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Another

ENERGY INDUSTRY IN CARBON & EMERY COUNTIES

publication

Volume 36 Brought to you by

Sun Advocate

Emerry Count nty

Pro ogre ess

March 2012


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March 2012 – Carbon/Emery Energy Guide – 3

A coal truck departs after depositing coal in a reserve coal pile across Huntington Canyon from the two unit 900 Megawatt Pacificorp Power Plant.

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4 – Carbon/Emery Energy Guide – March 2012

ENERGY 2012 For 35 years years, the Sun Advocate and Emery County Progress have been bringing eastern Utah our energy guide each winter or spring. The publications have always been for those in our community who provide jobs in the most dynamic industry in the world, energy. It has been for the companies to bring information to the public, for the miners to spread the news about their profession and for the jobbers to show off their part in the coal and gas industry. Most of all, the special is about our readers, who want to know more about our energy industry, its technology, the issues facing it and what its future is. There are many challenges facing the energy industry today. Times are changing and the sure thing of coal being king seems to be waning as people start to look to alternative to power for homes and businesses. But coal still provides around 50 percent of the electricity used in the United States. In Utah, it provides nearly 90 percent. This publication contains articles about coal, its production and its importance to our way of life.

But there are also a lot about new technologies and different kinds of energy that are now and could be impacting the area in the future. While being rich in coal, this area also has huge amounts of coal bed methane natural gas and tar sands, which are just in their infancy when it comes to development. The area also has a lot of renewable energy capacity as well. In some parts of the area, the wind blows as much as it does in many other places where turbines churn out power for grids, suppling thousands of homes. The area also has nearly 300 sunny days a year, which could mean it is a good place to generate solar power as well. But for now, the coal-fired power plants are the backbone of our power generation and that will probably remain that way for many years. We make no pretension that this publication covers every aspect of energy or energy development that is going on in our area, but we have tried to give a snap shot of what is going on and what could go on in the future. We truly appreciate the individuals in our area that agreed to be interviewed for this special and those that contributed to it. Without their help we just couldn’t produce this one of a kind guide every year. This year our annual Carbon and Emery Energy Guide 2012 is housed in a slick cover publication with and interior in total color. It is the first time our papers have ever published a total color publication. This is due to the support we get from the energy industry in the area, that we are proud to serve. We are excited about the way this has turned out and look forward to your reaction to what we think is a wonderful special. Richard Shaw, publisher Sun Advocate/Emery County Progress Consistent, Reliable Ser vice since 1976

2012 Energy Edition Published by the Sun Advocate and Emery County Progress

Rick Shaw ............................................................. Publisher John Serfustini ..........................................Associate Editor Kevin Scannell ........................................................... Writer Jenni Fasselin ............................................................... Sales CJ McManus ................................................................ Sales Lynna Tweddell............................................................ Sales Christa Kaminski ......................................................... Sales

Sun Advocate

845 East Main, Price, Utah 435-637-0732 435-637-2716 Fax www.sunad.com

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March 2012 – Carbon/Emery Energy Guide – 5

About the cover The cover of this publication was painted by Thomas Williams of Helper. Williams and his partner, David Johnsen, have been creating period paintings about the coal industry for years. This painting, however, was the first one in which he depicted modern day coal mining with a long wall system. The model for the painting was Roman Vega, a Helper resident who worked most of his life in the local coal mines. The pair presently own the Boxcar Gallery in Helper, but have been featured at shows and galleries all over the United States. Williams was born in West Virginia to a coal mining family. He eventually migrated to the mines of eastern Utah where he worked as a miner for some years, until an injury ended that career. It was during his rehabilitation that Williams and others recognized his artistic ability. Soon he was painting from what was nearest and dearest to his heart, the coal mining industry, with its storied past, its challenges and its people. Three years ago, Williams was commissioned to produce art for the new public safety building in Park City, where the mining history along with the ski and tourism industry go hand-in-hand. He produced a series of paintings that currently hang in the foyer and in other places in the building, bringing that legacy to life for all who visit. Over the years both artists’ period and industrial paintings have brought the story of the blue collar worker to a public that knows little about where the energy used in their homes and businesses comes from. Williams and Johnsen have produced a number of paintings for companies connected to the coal and power generation industry. “We hope to continue to do that, and hope that along with more work for the gas and oil industry as well,” Williams said.

Tom Williams, once a coal

miner, now uses his experience to create works of art about the industry.

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6 – Carbon/Emery Energy Guide – March 2012

Directory of Advertisers America West Services ............. 32 Bill Barrett Corp ...................... 58 Blue Tip Energy ....................... 40 Bookcliff Sales ......................... 30 Brady Mining .......................... 68 Bruno/Bodec ........................... 18 Canyon Fuel ............................ 20 Carbon County Commissioners . 22 Carbon County Econ Dev ........ 65 Carbon County Events Center . 59 Castle Country Hydraulics ...... 39 Castle Country Oil................... 60 Castle County Orthopaedics .... 36 Castleview Occupational Med .... 6 Caterpillar ............................... 16 Complete Supply ....................... 4 Covol....................................... 23 Dinosaur Tire .......................... 19 Dyno Nobel ............................. 42 East Carbon City ..................... 65 Eastern Utah Community CU . 62 ECDC....................................... 50

WP

*

Echo Industries ........................ 53 ECI .......................................... 31 Emery County Commissioners .. 29 Fairmont Supply ..................... 11 Filter Service & Testing ............. 15 Gary Meeks Financial Network 33 Golden West ............................ 25 Granite Seed ............................ 37 Guymon’s Machining ............. 26 Horizon Mine .......................... 56 Hydraulic Repairs Inc .............. 30 Industrial Electric..................... 28 Jake Mellor Financial Service ..... 3 James Banasky Insurance........ 66 JBR .......................................... 29 Johansen & Tuttle.................... 56 Jones & DeMille....................... 37 Joy Mining.........................48-49 Kaman .................................... 56 Kee Engineering ....................... 10 Kelly Group ............................. 36 Landon’s Diesel.......................... 2

*

*

Longwall Associates ................ 14 Loveless Ash .............................. 3 Mac’s Mining Repair.................. 8 MB Financial ........................... 61 Mine Systems .......................... 56 Mine West/Carroll West .......... 54 Miner’s Hospital........................ 9 Morgantown Machine............. 42 Nelco ....................................... 47 Nielson Construction............... 41 Nowcap................................... 39 Petroleum Maintenance ........... 24 Phillips Machine Service .......... 44 Pierce Oil.................................. 67 Price City ................................. 26 Renegade Pipe .......................... 23 Rhino Energy............................. 5 Rocky Mountain Power ........... 57 Rush ........................................ 66 Savage ..................................... 45 Scamp Excavation ..................... 7 SE Utah Energy Producers ....... 50

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March 2012 – Carbon/Emery Energy Guide – 7

Reclaiming the land for all By JOHN SERFUSTINI After more than six decades of mining, the Independent Coal and Coke Company shut down operations in 1963. It was 20 years before the last vestiges of the stone buildings and metal structures were gone and a baseball park took their place. Gov. Scott Matheson threw the first pitch in a Little League game there in 1984 as a way to highlight the success of what was at the time the biggest - $750,000 – abandoned mine reclamation project in the state. Now there’s an effort under way to finish the job. The Utah Division of Oil, Gas & Mining’s Abandoned Mine Reclamation Program plans to install four mini-dams this summer along Kenilworth Wash

to mitigate the potential flow of tiny coal chips from reaching the Price River. The creek that flows through the wash is ephemeral – there’s water in it only after the snow melts or a big rainstorm hits. But the program is dedicated to restoration after mine closures across the state so the job will be done. At about the same time, the AMRP hopes to be in the final stages of planning for the reclamation of the old Knight-Ideal coal load in Wellington. That’s a 17-acre site that still has remnants of an abandoned coal operation. Both of these instances are examples of a much larger national push for eliminating hazards and mitigating environmental impacts of mining. According to J. Chris Rohrer, a senior reclama(Continued on page 8)

The Cyprus Plateau mine at Wattis was booming when this photo was taken about 20 years ago. Note all the infrastructure.

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8 – Carbon/Emery Energy Guide – March 2012

Reclaiming the land for all (Continued from page 7) tion specialist with the AMRP, the federal Surface Mining Control and Reclamation Act of 1977 established the regulations and set the funding requirements for the environmental and safety protections. All mines operating in 1977 and thereafter have to pay into a trust fund to finance reclamation of abandoned mines and also have to post bonds guaranteeing their own reclamation. Utah’s program gets its operating money from this federal trust fund. The Sun Advocate has followed the course of the two most recent projects and has reported in both cases that the AMRP has worked with local governments and property owners to deter(Continued on page 8)

The Cyprus Plateau mine site as it looks today. Much of the infrastructure has been removed and covered with soil. The fines pile, the dark spot in the middle of the photos, is presently being extracted for use.

Repairing & Rebuilding all types of Mining Equipment, and new Steel Fabrication. Underground Diesel Exhaust Systems and Parts. 687-2244 HUNTINGTON, UTAH

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March 2012 – Carbon/Emery Energy Guide – 9

Reclaiming the land for all (Continued from page 7) mine the scope of activities and to design plans for land use after the reclamation. In Wellington’s case, the city decided it wanted the reclamation of the former Knight-Ideal property to become a multi-purpose community park, featuring baseball fields and an urban fishery. Although AMRP does not fund those improvements, the reclamation process will proceed with those uses in mind. Rohrer said the recent cutback in activity at the Dugout mine has added a minor complication about what to do with the coal-contaminated soil at the Wellington site. The mine had agreed to allow the disposal at its own storage site, but had to withdraw from the plan. The revised plan calls for burying

the waste coal at the current site, with three feet of clean cover soil. He will be meeting with city council to inform them of the changes in March. In Kenilworth, the project will be limited to the stream. Parts of the old mine surface facilities are now private property, explained senior reclamation engineer Anthony Gallegos. The work will not require removal of all the waste coal, but the drop structures will require some disturbance. The excavated material will be disposed of elsewhere and the disturbed area will be reseeded. The former Plateau Mine operation at Wattis and the Willow Creek load out facilities at Castle Gate have been recovered as required by the law.

Western Mine Tools is the only company west of the Mississippi River that manufacturers New Drill Steel. Since 1976, Western Mine Tools has designed and produced drill steel, and bolting accessories for all types of mining applications.

Western Mine Tools, Inc. 1384 West 1955 North Helper, UT 84526 PH: (435) 637-5711 Fax: (435) 637-5716

The site of the old Castle Gate loadout facility has been reclaimed. All structures have been removed and every rail and tie of the railroad siding (gray strip, center) are gone.


10 – Carbon/Emery Energy Guide – March 2012

SGS serves electricity, coal producers in Castle Valley

A SGS employee analyzes coal samples. SGS also provides inspection, sampling, testing and analytical services to the the mining industry.

SGS Minerals Services has served the coal mining and electrical generation industries in Castle Valley for more than 30 years. SGS, a major international inspection, testing and consulting firm, acquired Commercial Testing & Engineering Company in 1984. CT&E started in the mid-western United States in 1908 and became a leader in formulating comprehensive testing services to the power industry for nearly 100 years. CT&E played a major role in setting the analytical pace in the coalfields east of the Mississippi River, then expanded to establish service concepts for the mines and power generating stations. SGS provides inspection, sampling, testing and analytical services to the mining, generation and energy companies in Carbon and Emery counties.

The company operates the only full-service environmental laboratory in Castle Valley. The Huntington lab has maintained state NELAC certification for water and A2LA accreditation for coal analysis for many years. Castle Valley’s coal and power companies maintain markets by reducing costs and producing dependable products. SGS Minerals joins the local industries’ efforts by offering technically advanced laboratory services and support. The Carbon-Emery area is home to a hard-working labor force and a business community supplying the state, the nation and countries across the globe with quality products, explained the testing company. SGS plans to continue to provide cost-effective services to local governments and industry.

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March 2012 – Carbon/Emery Energy Guide – 11

From the ground down Intricacies of operating undergound coal mines By RICHARD SHAW It all seems so simple. Find out where the coal is. Dig a hole and get it out. Haul it up and move it to where it is needed. Burn it. When man first discovered that coal could burn, creating light and heat, getting and using it was probably almost this simple. It wasn’t easy, but it was simple. Many of those that used coal in the early days only dug out what they could get from standing outside the seam. But as technology started to require more of coals power, the drive to get at it became greater and greater. The industry moved from man pow(Continued on page 15)

Materials for mining operations being transported to the mine portal at the Skyline Mine in Eccles Canyon.

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12 – Carbon/Emery Energy Guide – March 2012

Utilities

Gas

Internal

Power

Waste

Water

External

Solid Communications

Internal

Liquid

External

Regulation State

Labor Federal

Miners

Crafts Management

Internal

DOGM

Overburden

MSHA

Marketing

Financial

Personnel


March 2012 – Carbon/Emery Energy Guide – 13

Support Services Electrical Suppliers

Equipment Sales Companies

Electronic Systems

Long Wall

Belt Lines

Vehicles & Equipment

Hydraulics

Metal Fabrication

Personnel Services Training Private

Other

Transportation

General Supplies

Rail

Continuous Miners

Trucking Loadouts

Fuel

Cleaning Rock Dust

Electrical

Legal

Mechanical

General

Mechanical Maintenance

Lubricants

Chemicals

Engineering

Consulting

Public

Vehicles

Other

Mine Equipment

Medical

Health

Safety

Other PPE

Permitting & Reclamation

Filtering

Explosives Environmental

Fire

Dust Control

Occupational Disease

Mine Rescue

Emergency Services


14 – Carbon/Emery Energy Guide – March 2012

Performance. Production. Power. Longwall Associates conveyor systems integrate proven and emerging technology to give you reliable, rugged Proven Power, and Proven Performance top producing mines trust Longwall Associates to supply their longwall conveyor systems. VISIT US AT BOOTH 2753

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March 2012 – Carbon/Emery Energy Guide – 15

From the ground down (Continued from page 11) er, to animal power, to motor power and to electrical power. It moved from picks and shovels to machine. It moved from indentured servant miners to miners with good pay and benefits. It moved from unsafe mines with high levels of gas and cave-ins always a threat, to much safer mines with safety as a primary goal, in some mines as much as production. No simplicity here. Today’s coal mining industry means a lot more to a local economy than it ever did, because of the changes to the industry. More equipment, more safety, more efficiency, means more support services are needed. That means more businesses involved, more people employed. Add to that environmental laws and deeper coal to mine. It’s now neither easy nor simple. So what does it take to first start up and then run a modern coal mine? First it takes a geological survey to

be sure there is enough coal to make sure putting a mine in is profitable. Today geologists already know where coal is, because of years of study and research. But if any one seam (or group of them) support an expensive and complicated operations becomes the big question. Potential mining operations must also do a two year study of the water table in the area before they can begin operating. The two years of data are used as a baseline so that testing can be done after operations start so that measurements can be taken to see if the mining is impacting that resource. Next comes permitting, whether on private or government land. The laws vary, but local, state and federal regulations apply to not only securing the coal, but how it can be removed. Questions need to be asked. Open pit or underground mine? If underground, long wall or continuous miner? Environnmentally, how sensitive (Continued on page 18)

The Lila Canyon mine in eastern Emery County just began commercial production of coal last year. It took nearly a decade of study, planning, engineering and permitting before it reached that point.

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16 – Carbon/Emery Energy Guide – March 2012

INTRODUCING THE BROADEST PRODUCT LINE IN THE MINING INDUSTRY— AND THE INFRASTRUCTURE AND SUPPORT NETWORK TO SERVE EVERY MINING REGION IN THE WORLD.

WHEREVER THERE’S MINING, WE’RE THERE.

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March 2012 – Carbon/Emery Energy Guide – 17

Tavaputs project development By JIM FELTON This year will see the Bill Barrett Corporation continuing to drill wells targeting natural gas in the Wasatch and Mesaverde formations from atop the West Tavaputs Plateau. Natural gas prices, however, are at a 10 year low, prompting a slowdown from last year’s activities. Drilling $2.4 million wells can get tough in a $2-$3 per million cubic feet natural gas market. Unfortunately, short to mid-term trends aren’t that favorable for a strong price environment anytime soon. Consider this. 2012 is projected to be another record year for natural gas production nationally, which is saying something given the 8 percent production increase from 2010 to 2011 was the biggest one-year hike in history. The fourth warmest winter

• • • •

in recent history and continued weakness in the economy have combined to over-supply the market. Natural gas, which was getting $10-13 for a thousand Btu just a few years ago, could go below $2 before this summer. Amazingly, in just five years the U.S. has gone from building terminals to import compressed natural gas to becoming the world’s largest natural gas producer. Of course, that’s great news for our country’s energy security. For each of the 114 million households in the country, low natural gas prices mean money in each family’s pocket, and Utah families pay the least for natural gas heat than anywhere in the country. In Carbon County, it’s a mixed blessing. More than 60 percent of all property tax revenue comes from en(Continued on page 19)

Road construction workers are toiling through the winter to get the road through Nine Mile Canyon in better shape for the summer season. Barrett Corporation has spent a lot of money to improve the road and dust conditions.

WE ARE THE PROUD MEN AND WOMEN OF THE UMWA

Job Security • Retirement Security Dignity and Fairness on the Job Fighting for Working Wages a Family Can Live On Families for over 120 years Occupational Safety and Health

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18 – Carbon/Emery Energy Guide – March 2012

SERVICE/MAINTENANCE CREW Routine, Preventative, Predictive, and EMERGENCY SERVICES What We Do: Service of our customers is our #1 priority at BODEC. Our specialty ServiceCrew is staffed to do just this. Our service technicians have the training and the tools to arrive at each job ready to get you “up and running”. We provide 24-hour electrical maintenance, repair and emergency support services to our customers on our work, and the work of our competitors, efficiently while maintaining industry standards at a minimum response time. Three (3) specialized crews dedicated to the quick response and installation and/or repair of electrical systems. Not just in an emergency, but our Service Crew can handle Day-to-Day maintenance/repair issues, or the projects that just “come-up”. - On-Site Mobile Service - Fleet of Fully Equipped Vans and Service Trucks ready for dispatch - Testing and Diagnosis Equipment

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From the ground down (Continued from page 15) is the area? What special provisions must be made for this? Reclamation bonds need to secured. Many, many more questions. Once the viability of the mine is established, and all regulations can be met, then comes financing. Financing of operations and equipment. Some companies can self finance, others can’t. Financiers need to know what their return will be. And with the initial development of the mine, it may take years before it starts producing. Think of Lila Canyon; in the planning and startup stage for years, it finally started producing in the last couple of years. Engineering needs to be done. Basic plans that were used to get financing now turn into real boots on the ground work. All this requires local, on the ground management personnel. Experienced and resourceful managers then need to start to hire employees. Human resource people need to be put in place do that to help managers comply with the law and proper hiring policies. Once the mine is a go and the plans in place, construction needs to take place. Construction of infrastructure such as roads, utilities, and buildings that will need to built or located. Then the mine portal gets started. The beginning seam may be close to the surface or deep inside a cliff or underground. With that, either contractors or employees need to be hired to get it going. Working miners means a lot of things need to be purchased. Equipment, belt lines, controls, communications equipment and vehicles. It also means safety and ventilating equipment. The list of general supplies and parts goes on and on. Electrical systems need to be installed in the mine to run equipment and provide light. Contracts need to be let on hauling coal from the site to a loadout or the customer. Rail contracts to transport it once it is loaded need to be negotiated and signed too. Contracts need to be signed with local vendors for everything from vehicle maintenance to buying cleaning supplies for the office and bath house. These are just the general steps. As with all things, the devil is in the details. Nothing is ever as simple as it looks.

• Fiber-Optic Repairs • Power Quality and Back-up Systems • Lighting Maintenance – Repairs, Replace, and/or Retro-Fits • Energy Management/ Reduction Studies • Testing – Thermo Imaging, DGA/Oil, more...

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Equipment in mines get a lot of hard use and require a lot of maintenance. These controls on a continuous miner shows the signes of the wear and tear that takes place.


March 2012 – Carbon/Emery Energy Guide – 19

Tavaputs project development (Continued from page 17) ergy companies involved in natural gas exploration and coal production. Higher prices mean more activity and more sales tax revenue and royalties paid to the county, and with several studies showing a single rig to generate, on average, about 130 good paying jobs, rig activity is worth watching. We realize there are few places in the entire country as familiar with commodity price fluctuations as the folks in Carbon County. On the other hand, we have always taken the long view to the business (Exhibit A being the five years it took to get approval to drill year-round on Tavaputs). That’s why, despite the low gas prices, we are nonetheless expanding our gas line takeaway capacity and are continuing with the road investment and funding obligations for wildlife and archeology. After all, we still believe there to

be upwards of another 1.5 trillion cubic feet of natural gas to develop from West Tavaputs, and we still believe we have some 600 potential locations yet to develop. Further, the more we drill, the more we learn. There remains potential for additional productive formations (e.g. Mancos and Niobrara) and we know there to be considerable deep gas resources (But to get at that we’ll need a vastly improved price for gas). Taking the long view makes us a healthier company, and a healthier company is a better partner in your area. It’s a partnership that’s been working pretty good these last ten years, working with the county on a number of issues. The challenges keep coming. Nine Mile Canyon Road, a state sage grouse plan, getting the facts out on fracking, and working to keep Ameri-

can dollars at home by employing American workers to develop America’s energy. Developing energy on public lands in the 21st century involves a lot of stakeholders, and BBC recognizes and appreciates the creativity and cooperation with Carbon

County’s Board of County Commssioners to help assure the benefits that come from sustained year-round enregy development in this special part of Utah continue to far outweigh the cost for years to come. We are thankful for the public’s support as well.

Workers at the Barrett compressor plant which is located at the junction of Dry Canyon and Nine Mile Canyon work on a valve earlier this winter.


20 – Carbon/Emery Energy Guide – March 2012

Canyon Fuel Company Congratulations to Sufco for winning the 2010 Sentinel of Safety Award (Given to the safest large underground mine in the United States)

Sufco was injury free in 2010 and won the Arch Coal, Inc. President’s Safety Award in 2009 and 2010. Dugout Canyon was injury free in 2011 and won the Arch Coal, Inc. President’s Safety Award in 2011. Skyline won the Arch Coal, Inc. President’s Safety Award in 2008. Congratulations Sufco, Dugout and Skyline Mines for these remarkable accomplishments. You have set the standard for Arch Coal in safety and productivity across the nation.

Canyon Fuel Company, LLC 225 North 5th Street Suite 900 Grand Junction, CO 81501

Phone 970-263-5130 Fax 970-263-5161

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