million in federal royalties to the state, the agency said.
jromeo@durangoherald.com