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# M e m o r a ndum

T o: M e li s s a W e i t z ; U

. S

. E n v i r on m en t a l P r o t e c t i on A gen cy

F r o m: M i c ha e l G o d e c ; A d v an c e d R e s ou r c e s I n t e r na t i on a l

, I n c

.

D a t e: 6 / 10 / 20 1 0

R e : J u s t i f i c a t i o n f o r

t he C hange s i n C o s t E s t i m a t e s f o r C o m p li an c e w i t h S ubpa r t FF

A ss o c i a t ed w i t h U nde r g r ound C oa l M i ne s

T h i s m e m o i s i n t e n ded t o c o m m un i c a t e t he r a t i o n a l e f o r t he c h ange s i n t he c o s t s

e s t i m a t e s f o r S ubp a r t F F o f t he M anda t o r y R e po r t i ng o f G r e enhou s e G a s e s R u l e f o r

U nde r g r ound C o a l M i ne s

.

I n t he p r opo s e d M anda t o r y R epo r t i ng o f G r e e nhou s e G a s e s R u l e

, c o m p l i an c e

c o s t s f o r u nde r g r ou n d c o a l m i ne s w e r e e s t i m a t ed t o b e $2

. 7 m i ll i o n na t i o n w i de i n t h e

f i r s t y ea r

, and $ 2

. 6 m i ll i on annu a l i z e d i n s ub s equen t y e a r s

, a v e r a g i n g ab o u t $23

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pe r m i ne

. EPA r e c e i v ed nu m e r ou s c o m m en t s on t he s e l e c t ed m on i t o r i ng r e q u i r e m en t s

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and i t s c o s t e s t i m a t e s . I n r e s pon s e t o t ho s e c o mm en t s

, EPA r e v i e w ed

, and l a t e r

r e v i s ed

, i t s m on i t o r i ng r e q u i r e m en t s

, c o s t an a l ys i s

, a nd e s t i m a t e s . I n t he f i na l r u l e

, t he

e s t i m a t ed c o s t s f o r und e r g r o und c o a l m i ne s i s $3

. 7 m i ll i on na t i on w i de i n t he f i r s t y e a r

,

and $2

. 6 m i l l i on a n nu a l i z ed i n s ub s eq u en t y e a r s

. E s t i m a t ed pe r m i ne c o s t s a r e $32

, 5 17

pe r a ff e c t ed m i ne i n t h e f i r s t y e a r

, a nd $ 2 2

, 7 6 5 pe r m i ne a n nu a l i z ed i n s ub s eq u en t

y ea r s

.

T he o r i g i n a l p r opo s a l r eq u i r e m en t s f o r r ep o r t i ng e m i ss i on s f r o m unde r g r o und

c oa l m i ne s a r e s u m m a r i z ed i n T a b l e 1

.J une 10

, 2010

T a b l e 1

. S u mm a r y o f O r i g i n a l P r opo s e d M o n i t o r i ng a nd R e po r t i ng R e qu i r e m e n t s f o r

U nd e r g r ound C o a l M i n es

C o m pon e n t M o n i t o r i ng R e qu i r e m e n t

V e n t il a t i o n S ys t e m s A n n ua l r e p o r t i n g o f CH 4 li b e r a t i o n f r o m v e n t il a t i o n

sys t e m s ba s e d o n q ua r t e r l y s a m p li n g

D eg a s i f i c a t i on S ys t e m s A n n ua l r e p o r t i n g o f CH 4 li b e r a t i o n d e ga s i f i c a t i o n s ys t e m s

a t c oa l m i n e s

– u s i n g c o n t i nu ou s w e ll bo r e m o n i t o r s

D e s t r u c t i on D e v i c e s A n n ua l r e p o r t i n g o f CH 4 d e s t r o y e d i n d e s t r u c t i o n d e v i c e s

– u s i ng c o n t i n u o u s w e ll bo r e m o n i t o r s

I n r e s p o n s e t o t he o r i g i n a l p r opo s ed r u l e

, a n u m be r o f c o m m en t e r s f e l t t h a t EPA

d i d no t a p p r o p r i a t e l y t a k e i n t o c o n s i de r a t i on t h e f u l l c o s t s o f c o m p li an c e a ss o c i a t e d w i t h

t he p r o po s ed r u l e

, p a r t i c u l a r l y t ho s e a ss o c i a t e d w i t h t he i n s t a ll a t i on o f C E M S on a l l

dega s i f i c a t i on w e l l s and g o b ga s v en t h o l e s

. T he y no t ed t h a t bo t h t he n u m be r o f

i m pa c t ed w e ll s a nd v en t h o l e s

, a s w e l l a s t h e c o s t s a ss o c i a t e d w i t h i m p l e m en t i ng s u c h

sys t e m s

, w e r e p r oba b l y u n de r e s t i m a t ed

.

B a s ed on t he s e c o m m en t s

, w e r ee v a l ua t ed o u r c o s t a ss e ss m en t, and c a m e t o

t he c on c l u s i o n t ha t t he c o s t s w e r e u n de r e s t i m a t ed . I n pa r t i c u l a r

, w e c on s i de r e d ne w

i n f o r m a t i on t o p r o v i de a ba s i s f o r e s t i m a t i ng t h e nu m be r o f dega s i f i c a t i o n w e l l s

, go b ga s

v en t h o l e s

, and o t he r m e t hane d r a i nage w e l l s t ha t w ou l d l i k e l y b e a ss o c i a t ed w i t h

unde r g r oun d c o a l m i ne s r e qu i r ed t o r e po r t u n de r t he r u l e

. T h i s r e s u l t ed i n a

s ub s t an t i a l l y l a r ge r e s t i m a t e o f t he nu m be r o f dega s i f i c a t i on w e l l s t ha t w ou l d be

r eq u i r e d t o i n s t a l l C E M S sys t e m s i n c o m p li a n c e w i t h t he o r i g i n a l l y p r opo s e d

r eq u i r e m en t s

, w i t h an a s s o c i a t ed g r ea t e r i n c r e m en t a l c o s t bu r den

.

T he c u rr en t r e q u i r e m en t s f o r r e p o r t i n g e m i ss i on s f r o m unde r g r ound c oa l m i ne s

a r e s u m m a r i z ed i n T a b l e 2

.J une 10

, 2010

T a b l e 2

. S u mm a r y o f C u rr e n t M on i t o r i ng a nd R e po r t i ng R e qu i r e m e n t s f o r U nd e r g r ound

C o a l M i n es

C o m pon e n t M o n i t o r i ng R e qu i r e m e n t

V e n t il a t i o n S ys t e m s A n n ua l r e p o r t i n g o f q u a r t e r l y CH 4 li b e r a t i o n f r o m

v en t i l a t i o n sys t e m s u s i n g e i t he r q ua r t e r l y o r m o r e f r e q u e n t

s a m p li n g o f CH 4 c o n t en t a n d g a s f l o w

, o r c o n t i n u o u s

e m i ss i on s m on i t o r i n g sys t e m s ( C E M S )

.

D eg a s i f i c a t i on S ys t e m s A n n ua l r e p o r t i n g o f q u a r t e r l y CH 4 li b e r a t i o n d e ga s i f i c a t i o n

sys t e m s a t c oa l m i ne s

– u s i n g e i t h e r w e e k l y s a m p li ng

, o r

C E M S

.

D e s t r u c t i on D e v i c e s A n n ua l r e p o r t i n g o f q u a r t e r l y CH 4 d e s t r o y e d i n d e s t r u c t i o n

de v i c e s

– u s i ng c o n t i n u o u s w e l l bo r e m on i t o r s

.

I n EPA ’ s o r i g i n a l p r opo s a l

, i t w a s e s t i m a t ed t h a t t he r e w e r e 40 l ong w a l l m i ne s i n

t he U

. S . t ha t d o no t m on i t o r r e m o t e gob ga s v en t w e ll s / h o l e s t ha t a r e b e i n g u s ed t o

dega s i f y l ong w a l l m i ne s p r i o r t o m i n i n g

. T h e s e l o ng w a l l m i ne s w ou l d b e r eq u i r ed t o

m on i t o r dega s i f i e d ga s v o l u m e s b y i n s t a l l i ng c on t i nuou s m on i t o r i ng e q u i p m en t on t he s e

r e m o t e gob ga s v en t h o l e s

. F o r p u r po s e s o f d e v e l op i ng c o s t s

, 5 g o b w e l l s w e r e

a ss u m ed pe r l o n g w a l l pan e l

. T h i s r e s u l t ed i n an e s t i m a t ed 200 gob g a s v en t h o l e s

w he r e t he dega s s ed CH 4 w a s v en t ed

.

I n ad d i t i on

, t he n u m be r o f m i ne s w i t h m i ne d e ga s i f i c a t i on sys t e m s w a s a l s o

de t e r m i ned ba s ed on da t a c o l l e c t ed b y M S H A and EPA

. B a s ed on t h i s d a t a

, i t w a s

e s t i m a t ed t ha t i n 2 006 , t w en t y U

. S

. c o a l m i n e s s up p l e m en t ed t h e i r v e n t il a t i on sys t e m s

w i t h a c t i v e de g a s i f i c a t i on sys t e m s w he r e t he ga s w a s e i t h e r s o l d o r u s e d on s i t e

.

H o w e v e r

, i t w a s a ss u m ed t ha t a l l o f t he s e de g a s i f i c a t i o n sys t e m s had C E M S a l r ead y i n

p l a c e

, and w o u l d t h e r e f o r e i n c u r no i n c r e m en t a l c o s t s a s p a r t o f t h i s r u l e m a k i ng

.

S pe c i f i c a l l y , f o r c o s t e s t i m a t i on pu r po s e s , t h e r e v i s ed e s t i m a t e o f t he n u m be r o f

t he s e de g a s i f i c a t i on w e l l s i n t he U

. S

. w a s de v e l o p ed ba s ed on t he f o l l o w i n g :

• A s pa r t o f d e v e l o p i ng t he EPA g r een h ou s e ga s e m i ss i on s i n v e n t o ry 1 f o r t h e c o a l

m i n i ng s e c t o r , f o r s o m e m i ne s

, w e l l

- b y

- w e l l da t a a r e c o m p i l ed

. T h i s i n c l u de s

1 E n v i r on m e n t al Pr o t e c t i on A gen cy

, I n v en t o ry o f U

. S

. G r

eenhou s e

G a s Em i

ss ion s and S in ks : 1990

- 2006

, U SEPA #430

- R

- 08

- 005

, A p r i l 2008 ( h tt p : / / ww w

. epa

. g o v / c l i m a t e c hange / e m i ss i on s / u s i n v en t o r

yr epo r t. h t ml )J une 10

, 2010

m o s t o f t he m i ne s i n A l aba m a

, and a f e w e l s e w he r e

. W h e r e a v a i l a b l e

, w e l l

c oun t s ba s e d on t he s e d a t a w e r e u s ed

.

• F o r m i ne s w he r e w e l l c ou n t i n f o r m a t i on w a s a v a i l a b l e , t he s e c oun t s w e r e u s e d

,

i n c o m b i na t i o n w i t h e s t i m a t ed ga s v o l u m e s r e c o v e r ed f r o m t he dega s i f i c a t i on

sys t e m s a ss o c i a t ed w i t h t h e s e w e l l s , t o de v e l op e s t i m a t ed a v e r age s t a t e

- s p e c i f i c

annu a l p r odu c t i o n r a t e s and t y p i c a l w e l l l i v e s f o r t he s e dega s i f i c a t i on w e l l s . I n

s o m e c a s e s , t he s e da t a w e r e s up p l e m en t ed w i t h dega s i f i c a t i o n w e l l r e c o v e r y

r a t e s r epo r t ed i n t h e l i t e r a t u r e

.

• F o r s t a t e s w i t h k no w n dega s i f i c a t i on p r o j e c t s

, e s t i m a t e s a r e de v e l oped b y EPA

o f t he v o l u m e o f m e t hane r e c o v e r e d f r o m dega s i f i c a t i o n sys t e m s t ha t i s s o l d

,

u s ed on s i t e

, o r o t he r w i s e de s t r o y ed ; a s w e l l a s t ha t d r a i ned bu t no t s o l d

, u s ed

on s i t e

, o r o t h e r w i s e de s t r o y ed. 2 W h e r e e s t i m a t e s o f w e l l c ou n t s w e r e no t

a v a i l a b l e f o r a p a r t i c u l a r m i ne k n o w n t o ha v e a dega s i f i c a t i o n p r o j e c t i n p l a c e , t he

e s t i m a t ed nu m be r o f a c t i v e d e ga s i f i c a t i on w e ll s w a s e s t i m a t ed b y d i v i d i n g t he

e s t i m a t e o f m e t hane e m i ss i on s r e c o v e r ed b y t he e s t i m a t ed s t a t e

- s pe c i f i c

a v e r age p r o d u c t i on r a t e p e r d e ga s i f i c a t i on w e l l

. T he d e ga s i f i c a t i on w e l l s w e r e

a l l o c a t ed t o i n d i v i du a l m i ne s a cc o r d i ng t o t he e s t i m a t ed v o l u m e s v en t ed v e r s u s

t ha t s o l d

, u s ed on s i t e

, o r de s t r o y ed

.

• W he r e e s t i m a t e s o f dega s i f i c a t i on w e l l c ou n t s w e r e no t a v a i l a b l e f o r a pa r t i c u l a r

m i ne k no w n t o p r odu c e s o m e a m oun t o f m e t hane t ha t i s no t r e c o v e r ed b y a n

e x i s t i n g dega s i f i c a t i on p r o j e c t, a s w e ll a s a l l o t he r l ong w a l l m i ne s

, t he e s t i m a t ed

nu m be r o f a c t i v e dega s i f i c a t i on w e l l s w he r e g a s i s c u rr e n t l y v en t e d w a s

e s t i m a t ed b y a ss u m i ng t ha t 40 % o f t h e m e t hane v en t e d w a s t he r e s u l t o f

dega s i f i c a t i on

. T h i s e s t i m a t e o f t o t a l f u g i t i v e m e t hane e m i s s i on s a t t he m i ne w a s

t hen d i v i ded b y t he e s t i m a t ed a v e r age s t a t e

- s pe c i f i c p r o d u c t i on r a t e p e r

dega s i f i c a t i on w e l l

.

2 E n v i r on m e n t al Pr o t e c t i on A gen cy

, I den t i f y ing O ppo r t u ni t ie s f o r M e t hane Re c o v

e ry a t U

. S

. Coal M

ine s :

Pr o f ile s o f S ele c t ed G a ss

y Unde r g r ound Coal M

ine s : 2002

-

2006

, EPA 430 -K- 04

- 003

, S ep t e m be r 2008

( R e v i s ed J anua ry 2009 )J une 10

, 2010

B a s ed on t h i s a pp r o a c h

, i t w a s e s t i m a t ed t ha t abou t 1

, 400 d e ga s i f i c a t i on w e l l s

w e r e a ss o c i a t ed w i t h 1 5 m i ne s w i t h dega s i f i c a t i o n sys t e m s w he r e t he r e c o v e r e d

m e t hane i s s o l d

, u s e d on s i t e

, o r o t he r w i s e d e s t r o y ed

. F o r c o s t e s t i m a t i on p u r po s e s

, i t

w a s a ss u m ed t ha t t he s e w e l l s h a d an a v e r a g e 5 y ea r l i f e

, r e s u l t i ng i n a n a v e r age o f 280

ne w w e ll s t ha t a r e b r ough t on l i ne ea c h y e a r ( a s a c o m pa r ab l e nu m be r a r e r e t i r e d )

.

S i m il a r l y

, i t w a s e s t i m a t ed t ha t 500 dega s i f i c a t i on w e l l s w e r e v e n t i ng m e t hane t o

t he a t m o s phe r e f r o m 21 m i ne s

. F o r c o s t e s t i m a t i on pu r po s e s

, i t w a s a ss u m ed t ha t

t he s e w e l l s ha d an a v e r age 3 y e a r l i f e

, r e s u l t i ng i n an a v e r a g e o f 1 6 7 ne w w e ll s t h a t a r e

b r ough t on l i ne ea c h y e a r ( a s a c o m pa r ab l e n u m be r a r e r e t i r e d )

.

S e c ond

, w e r ea ss e ss ed t he c o s t s a ss o c i a t ed w i t h i n s t a l l i n g and ope r a t i ng C E M S

on dega s i f i c a t i on w e l l s w he r e C E M S w e r e no t a l r ead y p r e s e n t. B a s ed o n c o m m en t s

ob t a i ned t h r o u gh i n t e r v i e w s w i t h i n d i v i d u a l s f a m ili a r w i t h e x i s t i n g dega s i f i c a t i on

sys t e ms 3

, i t w a s c on c l uded t ha t, i n m an y c a s e s

, i t w o u l d be d i f f i c u l t an d v e r y c o s t l y t o

i n s t a l l C E M S on s o m e gob ga s v en t h o l e s be c au s e o f t he i r r e m o t e l o c a t i on

,

una v a i l a b il i t y o f p o w e r

, i n a cc e s s i b il i t y

, s u sc ep t i b il i t y t o v and a l i s m

, and t he r e l a t i v e l y

s ho r t l on g e v i t y o f m an y o f t he s e g ob ga s v en t ho l e s

.

W e a l s o r ea ss e s s ed a n d upd a t ed t h e e s t i m a t ed nu m be r o f l abo r hou r s t ha t m a y

be r eq u i r ed t o c o m p l y w i t h s o m e o f t he e l e m e n t s o f t he p r o p o s ed r u l e

, ba s ed on t he

c hange s p r opo s e d f o r

t he f i n a l r u l e

. S pe c i f i c a ll y , t he s e c h a nge s a r e :

• A n op t i on o f u s i ng on e o r m o r e C E M S t o ob t a i n da t a o n m i ne v en t i l a t i on sys t e m s

i s a d ded

.

• F o r CH 4 l i b e r a t ed f r o m dega s i f i c a t i on sys t e m s , t he r e q u i r e m en t t o m on i t o r ea c h

w e ll w a s r e m o v ed

. N o w C E M S m a y be u s ed t o m on i t o r ag g r ega t e CH 4 f r o m

m o r e t han one w e l l

, a s l o n g a s CH 4 f r o m a l l w e l l s i s m on i t o r ed

, a n d t he

m e t hodo l og y f o r e s t i m a t i ng t o t a l e m i ss i on s f r o m a l l w e ll s i s do c u m en t ed

.

3 I n t e r v ie w s w e r e c ondu c t ed w i t h S

. J

. Sc h a t z el

, P i t t s bu r gh Re s ea rc h Labo r a t o ry

, Na t i ona l I n s t i t u t e f o r

O cc upa t i ona l S a f e t y and Hea l t h ( N I O S H ) ( A p r i l 2 5

, 2008 ) ; J e ff Sc h w oebe l

, D i r e c t o r

, R E I D r i l l i ng

( De c e m be r 17

, 2009

, and M i c hael Co t é

, Pr e s i den t and E n v i r o n m en t a l E n g i nee r

, Rub y Can y on

E ng i nee r i ng ( N o v e m be r 1 0

, 2009 )

, and J ona t han K e l a f an t, S e n i o r V i c e Pr e s i den t, A d v an c ed Re s ou rc e s

I n t e r na t i on a l ( N o v e m be r 9

, 2009 )

.J une 10

, 2010

• T he r eq u i r e m en t f o r c o n t i nuou s m on i t o r i ng f o r t o t a l CH 4 l i b e r a t i on a t

dega s i f i c a t i on sy s t e m s w a s r e m o v ed

. D ega s i f i c a t i o n w e l l s m a y be m on i t o r e d w i t h

C E M S o r t h r ough w ee k l y s a m p l i ng o f a l l de ga s i f i c a t i o n w e ll s

, i n c l u d i ng gob g a s

v en t h o l e s a nd o t h e r d e ga s i f i c a t i on w e l l s

.

F i n a l l y

, i n t h e p r o c e ss o f u p da t i ng t he c o s t e s t i m a t e s f o r t he r e v i s ed p r opo s a l

, w e

a l s o upda t e d c o s t d a t a f o r m e t hane ( CH 4 ) s a m p li ng an d m on i t o r i ng e q u i p m en t, a l o n g

w i t h o t he r c o s t s , f o r bo t h dega s i f i c a t i on an d v en t i l a t i on sys t e m s

., ba s ed on m o r e up

- t oda t e c o s t q uo t e s o b t a i ne d f r o m a v a r i e t y o f s o u r c e s o f e q u i p m en t s a l e s c a t a l og s

a cc e ss ed f r o m n u m e r ou s w eb s i t e s

.

T he de t a il s a ss o c i a t e d w i t h t he s e c han g e s i n e s t i m a t ed c o s t s c an be f o u nd i n t h e

upda t ed R e g u l a t o r y I m pa c t A ss e s s m en t C o s t A ppen d i x f o r f u g i t i v e m e t hane e m i ss i on s

f o r un d e r g r ound c o a l m i ne s ( i n do c k e t EPA

- O A R

- 2008

- 0 5 08 )

.

B a s ed on t h i s u pda t e

, t he t o t a l e s t i m a t ed an n ua l i z e d c o s t s f o r c o m p l y i ng w i t h

t he s e r e q u i r e m en t s f o r u n de r g r oun d c o a l m i ne s a r e $ 3

. 7 m i ll i on i n t he f i r s t y e a r o f

c o m p li an c e

, and n e a r l y $ 2

. 6 m i ll i on i n s ub s e q uen t y e a r s

. T he ba s i s a nd b r ea k do w n o f

t he s e c o s t s a r e s u m m a r i z ed i n T a b l e 3

.

T a b l e 3

. B as i s f o r D e t e rm i n i n g N a t i o n wi d e C o s t f o r C u r r e n t M o n i t o r i n g

O p t i o n s