Utah Division of Oil, Gas and Mining (2022)

Status of Lila Canyon Extension – Horse Canyon Mine

Initial Application Submitted on December 21, 1998 – Lila Canyon Extension

Utah AmericanEnergy, Inc. acquired the Horse Canyon Mine permit on December 21, 1998. The application for the permit extension to the Horse Canyon Mine was received on September 8, 1998. This application was determined incomplete on November 6, 1998 and returned to the applicant. The applicant resubmitted this application on December 21, 1998. This application was determined administratively complete on February 26, 1999.

A concern letter about loss of surface water was received on March 30, 1999 from Josiah K. Eardley in response to the publication notice. The Division responded in a letter to Mr. Eardley on April 7, 1999 with more information and notified him that he could request an informal conference if need be. No conference was requested.

The technical adequacy of this application involved six rounds of deficiencies from May 27, 1999 to March 9, 2001. Responses were received through May 24, 2001. All findings were made and the revised permit was issued on July 27, 2001. The Mining Plan Approval was signed by the Secretary on November 5, 2001.

Objection to Initial Permit/Board Hearing/Board Order

Southern Utah Wilderness Alliance (SUWA) filed an objection to the permit on September 4, 2001 with the Board of Oil Gas, and Mining. Determination of the type of hearing and the administrative record was heard during the September 26, 2001 Board hearing and October Board Hearing. It was ordered by the Board that this was an appellate hearing. The merits of the case were heard on December 4, 2001. The Board issued its Order on December 14, 2001 that reversed the Division’s decision to issue the permit of July 27, 2001 and the permit was denied.

UEI Submitted Application on February 11, 2002

The Division responded to the Board’s remand Order and submitted to the Board on January 10, 2002 a request for rehearing and a response to the Board Order. At the January 23, 2002 Board Hearing, the Board ordered the Division to “continue processing the permit”. UEI submitted an application on February 11, 2002 with supplemental information on February 19, 2002. The Division determined the new permit application administratively complete on February 25, 2002. Technical deficiencies were sent on March 26, 2002, with a response due on April 30, 2002. The public comment period ended April 22, 2002.

Informal Hearing – Held on May 21, 2002

SUWA requested an informal hearing on March 22, 2002, but withdrew. SUWA resubmitted a request for an informal hearing at the end of the public comment period, April 22, 2002. An informal hearing was held on May 21, 2002. The Order from the Hearing stated that the Division would consider the materials submitted at the informal conference during the normal course of its ongoing review of the new permit and that the Division would issue a decision to grant or deny the permit application in whole or part and provide its reason for the decision by July 22, 2002. The Division met informally with UEI on June 17, 2002 to discuss its ongoing review of the new permit application.

The Division sent the decision that the application was denied in part on July 22, 2002. UEI filed a motion with the Board, and SUWA subsequently filed the same motion, to maintain their right to appeal the Division’s decision, when appropriate. The Board decided at the September 2002 Board hearing to maintain both appeal rights for SUWA and UEI when the Division makes a final decision on the permit extension application (Lila Canyon) to the Horse Canyon Mine.

UEI Continues Permitting Process

UEI submitted a response to the deficiencies on December 6, 2002. The Division’s technical review was sent on April 9, 2003 with deficiencies. The applicant was advised to address all of the deficiencies completely and adequately in the next response.

The response was received on February 26, 2004 and was reaffirmed to be administratively complete on March 26, 2004. The application was published and the publication ended on May 27, 2004. SUWA requested an informal conference, which was held on July 7, 2004. The Order from this informal conference was issued on July 30, 2004.

The technical review was sent on November 30, 2004 and did not incorporate the comments from the informal conference but did encourage the application to address issues identified during the informal conference.

UEI submitted a response to the November 30, 2004 deficiencies on February 28, 2005. On March 30, 2005 UEI submitted a response to comments from SUWA concerning the Lila Canyon Mine.

The Division sent their next technical review on May 23, 2005 and UEI responded on June 15, 2005. Another deficiency review was sent to UEI on August 19, 2005. The Division and UEI met on August 23, 24, and 25, 2005 to resolve outstanding deficiency issues.

Informal Hearing Continued – November 8, 2005

Due to the order from the July 2004 Informal Conference, the Division sent the Technical Analysis to UEI, Emery County and SUWA on September 21, 2005. SUWA requested a continuation of the informal conference and this conference was held on November 8, 2005. This conference officially closed on November 18, 2005.

UEI Continues Permitting

A meeting was held with SUWA on December 8, 2005 and with UEI on December 20, 2005. UEI submitted more information on December 9, 2005 and January 3, January 9, January 20, January 30, February 3, and February 14, 2006. The Division sent an additional clarification letter to UEI on November 27, 2006. UEI responded on December 1, 2006. A response was sent to the applicant on January 19, 2007 “requiring modification of” (with three lists – List 1 being items that must be addressed prior to permit issuance, List 2 would be conditions of the permit and List 3 would need to be adequately addressed prior to permit issuance).

UEI responded to the January 19, 2007 “requiring modification of” letter. UEI was notified during a meeting with UEI and staff from the Governor’s Public Land Policy Coordination Office on January 31, 2007 about the deficiencies still outstanding.

UEI submitted a response to the deficiencies on January 22, 2007. UEI petitioned the Board on March 12, 2007 for a review of the Division’s January 19, 2007 Decision. This petition was scheduled to be heard at the Board Hearing on April 25, 2007.

Prior to the Board Hearing, the Division notified UEI that the application could be approved. UEI subsequently withdrew its petition to the Board at the April Board Hearing.

There were also a number of “ownership and control” issues that UEI was notified by e-mail during the period of January 22 through February 9, 2007 (identified in List 3, that would need to be updated prior to permit issuance. UEI responded on March 5, 2007 to the ownership and control deficiencies. The Division notified UEI via e-mail of more deficiencies with the March 5, 2007 submittal during the latter part of March 2007.

Subsequently, UEI submitted updated ownership and control and violation information on May 4, 2007 and May 16, 2007 as well as requisite documents for the bond.

Resource Recovery and Protection Plan

The decision to suspend the Lila Canyon federal leases was made on November 14, 2002, effective September 1, 2001. The suspension decision was amended on March 2, 2007 to clarify that the suspension of operations would not continue until “fifteen days after the final court decision concerning a SUWA appeal” but no court case is pending. The March 2, 2007 letter clarified that “the duration of the suspension is amended to terminate effective fifteen days after notification by the authorized officer following completion of all State permit and Federal actions, including resolution of potential administrative and judicial appeals.”

On January 19, 2006, the Division notified UEI that the approved R2P2 for the Lila Canyon extension (approved by BLM in March 2000) included mining in an area that was removed from the permit area sometime in 2002. This situation was rectified by UEI and the permit area remained the same and the R2P2 was modified on February 17, 2006 to address mining plans for the southwest corner of the mine property located on Federal coal lease SL-066490.

Section 106 Process

The Environmental Assessment for this project done by the BLM (Record of Decision on October 26, 2001) did not include consultation with Native Americans. On January 4, 2006, OSM delegated the Section 106 process to the Division. On January 13, 2006, 36 (thirty-six) letters of request for information and consultation were sent by the Division to Native American tribes, local governments, SUWA (as a consulting party) and UEI.

SUWA sent a concern letter about consultation which was received on February 14, 2006. Clarification letters were sent to all consulting parties on March 13, 2006 as supplemental information about the area of potential effect for the project. SUWA and the Hopi tribes sent concern letters on March 27, 2006.

OSM and the Division and UEI met on May 9, 2006 about more cultural resource work. UEI submitted a proposal on May 16, 2006 and on their own volition (prior to receiving any consulting party comments) chose to have the archeological consultants start on May 22, 2006. Comments were received from SUWA and the Hopi tribe and SHPO and OSM on the May 16, 2006 proposal and these comments on more cultural survey work were forwarded to UEI. UEI sent the results of the original proposed survey work to the Division on June 21, 2006.

The Division required UEI to do a supplemental survey, which was completed in September 2006. The Programmatic Agreement (PA) and Memorandum of Agreement (MOA) were in their final draft form in early February 2007. The SHPO letter accompanied by the draft PA and MOA were sent to consulting parties (Emery County and SUWA) and the Native American Tribes on February 7, 2007 for an approximate 30-day comment period. The SHPO letter (and draft PA and MOA) were sent to the Advisory Council of Historic Properties (ACHP) on February 5, 2007 for a 60-day comment period.

The ACHP responded on March 5, 2007 with “no comments and would not participate at this time, but may reconsider if another party requests participation.” SUWA sent their comments to the Division on the draft PA on March 8, 2007.

The Division finalized the consultation of the PA with BLM, OSM, SHPO, and the Public Lands Policy Coordination Office (PLPCO) during April 2007. The PA was signed by OSM, SHPO and DOGM on April 30, 2007. The BLM sent a letter to the Division on April 27, 2007 explaining why they would not sign the PA.

As of May 1, 2007, the MOA is being prepared by the BLM. BLM is the surface managing agency for the site and the MOA will be between the operator, BLM and SHPO. The signed MOA was signed on July 16, 2007.

Consultation with the United States Fish and Wildlife Service (FWS) (Section 7)

The FWS first provided information and recommendations in February 1998 and April 1999 during the consultation efforts for the Administrative Completeness review. Subsequently, the FWS stated by letter dated April 28, 2000 that no species-specific protective measures are considered necessary for the project. The letter also stated that the Division should report all water depletions to the FWS.

The Division reinitiated Section 7 on July 16, 2001 to consult on the possibility of Mexican spotted owl (MSO) and habitat within the permit area. The FWS recommended by letter dated July 18, 2001 the MSO evaluation and protection measures for the Division to implement. On February 3, 2006, the Division implemented evaluation and protection measures and issued a “may affect”, but “is not likely to adversely affect” determination for the MSO. The FWS’s letter of February 28, 2006 provided concurrence because DOGM committed to the measures.

Since that time, formal Section 7 consultation, concerning Colorado River endangered fishes, was undertaken by OSM with the Fish and Wildlife Service. The FWS letter dated January 11, 2006 outlined the Recovery Implementation (Recovery Program) Program for Endangered Fish Species in the Upper Colorado River Basin. The FWS provided conclusions that water depletion associated with this project was authorized under the March 1995 biological opinion because the proposed annual depletion is less than 100 acre feet.

The FWS further stated in the January 11, 2006 letter, that OSM should condition their permit for the Permittee to provide OSM (through the Division) actual annual water depletion values from this project. The Division will submit the values to FWS at the end of each fiscal year. The FWS also recommended OSM condition the permit to retain jurisdiction to reinitiate Section 7 and develop new protection alternatives in the event that the Recovery Program is unable to implement recovery plans for the fishes in a timely manner.

On January 22, 2007, the FWS letter to the Division conveyed their position regarding impacts, specifically to golden eagles for the Lila Canyon extension project. The Division has added conditions to the permit that outlines the process to be followed by UEI for protection of raptors.


The Decision Record for the Environmental Assessment for Lila Canyon was signed on October 27, 2000. This decision was appealed by SUWA. The Interior Board of Land Appeals affirmed the BLM position on September 22, 2004.

It was verified on an interagency call with BLM and OSM and the Division on January 6, 2006 that the EA prepared by BLM for this project analyzed the entire project area. Patrick Gubbins, the BLM Field Office Manager, stated that the project area for the EA was “5500 acres”.

The EA, however, did not do tribal consultation as part of the Section 106 process. OSM delegated the Section 106 process to the Division on January 4, 2006.

Description of the Proposal to Mine Six Federal Coal Leases

UtahAmerican Energy, Inc.(UEI) has proposed to develop new surface facilities near the mouth of Lila Canyon to mine coal in six federal coal leases. The application was submitted and reviewed as a significant revision to the existing Horse Canyon Mine Mining and Reclamation Plan (MRP). The leases are contained within the North Block Logical Mining Unit as approved by the United States Bureau of Land Management (BLM) January 1, 1994.

The decision to suspend these leases was made by the BLM on November 14, 2002 (effective September 1, 2001). The suspension decision was amended on March 2, 2007 to clarify that the suspension of operations would not continue until “fifteen days after the final court decision concerning a SUWA appeal but no court case is pending. The March 2, 2007 letter clarified that “the duration of the suspension is amended to terminate effective fifteen days after notification by the authorized officer following completion of all State permit and Federal actions, including resolution of potential administrative and judicial appeals.”

The current permit area (Horse Canyon) contains 1327.75 acres, and the Lila Canyon addition contains 4664.32 acres which would be a total of 5992.07 acres. The application contains plans for new surface facilities at the mouth of Lila Canyon Mine which would be accessed by an upgraded county road. The current disturbed area is about 74.26 acres, and 25.3 acres would be disturbed by the new surface facilities (total disturbed area of 99.56 acres).

Mining will be done in the lower Sunnyside seam using longwall methods with continuous miner development. Production is anticipated to average 1.5 million tons per year but could go as high as 4.5 million tons per year.

A portion of the Turtle Canyon Wilderness Study Area is contained in the proposed Lila Canyon extension to the Horse Canyon Mine permit area. The area of the Lila Canyon extension to the Horse Canyon Mine also includes two Wilderness Inventory Units identified by the BLM as having wilderness characteristics. The application includes comments from the BLM about their management plans, and these plans are consistent with the mine plan.

Unsuitability Petition

SUWA submitted an unsuitability petition to OSM on July 25, 2006 to designate all lands lying within the zone of subsidence of the proposed Lila Canyon Extension to the Horse Canyon Mine (“subject lands”) as unsuitable for surface coal mining operations. SUWA urged the Secretary to designate the subject lands as unsuitable for surface coal mining operations because such lands are either known to contain or likely to contain a significant number of historic and prehistoric sites.

OSM notified SUWA on August 24, 2006 that it was exercising its discretion to not process the petition because an administratively complete permit application had been filed, and the first newspaper notice has been published more than two years prior to the petition’s submittal.

On September 13, 2006, SUWA submitted a revised unsuitability petition. OSM reaffirmed its August 24, 2006 decision and did not process SUWA’s revised petition.

Recommendation for Approval

The permit application for the Lila Canyon extension was approved on May 2, 2007. The decision document and permit was issued on May 18, 2007.

Appeal to Board of Oil, Gas, and Mining

SUWA appealed the permit approval decision on June 1, 2007. It was decided by the Board after the June 27, 2007 Board hearing that a full evidentiary hearing would be held. SUWA filed a motion to Stay Mining Activities before the Board in September 2007. This Stay of Mining Activities for the Lila Canyon extension was heard before the Board of Oil, Gas, and Mining on October 24, 2007. The Board found that SUWA had not demonstrated a likelihood of prevailing on its claims and the Board Denied SUWA's Stay of Mining Activity. Additionally, the Board found that the nature and balance of threatened harms in the case of the Lila Canyon extension did not make the requested temporary relief appropriate and denied SUWA's Motion for Stay of Mining Activity on that basis as well.

The Parties (UEI, SUWA, and the Division) on December 10, 2007 signed a Joint Motion to Approve a Stipulation and to Dismiss the Request for Agency Action. On December 21, 2007, the Board dismissed with prejudice the SUWA Request for Agency Action.

Appeal in District Court

SUWA filed a notice on July 31, 2007 to sue the OSM Director and Secretary of Interior about the OSM mining plan approval decision of June 26, 2007 to not require another mining plan approval (On June 26, 2007, OSM decided that the original mining plan approval of November 2001 was still effective.) On November 15, 2007, the District Court held an evidentiary hearing on the SUWA Motion for Preliminary Injunction. Based on the arguments in the parties' written submissions, the evidence proffered at the hearing, and the closing legal argument of counsel, the court Denied the Motion for Preliminary Injunction on December 5, 2007.

Construction Activities

UEI started construction activities for the surface facilities for the Lila Canyon extension on January 4, 2008.

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