Pub. 7 2017 Issue 3

18 AT THE CENTER OF UTAH INDUSTRY Congressional Review Act, which authorizes Congress to review and invalidate regulations promulgated during the last 60 days of the prior administration. As the result of repeal of OSMRE’s rule, the prior stream protection and hydrologic protection rules remain in place and Utah retains primary regulatory authority over these provisions. On March 29, 2017, the new Secretary of Interior, Ryan Zinke, lifted the moratorium on federal coal leasing, ceased the Federal Coal Program environmental review, and reinstated the Federal Royalty Policy Committee (RPC). Secretary Zinke, critical of his predecessor’s use of a PEIS as the vehicle for policy reform, fully reinstated leasing under the Federal Coal Program and invited suggestions for regulatory reform. On April 4, 2017, ONRR proposed to rescind the final Consolidated Federal Oil & Gas and Federal Indian & Coal Valuation Rule. The final coal valuation rule was repealed by ONRR at 82 Fed. Reg. 36934 (August 7, 2017). ONRR also reinstated valuation regulations (in effect prior to January 2017) and both the repeal and reinstatement became effective on September 6, 2017. On October 4, 2017, Secretary Zinke convened the first meeting of the RPC. The RPC as re-established now includes a member appointed by Utah Governor Gary Herbert, assuring state representation in royalty policy reform. Impacts on the Utah Coal Industry The actions of the administration, particularly in lifting the coal moratorium, have significantly helped the coal industry in Utah. Removing the ban on leasing has the immediate effect of allowing the Alton Coal Tract Lease by Application (LBA) to proceed to final decision by the Bureau of Land Management (BLM). The Alton Coal Tract includes some 3,581 surface acres and an estimated 44.9 million tons of recoverable coal located on federal lands within Kane County, Utah. Pending review since 2004, the LBA was in the final stages of environmental review in January 2016 when the previous administration imposed the lease moratorium. The BLM is now moving to complete the Final Environmental Impact Statement on the Alton Coal Tract and hopes to make a final leasing decision in early 2018. A competitive lease granted to Alton Coal Development would extend the life of the Coal Hollow Mine and create additional jobs in rural Utah. Even prior to lifting the federal lease moratorium, one of Secretary Zinke’s first actions in office was to issue a competitive lease to Bowie Resources, Inc. for some 55 million tons of federal coal reserves. The Greens Hollow Federal Coal Lease, issued in early March 2017, adds a 6,175 acre tract to the Sufco Mine located in Sanpete and Sevier Counties, Utah. The competitive lease sale generated $23 million in lease bonus revenue which, along with lease and production royalty, will be split equally between the state of Utah and the federal government. The lease will extend the life of the Sufco Mine which delivers coal to power PacifiCorp’s coal-fired plants in Central Utah. Emery County has also benefited from the reopening of Emery Deep coal mine, which recommenced production on federal and private coal reserves in June 2017. Bronco Utah Operations, LLC purchased the mine, which was idled more than six years ago. Operating under a newly approved mine plan, Bronco has begun production near the town of Emery, Utah. At full production, the Bronco Utah Mine will employ some 100 workers. Coal will be delivered to both the local steam coal market and to the export market. Looking to the future, federal coal reserves in Utah, previously withdrawn by national monument designation, may once again become available for lease. By Executive Order issued on April 26, 2017, the president directed Secretary Zinke to review national monuments created since 1996. This review includes national monuments designated by both the Clinton and Obama administrations. Of particular interest to the Utah coal industry, Secretary Zinke has focused on narrowing the REGULATORY RELIEF continued from page 17