Governmental Coal?

Companies have right to mine on federal property

BY MARY MUSIC

STAFF WRITER

The coal economy of Eastern Kentucky fights to keep a constant balance between the sustainability of the region's natural resources and the demand for growth, opportunity and expansion. The struggle goes beyond what's being dug up or taken off of privately-owned land.

“We're eat up with coal mines,” said Rodney Holbrook, resource manager for the U.S. Army Corps of Engineers at Fishtrap Lake, a federally-owned property. “I can't think of any place you can go at Fishtrap without seeing some type of mining activity.”

There are several active mining permits on governmental properties in Eastern Kentucky, and most of them are being conducted under mineral lease agreements or right-of-way lease agreements that authorize “wheelage” or “in-kind” payments of equipment or services in return for access coal or minerals owned by coal companies.

At Fishtrap Lake, there are thousands of active permits in the lake's 400 square mile watershed, and approximately 95 percent of the watershed is controlled by Virginia, Holbrook said. The area is also home to 122 active gas mines, he said, but only a handful of them are located on Corps' property.

Holbrook said the Corps only owns a portion of the mineral rights on Fishtrap Lake property, and those areas surround the dam, where mining isn't taking place.

Most of the mining going on around the lake is being conducted at the behest of other mineral-right owners.

The Clintwood Elkhorn Coal Company is conducting the majority of the mining activities on Corps' property at Fishtrap Lake. The company contracted out several permits to other companies that are doing surface mining, deep mining, and high-wall mining in the area.

Dean Childress, an engineering supervisor at Clintwood Elkhorn Mining Company, said they obtained a lease from the Kentucky Berwind Land Company for the mineral rights on Island Creek, located near the lake, and surface mining operations in other locations. Childress said the company has one active deep mine and two active surface mines on Corps' property at Fishtrap, and 13 other mining operations on non-government land around the lake.

Though some people think otherwise, Holbrook said Fishtrap Lake “is no different than the average Joe” when it comes to the ownership of mineral rights.

“A lot of people have the misconception that since the government owns the surface rights, they are in charge of the mining,” Holbrook said. “That's not true. We're no different than the average Joe. If they come in and drill a well on your property, they can come in and drill a well on ours, the taxpayer's, everybody's property.”

“If I had millions of dollars of coal in the ground, I'd be wanting someone to mine it, too,” Holbrook continued. “It's hard to find that balance between the nation's energy needs and what our environment needs. We do that with responsible mining practices. ...We are not going to let anybody turn over a stone in the road unless it's legal.”

Because the Corps doesn't own mineral rights to coal or gas being mined there, they are negotiating wheelage payments for coal truck passage along coal haul roads scattered throughout Corps' property.

Dewey Lake

Mining on federal property isn't restricted to operations at Fishtrap Lake. Miles away in Floyd County, one coal mining company just completed an underground mining operation at Dewey Lake, one of the state's oldest lake projects, nestled near the Jenny Wiley State Resort Park.

Jenny Wiley State Park Manager, Scott Ringham, said coal mining operations are “creeping in” on the state park and around property near the lake, but coal mining on government property isn't “out of the ordinary.”

Corps representatives at Dewey Lake estimate that there are 167 active mines in the lake's 207-mile watershed. Only two active mines are currently on federal land at Dewey, and those operations are headed by Pontiki Coal.

Chuck Minsker, a spokesperson for the Corps, said that there is no active mining for federally-owned coal at Dewey Lake. The only activity, he said, is an underground haul road that connects two different mining areas being mined by Pontiki Coal. The company, Minsker said, owns the mineral rights on both sides of that flowage easement, an area where the Corps purchased mineral rights when the lake was constructed in the 1940s.

John Small, the general manager of Pontiki Coal, said the company finished mining an underground mine, Excel Mine No. 2, on Corps property at Dewey Lake last month. That mine, Small said, was 400 feet below the drainage flow of the lake and it caused no substantial surface damage.

In return for the right-of- way easement, Pontiki Coal paved the downstream recreational area at the spillway last year and the company is currently refurbishing the playground at the lake's Spillway recreational area.

Federal regulations

The Bureau of Land Management, a federal organization that administers mineral estates across 700 million acres in the U.S., is responsible for overseeing “balanced management of public lands and resources and their various values so that they are considered in a combination that will best serve the needs of the American people,” according to the agency's web site.

Ken Adams, the Bureau of Land Management's Mineral Division Supervisor, confirmed that the BLM oversees 11 different gas wells, handled by four different operators, on federal property at Fishtrap Lake and nine different gas wells, four that are abandoned, at Dewey Lake. The BLM oversees mining on federally-owned properties in these areas through the Mineral Leasing Act of 1920 and the Federal Coal Leasing Amendments Act of 1977.

Adams said the BLM has not authorized coal mining on federally-owned properties at Fishtrap Lake or Dewey Lake. Any active mining, he said, is ongoing because of “grandfathered” or “outstanding” mineral rights, which means mineral rights are owned by other companies or individuals who have the right to mine the minerals as long as they abide by mining regulations.

Adams spoke with Dan Hopkins, an engineer for Pontiki Coal, about mining at Dewey Lake. He said the company is in compliance with federal regulations on a 1,000-feet easement that they previously mined through and are using now as an underground haul road to access coal that they own on the opposite side of the Corps' property.

“We're aware of the easements and we allow minimal amounts of coal that are mined in this type of situation,” Adams said. “If we didn't, it would cost the coal company tremendous amounts of money to get to their coal. ...If is was a substantial amount of coal, we'd have to lease it to them, but it's been determined by the Federal Government to be very small amounts of coal. They've made agreements with the Corps for that right. We don't regulate their right to do that.”

Referring to statements made by Stewart Grange, BLM's mining engineer, Adams said the only active coal mining in Kentucky that's overseen by BLM on federal land is a U.S. Forestry Service lease with the Bledsole Mining Company.