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Peabody Dragging Its Feet on Mine Cleanup, Navajos and Hopis Say

July 13, 2020, 10:00 AM

The last trainload of coal rolled out of Peabody Western Coal Co.'s Kayenta Mine on the Navajo Nation in August 2019, on its way to the mine’s only customer—Navajo Generating Station, which shut down three months thereafter.

Since then, the Peabody Energy Corp. subsidiary said it’s done monitoring and compliance work at Kayenta in northern Arizona, working towards final reclamation and cleanup. But the company has yet to meet its federal obligation to begin substantive restoration, say Navajo and Hopi residents, hundreds of whom lost their jobs when the mine and the power station closed.

The Indian tribes say there’s been no noticeable cleanup activity at the surface, no filling of pits, and no hiring of reclamation workers, even though Kayenta permanently ceased production more than 10 months ago. Under the Surface Mining Cleanup and Reclamation Act, the company is required to clean up during and after mining.

Meanwhile, the Office of Surface Mining Reclamation and Enforcement, known as OSMRE or OSM, is failing to get the company to do so, according to members of both tribes. Though the agency says the company has met its obligations so far, the tribes say it’s time for the federal government to act—especially because of groundwater shortages and contamination.

The mining reclamation agency “treats Peabody like a special customer; they let them get away with everything,” said Vernon Masayesva, a former Hopi Tribal Council chairman and executive director of Black Mesa Trust, a Hopi environmental group. “We’re playing a game in their ballpark using their regulations.”

The closure last year of Navajo Generating Station and Kayenta had a devastating economic effect on the tribes, which are reeling from the coronavirus pandemic. In addition to the job cuts, the loss of mining royalties and revenues wiped out about 80% of the Hopi budget, and the financial hit to the Navajos was estimated at $30 million to $50 million.

‘Let Peabody Walk’

Masayevsa said what’s playing out at Kayenta occurred 15 years ago with another Peabody coal facility on Navajo and Hopi lands, the Black Mesa Mine, which closed in 2005 but never completely cleaned up—in part, nearby residents say, because OSMRE didn’t follow through.

“We’re afraid the same thing is going to happen again—OSM is just going to let Peabody walk,” he said.

Peabody said in an email it has restored and reclaimed about 19,000 acres at Black Mesa and Kayenta, or about 75% of the lands disturbed across both sites. Coronavirus stay-at-home orders issued by the Navajo Nation and the Hopi Tribe have complicated and delayed remediation activities at the mines, the company said, adding that it’s not safe to resume operations until there are positive trends in Covid-19 cases in the area.

Peabody is “committed to reclaiming the land as a vital part of the mining life cycle while we adjust to evolving conditions and unexpected delays related to Covid-19,” Charlene Murdock, a company spokeswoman, said.

OSMRE appears intent on processing Peabody’s application as a minor renewal, although it should handle it as a “significant mine permit revision,” given that the company ceased production last year, said Pam Eaton, consultant with Green West Energies and former deputy vice president of the Wilderness Society.

A permit revision designation is called for when there’s been a significant change at a permitted facility, she said.

“I’d say going from 5 million tons a year to zero is a significant change,” she said.

Peabody’s five-year permit for Kayenta expired July 6. It applied for the permit renewal in February.

No Significant Revision: Feds

The surface mining act’s implementing regulations don’t obligate OSMRE to designate Peabody’s permit renewal as a significant revision, Chris Holmes, spokesman for the office, said in an email. Holmes added that Peabody is current with all of its reclamation obligations.

What Peabody is doing appears to be “cleanup lite,” Eaton said. The company’s remediation timetable submitted to OSMRE in December puts off the bulk of the bigger, more expensive reclamation to 2022 or later, she said.

Peabody wants OSMRE to process its application as a routine renewal to avoid having to “go through the full-blown process,” said Mark Squillace, a professor of natural resources law at the University of Colorado in Boulder.

“By treating this as a minor renewal, they’re foreclosing the opportunity for public engagement,” Squillace said.

OSMRE in late June cited the pandemic as the reason for delaying a decision on Peabody’s permit renewal request.

Restoring Groundwater

One of the top cleanup priorities at Kayenta is the restoration of groundwater in the Navajo Aquifer, a major drinking water source for both tribes. About one-third of tribal households lack running water in a time when washing hands is critical.

From 1971 to 2005, Peabody withdrew more than 1.3 billion gallons a year from the aquifer to run a 273-mile-long coal slurry pipeline from Black Mesa Mine to the Mojave Generating Station.

Now the water table in the aquifer has fallen far below where it once was, and the water pressure is so weak it’s hard for it to reach the surface, said Nicole Horseherder, Navajo Nation member and director of a local environmental group, To Nizhoni Ani.

Seeps and springs that previously provided water for livestock and wildlife no longer do so, she said. Some deep wells in some tribal villages have high levels of arsenic because of overdrawing of water.

Peabody says the water shortages are due to community use, and coal mining has had no effect on tribal water supplies.

“It’s hard to be optimistic about anything in the coal industry,” Squillace said. “Coal is on the ropes, but you can’t just let a private industry that is on the verge of collapse decide how that collapse is going to occur.”

To contact the reporter on this story: Tripp Baltz in Denver at abaltz@bloomberglaw.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Chuck McCutcheon at cmccutcheon@bloombergenvironment.com

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