llHere is the mine #3 form submitted Aug 4 .
GLTA
Wallywill
DEP Form 7032 - 1 - May 19, 2009
KPDES FORM SDAA
Kentucky Pollutant Discharge
Elimination System (KPDES)
Socioeconomic Demonstration and
Alternatives Analysis
The Antidegradation Implementation Procedure found in 401 KAR 10:030, Section 1(3)(b)3 requires KPDES permit applications
for new or expanded discharges to waters categorized as “Exceptional or High Quality Waters” to conduct a socioeconomic
demonstration and alternatives analysis to justify the necessity of lowering local water quality to accommodate important economic
or social development in the area in which the water is located. This demonstration shall include this completed form and copies of
any engineering reports, economic feasibility studies, or other supporting documentation
I. Project Information
Facility Name: American Blue Gem and Steam Coal LLC (DNR# 861-0502)
Location: Swan Pond RD County: Knox
Receiving Waters: Swan Pond
II. Socioeconomic Demonstration
1. Define the boundaries of the affected community:
(Specify the geographic region the proposed project is expected to affect. Include name all cities, towns, and
counties. This geographic region must include the proposed receiving water.)
The project is located in the Eastern coal fields of Knox County near the community of Swan Pond. Swan Pond is
located in Knox County. It is bordered on the west by Whitley County, on the north by Laurel County and Clay
County and, on the east by Bell County. The region is characterized by high, sharp crested ridges, narrow valleys
and little upland area. The HUC 8 receiving watershed is the Upper Cumberland River (HUC 05130101).
This project proposes surface disturbance of 65.75 acres, 158.08 underlying auger acres and twenty one bench
sediment control structure.
This project proposes discharge into an unnamed tributary of Swan Pond, a first order watershed which discharges
into the Cumberland River at 620.75 mile post.
*uszip.com
DEP Form 7032 - 2 - May 19, 2009
2. The effect on employment in the affected community:
(Compare current unemployment rates in the affected community to current state and national unemployment rates.
Discuss how the proposed project will positively or negatively impact those rates, including quantifying the number
of jobs created and/or continued and the quality of those jobs.)
The small community of Swan Pond in Knox County historically has an unemployment rate significantly higher than
the state and national averages. In March, 2010, the unemployment rate for Knox County was 10.9%, the rate for
Kentucky was 10.9% and the national unemployment rate was 10.2%.
This project will employ 12 people who will be local residents. The average income realized from the direct jobs
provided by this project will be approximately $50,000 year/household or over $600,000/year collectively.
Studies indicate that the mining industry creates 3 indirect related jobs for each actual direct mining position.* Based
on these indicators, over 48 jobs will be supported by this project. In 2007, 31.3%** of Knox county’s residents
were living below the poverty level. According to quick facts from the U.S. census, private, nonfarm employment
dropped by 26.6% in Knox County from 2000 to 2006.
*Source: University of Kentucky Center for Business and Economic Research: Economic Impact
Analysis of Coal in Kentucky, (1995-2004) by Haywood and Baldwin
**Source: U.S. Census Bureau, Small Area Estimate Branch
Unemployment Rates
0
1
2
3
4
5
6
7
8
9
2000 2001 2002 2003 2004 2005 2006 2007 2008
Rate (percent)
U.S.
KY
Knox County
In addition to the 12 direct jobs provided by this project, it will also provide for more employment indirectly in mining
service jobs. These jobs include equipment sales, mining engineering consultants, food service, fuel sales,
transportation, coal washing and blending. The mining industry directly contributes to Knox County’s economy
through real taxes, personal property taxes and the state severance tax. The severance tax rate for coal is 4.5% of
which 50% is slated to be returned to the county of origin. Tax revenues for coals severed and processed in Knox
County in the2006-2007 fiscal year totaled over $900,000 dollars. Severance tax dollars are used for such things
as infrastructure, education, development and recreation. This project will contribute to this tax base and help
provide funding for county improvements.
DEP Form 7032 - 3 - May 19, 2009
II. Socioeconomic Demonstration- continued
3. The effect on median household income levels in the affected community:
(Compare current median household income levels with projected median household income levels.
Discuss how proposed project will positively or negatively impact the median household income in the
affected community including the number of households expected to be impacted within the affected
community.)
The median household income in Knox County in 2007 was $24,881 which is less than half of the median
income of the United States and only 60% of the state’s statistics.
$24,881
$40,299
$50,233
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Knox County Kentucky U.S.
Median Household Income, 2007
The estimated annual income of the direct jobs provided by this project is $50,000/year. While this project
may not raise the median income of the county, mining jobs historically pay the highest wages in the Knox
County.
Knox County Wages by Industry 2007
0
100
200
300
400
500
600
700
800
900
1000
Industries Weekly Wages $$
Mining
Construction
Mfg
Utilities, Trade, Transp.
Information
Finance, Ins., Real Est
Services
State & Local Gov.
Other
*Average Weekly Wages by Industry Division Covered by Unemployment Insurance:2007, www.bls.gov
DEP Form 7032 - 4 - May 19, 2009
4. The effect on tax revenues of the affected community:
(Compare current tax revenues of the affected community with the projected increase in tax revenues
generated by the proposed project. Discuss the positive and negative social and economic impacts on the
affected community by the projected increase.)
This project is expected to increase local, state and federal revenues from the extraction, processing, and
sales of the recovered resource.
Production from this area is expected to exceed 240,000 tons over the life of the project. Estimates for a
fraction of the tax revenue based on $64/ton* selling price include:
Federal excise tax $1.10/ton $264,000
Reclamation Tax
.35/ton $84,000
Ky Severance Tax 4.5% of sales price $691,200
Recovered reserves as well as reserves in situ are subject to taxation. Monies paid to employees are
subject to state, federal and local taxes. Tangible equipment and properties are also taxed. Providing 12
direct jobs and an additional 36 support jobs, monies received in salaries will also support the local
economy by boosting sales in the area.
During the operation, such things as dust, noise and increased traffic have the potential to temporarily
decrease the value of a surrounding property. However, the decreased values should be minimal and
limited to the life of the permit. The overall value of the mining property will decrease after all of the coal
has been removed however there should be no decrease in the value of the surface land within the
bonded mine site.
*EIA, May, 2010 Sport Market Prices
DEP Form 7032 - 5 - May 19, 2009
II. Socioeconomic Demonstration- continued
5. The effect on an existing environmental or public health in affected community:
(Discuss how the proposed project will have a positive or negative impact on an existing environmental or public
health.)
Before the recovery of resources, this area will be cleared and grubbed. Drainage will be directed to flow in ditches
to the sediment control structure to prevent solids from entering the receiving stream. After removal of the coal
reserves, this area will be graded and seed to provide controlled drainage from the area.
6. Discuss any other economic or social benefit to the affected community:
(Discuss any positive or negative impact on the economy of the affected community including direct and or indirect
benefits that could occur as a result of the project. Discuss any positive or negative impact on the social benefits to
the community including direct and indirect benefits that could occur as a result of the project.)
Economically this project will also benefit retailers, service industry personnel, food establishments and
entertainment industries in the community. Severance tax dollars fund basic needs such as water and sewer
projects but also fund recreational, social and cultural developments as well.
The average weekly earnings for a mining employee in Knox County in 2007 were $884.38 while the county average
for all industries was $533.09.* Mining employees wages averaged more than all other Knox County workers. The
income realized from the direct jobs provided by this project will be near $50,000 year/employee or near
$600,000/year collectively. Currently Kentucky ranks 44th nationally in per capita income. The jobs provided by this
project allow these households to earn more than most other occupations in Knox County including construction,
manufacturing, utilities and real estate
Numerous studies indicate that a person’s earning potential can be directly linked to his or her level of education.
In 2008, only 8.8% of Knox County residents held bachelors or higher degree and 45.9% of residents did not have
high school diplomas greatly limiting their earning potential. It is estimated that a persons with only a high school
education will earn approximately half of what a person with a college degree with similar experience would earn. A
person lacking a high school education will earn a third of the income of a college graduate:
Source: U.S. Bureau of Labor Statistics
DEP Form 7032 - 6 - May 19, 2009
These earnings will help these households to maintain or improve their current economic status and provide
opportunities for gains in social welfare only realized from enhanced income. Higher earnings have been linked to
lower crime rates, reduced welfare and healthier lifestyles.
This project will remove approximately 240,000 of coal that would not have been recovered or made available to the
market otherwise. This will result in employment for approximately 48 people, aid in development and maintenance of
indirect jobs and will increase the amount of money the area receives in personal and severance taxes. Knox County
should see the return of over $300,000 in severance tax dollars from this project alone.
DEP Form 7032 - 7 - May 19, 2009
III. Alternative Analysis
1. Pollution prevention measures:
(Discuss the pollution prevention measures evaluated including the feasibility of those measures and the cost.
Measures to be addressed include but are not limited to changes in processes, source reductions or substitution with
less toxic substances. Indicate which measures are to be implemented.)
As an alternative treatment option, sand filtration was evaluated but deemed not applicable. Sand filtration is used
primarily as a pre-treatment to remove microbial contaminants, not particulate matter, in storm run-off in smaller,
urban drainage areas. The high solids involved in a storm event could possibly clog the filtration unit rendering it
ineffective. Sand filters do not control storm water run off and do not prevent downstream bank and channel
erosions as proposed sediment structures are design to do. Also, the operational effectiveness of these units in
colder climates and freezing conditions are not yet know. Studies indicate a treatment cost of $12 per cubic foot for
this type of treatment.
Constructing an on-site storm water treatment facility was considered. The volume of discharge and the
lift required make this an unfeasible option. Consultation with Beckman Environmental in Cincinnati, Ohio, a
company that specializes in these types of constructions, revealed a recent bid on a project in Columbus, Ohio
involving a lift of 30 feet, a peak discharge of 3800 gpm, a grit removal station, and influent and effluent lines at $2.5
million dollars. Using this scenario, treatment would exceed $650/gallon volume.
Accepting the more stringent discharge limitations was considered but because this would require more aggressive
chemical treatment, the real potential for an environmental or personnel exist. Based on information from OSMRE,
the cost of chemical treatment of a mildly acidic mine drainage with an average flow of 100 gpm using caustic sode
was $94,784. With a possible flow of over 250,000 g.p.m. during a rainfall event, the cost of this option would be
prohibitive.
Choosing not to mine this area as an alternate to lowering water quality was evaluated but since this location is
going to be impacted in preparation for a house site, regulations associated with the resource recovery will require
adherence to all limitations of dust, noise and environmental impacts.
Alternate mining locations and mining methodologies are not applicable to this project.
This operation will use surface techniques to recover coal reserves. Existing roads and infrastructure will be used
DEP Form 7032 - 8 - May 19, 2009
2. The use of best management practices to minimize impacts:
(Discuss the consideration and use of best management practices that will assist in minimizing impacts to water
quality from the proposed permitted activity.)
Prudent care will be exercised to minimize impacts to water quality within the permit area.
Construction and in-stream work will be scheduled during low flow or no flow conditions as feasible.
Silt control will be established before this area is disturbed.
Existing vegetation will be preserved as possible and vegetative cover will be reestablished as soon as possible.
All water leaving the permit area will pass through a sediment control structure before exiting the permit area.
These structures are engineered to be the most efficient and least invasive and are designed to prevent sediment
from entering the stream in significant quantities by allowing ample time for solids to settle to the bottom of the
pond.
Point source discharge will be specifically identified as to source and location. Surface and ground water
monitoring plans have been designed, and will be used to identify any alteration in water quality or quantity.
Compliance with the limits established for the outlets in the KPDES permit are designed to prevent adverse impacts
to the receiving channels.
Temporary sediment control devices, including silt fences, hay bales, ditches and berms will be used
to direct flow to the sediment structures.
Stockpiles and/or overburden storage sites will be placed out of drainage patterns.
Upon completion of mining, all exposed coal seams and any toxic, combustible or other waste materials will be
covered with a minimum of four feet of non-toxic and non-combustible material. This material may be blended or
treated to neutralize toxicity in order to prevent pollution, sustain combustion, and/or minimize any adverse affects.
An emergency spill response and clean up plan will be maintained to prevent potential release into the waterway.
DEP Form 7032 - 9 - May 19, 2009
3. Recycle or reuse of wastewater, waste by-products, or production materials and fluids:
(Discuss the potential recycle or reuse opportunities evaluated including the feasibility of implementation and the
costs. Indicate which of, of these opportunities are to be implemented)
Limited potential for recycle or reuse of water exists within the project area.
Water from sediment control structures could be used for on site dust suppression, hydroseeding and when
applicable deep mine and preparation plant operation.
Dust suppression typically involves using large water trucks to spray haul roads, material stockpiles, and other nonvegetated
areas being worked by equipment.
The volume of these tankers vary but an industry average is about 4,000 -5,000 gallons. Depending on the size of
the operation and weather conditions, an operation could use up to 30,000 gallons of water per day for dust
suppression during dry conditions. Estimating that suppression would be needed 100 work days in a calendar year,
the annual usage would be 3 million gallons.
During reclamation, hydroseeding is used to evenly distribute seed, fertilizer and mulch without encroaching on
minimally compacted areas. Hydroseeding is the process where seed, fertilizer, mulch, and water are mixed
together to form a slurry mixture that is sprayed, under pressure for seeding. The ratio of seed mixture to water
varies but an approximate ratio is 1:3. In order to use hydroseeding as an application process, access to a water
source has to be within close proximity of the project.
Industry reclamation personnel estimate the usage of water resources for hydroseeing application at 3500 gallons
per acre. Water application to hydro seed this permit area would be approximately 230,000 gallons. This
represents a one-time application of which the majority would occur after resource recovery is completed.
Preparation plants are normally fixed structures whose location may be central to several operations and rail
loading facilities. Preparation plants routinely withdraw water for the operation of these facilities however; there is
no preparation plant at this site.
This project proposes to use surface techniques to recover these coal reserves. Underground mining is not
applicable to this project.
DEP Form 7032 - 10 - May 19, 2009
III. Alternative Analysis - continued
4. Application of water conservation methods:
(Discuss the potential water conservation opportunities evaluated including the feasibility of implementation and
the costs. Indicate which of, of these opportunities are to be implemented)
Available and practical water conservation methodology will be employed by Cambrian Coal Corp. during the life of
this project.
The drainage area for this permit amendment area is 172.38 acres. The possible peak discharge during a 25
year/24 required storm event could be more than 350,000,000 gallons per day.
Water from sediment control structures can be used for on site dust suppression, hydro seeding and when
applicable preparation plant operation.
Dust suppression typically involves using large water trucks to spray haul roads, material stockpiles, and other
areas being worked by equipment.
The volume of these tankers vary but an industry average is about 4,000 -5,000 gallons. Depending on the size of
the operation and weather conditions, an operation could use up to 30,000 gallons a water per day for dust
suppression during dry conditions. Estimating that suppression would be needed 100 work days in a calendar year,
the annual usage would be 3 million gallons.
During reclamation, hydroseeding is used to evenly distribute seed, fertilizer and mulch without encroaching on
minimally compacted areas. Hydroseeding is the process where seed, fertilizer, mulch, and water are mixed
together to form a slurry mixture that is sprayed, under pressure for seeding. The ratio of seed mixture to water
varies but an approximate ratio is 1:3. In order to use hydroseeding as an application process, access to a water
source has to be within close proximity of the project.
Industry reclamation personnel estimate the usage of water resources for hydroseeing application at 3500 gallons
per acre. Water application to hydro seed this permit area would be approximately 230,000 gallons. This
represents a one time application of which the majority would occur after resource recovery is completed.
Preparation plants are normally fixed structures whose location may be central to several operations and rail
loading facilities. Preparation plants routinely withdraw water for the operation of these facilities. There is no
preparation plant at this site.
Using water already impounded in the sediment control structures for these purposes conserves water and confines
withdrawal to the project location. However, not all the water resulting from this site can be used for these purposes
and discharge is still necessary to the mining process and to maintain the stream function.
DEP Form 7032 - 11 - May 19, 2009
5 Alternative or enhanced treatment technology:
(Compare feasibility and costs of proposed treatment with the feasibility and costs of alternative or enhanced
treatment technologies that may result in more complete pollutant removal. Describe each candidate technology
including the efficiency and reliability in pollutant removal and the capital and operational costs to implement those
candidate technologies. Justify the selection of the proposed treatment technology.)
Sand filtration is used primarily as a pre-treatment to remove microbial contaminates, not particulate matter, in
storm run-off in smaller, urban drainage areas. As an alternative treatment option, sand filtration was evaluated but
deemed not applicable. The high solids involved in a storm event could possibly clog the filtration unit rendering it
ineffective. Sand filters do not control storm water flow and do not prevent downstream bank and channel erosions
as proposed sediment structures are designed to do. Also, the operational effectiveness of these units in colder
climates and freezing conditions are not yet know. Studies indicate a treatment cost of $12 per cubic foot volume*
for this type of treatment
The volume of discharge and the lift required make construction of an on-site water treatment facility unfeasible.
Consultation with Beckman Environmental in Cincinnati, Ohio, a company that specializes in these types of
constructions, revealed a recent bid on a project in Columbus, Ohio involving a lift of 30 feet, a peak discharge of
3800 gpm, a grit removal station, and influent and effluent lines at $2.5 million dollars. Using this scenario,
treatment would exceed $650/gallon volume.
Accepting the more stringent discharge limitations was considered but because this would require more aggressive
chemical treatment, the real potential for an environmental or personnel accident exist. The costs are extreme and it
was dismissed. Based on information from OSMRE, the cost for chemical treatment of a mildly acidic mine
drainage with an average flow of 100 gpm using caustic soda was $94,784. With a possible flow of 3,871 gpm
during a10yr/24hr rainfall event, the cost of this option would make the cost of this option prohibitive for this small
project.
Comparatively, an industry estimate for construction of a medium capacity embankment pond is approximately
$40,000 while construction of a dug out bench pond is estimated at roughly $7,500. These structures are designed
to comply with KPDES permit limitations preventing degradation of stream quality.
Temporary “dug out” sediment control structures are proposed and are the preferred methodology for sediment
control from the disturbed areas. Runoff from this project will be directed to these structures which provide ample
retention time for solids to settle. These structures will be cleared of sediment as is necessary and material will be
placed in an upland area away from the natural drainage. These structures are proposed as bench structures and
are not in a natural drain. They will be removed as soon as the extraction process for the area is complete limiting
impact.
Sediment control structures are designed in accordance with regulations that require 0.125 acre/feet of sediment
storage capacity per ace of disturbance and are engineered to meet K.P.D.E.S. effluent discharge limitations.
DEP Form 7032 - 12 - May 19, 2009
III. Alternative Analysis - continued
6. Improved operation and maintenance of existing treatment systems:
(Discuss improvements in the operation and maintenance of any available existing treatment system that could
accept the wastewater. Compare the feasibility and costs of improving an existing system with the feasibility and
cost of the proposed treatment system.)
Sediment structures are designed to accommodate a 10 year 24 hour storm event while allowing time for settling of
sediment prior to discharge into the receiving stream to meet effluent discharge limitations. Discharge from these
structures is precipitation dependent and these structures are designed to safely impound and discharge the runoff
from the project area while limiting the impact to what is required based on industry standards.
Treatment, including the use of flocculants, prior to entry into the sediment control structures was examined.
Although sometimes effective treating concentrations of high solids, the use of flocculants would require additional
equipment, construction and cost. The flocculent has to be dispersed into the stream, a “mixing” area has to be
constructed and a primary “pond” is often recommended for the initial settling of large solid particles. Since the
sediment control structure should, under normal conditions, effectively treat the solids from this project, this option
creates additional impact, additional cost and additional hazards and is not necessary.
7. Seasonal or controlled discharge options:
(Discuss the potential of retaining generated wastewaters for controlled releases under optimal conditions, i.e.
during periods when the receiving water has greater assimilative capacity. Compare the feasibility and cost of such
a management technique with the feasibility and cost of the proposed treatment system.)
Flow from the area will be controlled with the use of sediment structures, diversion ditches, and temporary sediment
control devices so as not to create a plume, standing waters or fluctuations in normal water levels.
Sediment structures are designed to accommodate a 25 year 24 hour storm event while allowing time for settling of
sediment prior to discharge into the receiving stream to meet effluent discharge limitations. Discharge from these
structures is precipitation dependent and the design of the structures and the spillways does not facilitate the
impounding water for a controlled hydrological release.
Pumping of the ponds is not anticipated except for removal during final bond release or during an unanticipated
emergency event. If a situation requires pumping, then monitoring stations above and below the pumped inflow
area will be established. The monitoring stations will measure flow and pH for significant increases. Pumping will
not occur when flow is below the critical stream velocity of 1 c.f.s.
DEP Form 7032 - 13 - May 19, 2009
III. Alternative Analysis - continued
8 Land application or infiltration or disposal via an Underground Injection Control Well
(Discuss the potential of utilizing a spray field or an Underground Injection Control Well for shallow or deep well
disposal. Compare the feasibility and costs of such treatment techniques with the feasibility and costs of .proposed
treatment system.)
Flow from the area will be controlled with the use of the sediment structures, diversion ditches, and temporary sediment
control devices so as not to create a plume, standing water or fluctuations in normal water levels.
Sediment structures are designed to accommodate a 25 year 24 hour storm event while allowing tie for settling of
sediment prior to discharge into the receiving stream to meet effluent discharge limitations. Discharge from these
structures is precipitation dependent and the design of the structures and the spillways does not facilitate the impounding
water for a controlled hydrological release.
Pumping of the pond is not anticipated except for removal during final bond release or during an unanticipated emergency
event. If a situation requires pumping, then monitoring stations above and below the pumped inflow area will be
established. The monitoring stations will measure flow and pH for significant increases. Pumping will not occur when
flow is below the critical stream velocity of 1 c.f.s.
A small amount of water may be used for dust control and hydroseeding but because the slope is greater than 6%
broader land application is not feasible.
There are no known underground works in the area that could be considered as a subsurface disposal option. Such
works are considered as potentially dangerous due to the uncertainty of the condition of the remaining structures. The
possibility exists that pumping water into these works could cause a “blow-out” or leakage leading to both a public safety
and environmental threat.
In order to dispose of this water using a spray field disposal technique, a central collection system would have to be
installed. This collection system would consist of a pond or a tank that would collect run off from the project area. Using
a spray application technique would require either the installation of a dispersion system or the purchase of a spray truck.
Since the slope of the land is greater than 6%, broad land application is not applicable.
9 Discharge to other treatment systems
(Discuss the availability of either public or private treatments systems with sufficient hydrologic capacity and
sophistication to treat the wastewaters generated by this project. Compare the feasibility and costs of such options with
the feasibility and costs of the proposed treatment system.)
The nearest sewage treatment plant is approximately 2.5 miles away at Barbourville, Kentucky. The plant was not
designed for, or capable of, effectively treating either the type or volume of water possible with this project. Influx of water
from this facility would overload this facility leading to a bypass which would result in the discharge of untreated municipal
wastes creating a potentially serious public health risk
Because of the terrain, routing water to this plant would require approximately 15,000 ft of carrier line, an extensive
network of pump and lift stations and obtaining numerous easements and right-of-ways. Conservatively estimating line at
$50/foot, a minimum of 2 lift stations per mile, a central collection system, ignoring other requirements, the minimum cost
of this option would exceed $1.5 million dollars.
DEP Form 7032 - 14 - May 19, 2009
*Table 1
Pressure (LPS)
Pumping Stations (No. per mile
by topography)
Flat
Rolling
Steep
200 gpm P.S. $54,000
0
0
2
100 gpm P.S. $43,200
0
1
2
Composite Cost
$43,200
$194,400
Gravity
Pumping Stations (No. per mile
by topography)
Flat
Rolling
Steep
200 gpm P.S. $54,000
1
0
2
100 gpm P.S. $43,200
2
1
2
Composite Cost
$140,400
$43,200
$194,400
A Mathematical Model For Estimating Sewer Costs”
by George A. Earle, III, P.E. and R. Paul Farrell Jr., P.E.,
Environment One Corporation
*Lift stations are site specific and vary greatly but are specific to topography and substrate composition:
Transporting this volume of water by self-contained disposal trucks to a disposal site would be excessively expensive.
Based on a 25 year, 24 hour storm event calculation, the possible peak discharge from this project could exceed 3,800
g.p.m.. Rates quoted from Somerset Environmental in Somerset, Kentucky indicated charges of $65/hour (gate to
gate)/3,000 gallon pick-up of non-hazardous wastewater and a
.49/gallon disposal fee.
The excavation, grading and installation of lines and required lift stations would create detrimental environmental effects.
DEP Form 7032 - 15 - May 19, 2009
DEP Form 7032 - 16 - May 19, 2009