SUMMARY REPORT Office of Surface Mining Reclamation and Enforcement Oversight Report:

Coal Slurry Impoundment Breakthrough Potential (Phase III)

I.

Executive Summary

Since 1996 there have been four major occurrences (three in Virginia, and one in Martin County, Kentucky) where coal slurry from an impoundment basin broke through into nearby underground works and caused environmental harm and in some cases endangered the public. The Office of Surface Mining Reclamation and Enforcement (OSM) has conducted numerous evaluations of Regulatory Authorities review of permit applications with regard to risk of slurry impoundment breakthrough into underground mines. This Phase III report is the third oversight study in West Virginia. The two previous evaluations (Phases I and II) involved the review of seven, and three permits, respectively. Inadequately addressed breakthrough issues were noted in the Phase I and II evaluations. Phase III was conducted to determine if the noted issues were permit specific, or programmatic in nature. Phase III included 15 permits of the 132 permitted slurry and mining related freshwater impoundments in West Virginia. OSM found theWest Virginia Department of Environmental Protection (WVDEP) was effective in implementing its 2001 orders and subsequent 2003 rulemaking requiring operators to reevaluate the potential for slurry to breakthrough into underground works. As a result of these actions, five of the 15 permits in the sample were ordered closed as a result of findings that the subject impoundments did not meet the required breakthrough risk criteria. However, during the same analysis, OSM found that certain aspects of breakthrough risk had not been addressed in the previous OSM, or other agency analyses, or the WVDEPs actions taken to address the breakthrough issue. The inadequately addressed breakthrough risk aspects included: Impoundments that have been determined to have a high potential for breakthrough into underground works are allowed to convert to a slurry cell configuration without additional geotechnical investigation to demonstrate that the continuation of slurry placement will not increase the likelihood of breakthrough. New underground mines are allowed to enter the safety zones of capped impoundments without demonstrating that the previous slurry under the cap is no longer flowable.

State files do not always contain adequate information regarding the possibility that mine workings exist in minable seams in the basin area. There were numerous instances where the files lacked detail, contained inconsistencies and indicated that the State inspectors did not have an adequate understanding of the details of an impoundment plan. Previous breakthrough analyses did not appear to take into consideration the probability that below drainage mines were flooded and could not contain slurry in the event of a breakthrough without expelling potentially contaminated water.

As a result of these findings, the WVDEP has agreed to the following: In our continued effort to most conservatively ensure the safety of all dam control structures under jurisdiction of our office, WVDEP will require Operators to perform the following: Provide additional written documentation, certified by a registered professional engineer, or other qualified person, evaluating and detailing the determination of existing or proposed underground mining within the safety zones and other proximate areas for embankment and basin areas. Identify all minable coal seams in the safety zones and other proximate areas using a seam height of 24 inches or greater to define minable. However, WVDEP may classify seams of lessor height to be minable when information is available to indicate mining is likely. This evaluation must also be documented and certified by a registered professional engineer, or other qualified person. Evaluate existing or reclaimed slurry impoundments before underground workings are allowed to encroach into the defined breakthrough safety zones to eliminate potential for slurry breakthrough. Any new permit or revision to existing permits that propose underground mine workings that will encroach within the footprint of an existing or reclaimed slurry impoundment or impoundments safety zones shall require the applicant to evaluate the potential breakthrough risk as part of the subsidence control plan. In cases of facility expansions, evaluate the condition of existing or reclaimed pool areas to assure that any expansion of the refuse or slurry disposal area does not increase the risk of breakthrough. WVDEP will apply the most conservative interpretation so that the prohibition for both the basin and the embankment apply when the two zones overlap.

For existing impoundments, this information will be required at midterm review or renewal, whichever occurs first. For future impoundments or expansion of existing

facilities, this information will be incorporated and reflected in the design of the facility. Where other evidence is discovered that indicates undocumented underground mining may have occurred, the WVDEP will require the above evaluation by order.

II.

Background

Following four major slurry impoundment breakthrough occurrences since 1996, three in Virginia, and one in Martin County, Kentucky, OSM announced an initiative in February 2001 to address potential future slurry impoundment breakthroughs. In West Virginia, OSM and the WVDEP began an evaluation of the States review of permit applications with regard to breakthrough potential. Initially, seven impoundments identified by the WVDEP as those having the greatest breakthrough potential were investigated (Phase 1). The reviews of six of these permits were deemed adequate; however, the geotechnical investigation of potentially minable seams in the vicinity of one impoundment was identified as inadequate. Since this was a small sample of older permits, OSM, with WVDEP concurrence, decided to evaluate three recently permitted impoundments at which construction was not complete (Phase II). Review of new (under construction) impoundments was expected to permit visual inspection of design features aimed at breakthrough prevention, which was not possible at the previously evaluated, older impoundments. During this second review, several scenarios were noted in which the permit review failed to adequately identify or address breakthrough potential. The noted scenarios follow: Cases where thin coal barriers separated impoundments from mine workings. Cases where inadequately sealed openings connected impoundments to mine workings. Cases where mine workings were located within both basin and embankment safety zones, and requirements for both were not considered. Cases where minable seams, within impoundment safety zones, were inadequately investigated.

OSM worked with state officials and resolved the issues identified in the previous 10 reports on a case by case basis. OSM then decided to conduct a third investigation with more permits and experts from different locations in it agency to determine if these cases were permit specific or if they pointed to programmatic flaws in the review process. OSM assigned teams of engineers and geologists from five different office locations to review 15 permits in West Virginia. During the review, these teams were asking questions that may have not been emphasized in previous oversight. Therefore, OSM management diverted the team members from continued oversight and asked that they develop a technical peer reviewed paper on the

best science on issues that were not only potentially noted in West Virginia but were also known to the reviewers from their multi-state general experience. Since 2005, OSM has published 4 technical papers relating to slurry impoundments: The Flowability of Impounded Coal Refuse, 2005. Environmental Risks Associated with Coal Refuse Impoundment Reclamation, 2008. Potential of Breakthroughs of Impounded Coal Refuse Slurry into Underground Mines (E&EG journal publication), 2010. Potential of Impounded-Fine-Coal-Refuse Breakthroughs into Underground Mines: Issues and Answers, December 2011.

These papers are available on the OSM Technology Transfer Website (Appalachian Region): http://www.techtransfer.osmre.gov/ARsite/arpublications.shtm In the December 2011 technical paper, the authors, Li-Tai S. Bilbao, David E. Lane, Peter R. Michael, Michael W. Richmond, Jason R. Stoltz, Donald E. Stump, Jr., and Michael J. Superfesky, described several issues in detail, and provided recommendations toward their resolution. The paper was published in December 2011 after being peer reviewed by experts from the Mine Safety and Health Administration (MSHA), OSM, U.S. Army Corps of Engineers, state regulatory agencies, and several universities in the United States and Canada, and is provided in Appendix B. A summary of the issues discussed in the paper follows: (1) (2) (3) (4) What is a minable seam? Can we trust mine maps to give us all the mining-related information we need? How can we determine whether minable seams have been mined? What do we know about the flowability of fine refuse slurry in active, inactive, capped impoundments; and capped impoundments below multiple layers of slurry cells? (5) How can we test the impounded slurry for its flow characteristics? (6) What are the concerns, and what precautions and restrictions should we recommend when we know that the slurry in an impoundment basin is flowable? (7) If an underground mine that intersects or lies below an impoundment is below drainage, should we still be concerned about breakthrough potential? OSM believes the tradtionially accepted capping of a slurry impoundment (without subsequent overlying structures) does not immediately eliminate the risk of breakthrough of the impounded material within the structure, though it can begin the process of risk reduction.

III.

Review Procedures

As noted, one goal of the current work plan was to determine if issues identified in previous studies (Phase I and II) were specific to the permits reviewed or programmatic in nature. This task was approached by evaluating multiple permits to discover if any of the issues surfaced consistently. Fifteen permits were selected for review, based on the level of breakthrough risk (low, moderate, or high), as categorized in the WVDEP Impoundment Inventory, and the presence of mineable seams within basin or embankment safety zones. The following, high risk permits were evaluated: Browns Run, Permit U-1025-91, located in Marshall County Little Hackers Creek, Permit O-113-83, located in Barbour County New West Hollow, Permit R-752, located in Kanawha County Pond Fork, Permit P-605, located in Boone County Monclo, Permit O-51-85, located in Logan County Crooked Run, Permit R-680, located in Nicholas County Dunn Hollow, Permit S-127-82, located in Kanawha County Lotts Fork, Permit O-69-83, located in Boone County Trace Branch, Permit U-25-84, located in Wayne County Jake Gore, Permit O-5057-88, located in Boone County Rockhouse Branch, Permit O-44-84, located in Logan County Campbells Creek, Permit O-3015-93, located in Kanawha County Brushy Fork, Permit O-3010-95, located in Raleigh County Road Fork, Permit O-5019-92, located in Boone County Tinsley Branch, Permit O-5032-99, located in Logan County

Each of the impoundments was investigated and reported on separately. Copies of all reports have been provided in Appendix A. With one exception (Tinsley Branch), all of the impoundments were permitted prior to 2000. As a result, changes made in response to the Martin County Kentucky breakthrough were not in evidence in the original applications. However, in 2001, the Director of the WVDEP Division of Mining and Reclamation issued an order (Directors Order) requiring operators of slurry impoundments to evaluate their impoundments in accordance with the Bureau of Mines Information Circular 8741 (IC 8741) and to submit reports for review. The team reviewed the Operators Responses to the Directors Order (if submitted). In June of 2003, the WVDEP implemented their Coal Related Dam Safety Rules. These rules required all operators to submit an Assessment of Hazards and Consequences of Failure (AHCF) with each new application. A memorandum was issued concurrently, requiring any operator of a previously permitted impoundment to submit an AHCF with the next annual update of the Emergency Action Plan. The team reviewed the AHCF (if available) for each of the impoundments evaluated.

The team evaluated all known mine voids proximate to the impoundments in accordance with the West Virginia Coal Related Dam Safety Rules. These rules have been implemented by the State of West Virginia, and are used in permit review; however, they have not been approved by OSM. Therefore, the team also evaluated each impoundment in accordance with IC 8741 and the Department of Labor, MSHAs Procedure Instruction Letter 199-V-3 (PIL 199-V-3). These documents were referenced in OSMs oversight guidance document entitled Reviewing a States Process for Evaluating the Potential for Impoundment Breakthrough into Underground Mine Workings, issued in May 2002.

IV.

Findings

A separate investigation was conducted for each of the impoundments and a report documenting the results of each is provided in Appendix A. Review these reports for detailed descriptions of the background, evaluation methodology, and findings for each of the impoundments. A summary of notable findings and facilities at which they were noted follows: As summarized in the table attached to this report, OSM identified design or administrative concerns on 11 of the 15 permits reviewed. Details may be found in the individual reports in the appendix but OSM findings are grouped as follows: 1. State Ordered Breakthrough Review: The 2001 WVDEP order requiring operators to evaluate their impoundments for breakthrough potential was effective in identifying several permits that should be closed. In OSMs sample, five impoundments had to close because they could not meet either the State requirements in the 2001 order or the 2003 regulatory requirements for an Assessment of Hazards and Consequences of Failure. 2. Slurry Cells on Top and Mining Underneath Closed Impoundments: Even though an impoundment has been closed due to the fact that it is considered to have a high potential to breakthrough into underground works, WVDEP allows the operator to convert the impoundment to a slurry cell configuration. No information was available on the condition of the slurry in the original impoundment and it could still be flowable. Without some testing of the material underneath the cells, OSM is concerned the increased hydrostatic pressure within the impoundment resulting from the additional weight of the slurry cells and dikes will increase the likelihood of a breakthrough. In one case, not only were slurry cells added to the top but new mining occurred underneath an impoundment. 3. Continued Use of a Closed Impoundment: In one case, an operator continued to place slurry in an impoundment that was ordered closed because of breakthrough potential. The operators attempts to convert the facility were unsuccessful but in the meantime 10 years have elapsed with occasional use without clear followup on the States order to close the facility.

4. Minable Seams without Evidence of Investigation Beyond maps: In 10 cases in the sample, OSM found that there were minable seams within the safety zone of the impoundment that were not adequately investigated during the permitting process. OSM finds reliance on underground mine maps (or lack thereof) alone is not sufficient evidence that mining has not occurred in minable seams identified by borings in the basin safety zone. 5. Existing Evidence of Nearby Mining not Fully Investigated: In addition to its general concern that there appears to be an over reliance on mine maps, OSM found four cases, where it noted that there are indicators of mining in some areas where the permit did not discuss the minable seam. These indicators included West Virginia Geological Survey Maps, documents from the operators consultant and an iron discharge on site. 6. Consideration of Revised Information: In one case, the operators consultant revised information related to known minable seams in the area. The revised information in this case resulted in elevating of the risk of breakthrough from low to moderate but OSM could find no evidence that any new mitigating measures were required in the permit. On July 7, 2005, OSM sent a separate letter on Campbells Creek to notify the State of this new finding but is unaware of any changes that were made to the operation subsequently. 7. Design Verification: In one case, OSM found design features related to breakthrough potential lacked scale and other features necessary to verify the proposal would be effective. In this case, the WVDEP had not yet made a decision on the revisions and agreed with OSM in requesting corrections. In at least seven of the other case(s), OSM reviewed the information after approval and found it lacking detail or containing inconsistencies. In another case, the slurry cells overly known shallow underground works and are in fact, not slurry cells, but a large impoundment subsequently divided by dikes formed of coarse refuse and surface mine spoil pushed into the impoundment. 8. Administrative Issues: In 6 cases, there were indicators that more care should be given to file maintenance and ensuring the State inspector knows the permit requirements. Three files were missing the AHCF. In two cases it was readily obvious that the inspector did not know the impoundment was not in compliance with its design requirements. Also, based on discussions, there may be disagreements between OSM and the WVDEP on how to apply regulatory requirements and failure evaluations when an underground mine is in the safety zone of both the impoundment and the basin.

V.

Study Conclusions

WVDEPs 2001 order to demonstrate breakthrough has been adequately considered and its 2003 Assessment of Hazards and Consequences of Failure has resulted in the

identification of impoundments with a high potential for breakthrough. However, OSM found that many of closure plans for these high hazard sites do not demonstrate that the risk has been eliminated. OSM notes the following weaknesses in WVDEP administration of its program to reduce breakthrough potential: Impoundments that are already determined to have a potential to breakthrough into nearby underground works are allowed to convert to a slurry cell configuration without verification that the original impoundment has solidified to the point breakthrough is not probable. Without some testing of the material underneath the cells, OSM is concerned the increased hydrostatic pressure within the impoundment resulting from the additional weight of the slurry cells and dikes will increase the likelihood of a breakthrough. Once an impoundment has been capped, the State no longer considers it an impounding structure and takes no special precautions in allowing new underground mining in close proximity to the basin. Without some testing of the flowability of material under the cap, OSM is concerned that the material may still be capable of a breakthrough into the new underground works. State files do not always contain adequate information on minable seams in the basin area. State reviewers do not always address new information that might impact on the hazard classification or breakthrough potential. Design information on remedial measures to minimize breakthrough potential sometimes lack detail or contain inconsistencies. It is not clear to the reviewers if this is because the WVDEP reviewers did not have time to study the submissions or if there is sometimes the belief that reviewers should not question a registered Professional Engineers stamped and signed product. WVDEP inspectors are not always knowledgeable of the details of the closure plans which have contributed to compliance problems that could have significant consequences. WVDEP files are sometimes incomplete, often blamed on the Logan flood with no attempt to recover or otherwise create new records which appear critical in ensuring the facility is meeting specifications. WVDEP engineers indicated that, in cases where mine voids were within embankment and basin safety zones, as defined in the West Virginia Coal Related Dam Safety Rules (CRDSR), the rules governing embankment safety zones were to apply. OSM is of the opinion that, in such cases, requirements pertinent to both types of safety zones must be satisfied.

VI.

WVDEP Corrective Actions

In our continued effort to most conservatively ensure the safety of all dam control structures under jurisdiction of our office, WVDEP will require Operators to perform the following: Provide additional written documentation, certified by a registered professional engineer, or other qualified person, evaluating and detailing the determination of existing or proposed underground mining within the safety zones and other proximate areas for embankment and basin areas. Identify all minable coal seams in the safety zones and other proximate areas using a seam height of 24 inches or greater to define minable. However, WVDEP may classify seams of lessor height to be minable when information is available to indicate mining is likely. This evaluation must also be documented and certified by a registered professional engineer, or other qualified person. Evaluate existing or reclaimed slurry impoundments before underground workings are allowed to encroach into the defined breakthrough safety zones to eliminate potential for slurry breakthrough. Any new permit or revision to existing permits that propose underground mine workings that will encroach within the footprint of an existing or reclaimed slurry impoundment or impoundments safety zones shall require the applicant to evaluate the potential breakthrough risk as part of the subsidence control plan. In cases of facility expansions, evaluate the condition of existing or reclaimed pool areas to assure that any expansion of the refuse or slurry disposal area does not increase the risk of breakthrough. WVDEP will apply the most conservative interpretation so that the prohibition for both the basin and the embankment apply when the two zones overlap.

For existing impoundments, this information will be required at midterm review or renewal, whichever occurs first. For future impoundments or expansion of existing facilities, this information will be incorporated and reflected in the design of the facility. Where other evidence is discovered that indicates undocumented underground mining may have occurred, the WVDEP will require the above evaluation by order.