Utah’s most productive coal mine gets a life line from Trump’s federal land managers

Bureau of Land Management approved a 7-million-ton expansion to the Lila Canyon mine.

Al Hartmann | The Salt Lake Tribune 10/23/2009 Coal truck leaves the coal-fired Hunter Power Plant just south of Castle Dale, Utah after making a delivery. Much of the coal from Emery County's Lila Canyon mine is burned at Hunter and its sister Huntington plant. The Bureau of Land Management has approved a proposal to expand Lila Canyon's lease by 7 million tons, while shelving a proposal for a much larger coal lease to the mine's operator.

Coal remains king in Utah’s Emery County despite bankruptcies, shrinking demand and obstacles shipping it overseas.

The Bureau of Land Management quietly signed off on a plan to expand a Utah coal producer’s federal lease by 7.2 million tons, adding two or three years of additional production from Emery County’s Lila Canyon mine. But at the same time it shelved a proposal to issue a much larger lease to the mine’s operator, the reorganized Murray Energy Corp., which recently emerged from bankruptcy with a new name and corporate structure.

Even as mines shutter all over the United States in the face of declining demand for coal in the power sector, Lila has steadily increased its output since it went into production about a decade ago, reaching 3.7 million tons in 2019.

It now vies with SUFCO and Skyline for the distinction as Utah’s most productive mine, producing 3.3 million tons last year, according the U.S. Mine Safety and Health Administration.

According to a recent report by the Intermountain Power Agency, Lila Canyon produces nearly seven tons of coal per man-hour worked, making it the state’s most productive mine relative to the size of its work force.

The quality of Lila Canyon coal is also Utah’s best in terms of energy per pound, although it contains more sulfur than the coal from most other mines.

At its current rate of production, Lila Canyon would run out of coal to mine by 2026, according to two draft environmental assessments the BLM has released in recent months. One assessment was for the lease expansion and the other for a proposed 32-million-ton lease that would have expanded the mine onto a 4,200-acre tract called Williams Draw.

According to a spokeswoman in the BLM’s state office, the agency has no plans to issue a final decision on the Williams Draw lease, putting the prospect of the mine’s eventual expansion in doubt. It is unlikely the new administration will push that lease given President Joe Biden’s pledge to halt the leasing of fossil fuel on public lands.

Busy contesting other extractive projects fast-tracked by the Trump administration, Utah environmental groups did not aggressively fight the Lila Canyon lease proposals. But the Southern Utah Wilderness Alliance strongly opposed the leases, which would result in more coal available for combustion in Utah and potentially across the Pacific in Japan, where a few million tons of Utah coal is shipped each year.

“Extending the life of the Lila Canyon Mine is another nail in the coffin for the unfolding climate disaster in Utah and across the West,” SUWA attorney Steve Bloch said. “We know that there’s a direct relationship between coal mined and burned in Utah and in the region and the impact that that has here locally on the climate. Low snow pack. More wildfires, more drought.”

The Lila Canyon mine, located about 10 miles south of East Carbon in the Book Cliffs, is operated by the former UtahAmerican Energy, a subsidiary of the mammoth corporation once headed by the late coal baron Robert Murray. The operator is now known as Emery County Coal Resources, itself a newly created subsidiary of American Consolidated Natural Resources, the reorganized company following the 2019 bankruptcy of Murray Energy Corp.

While coal production everywhere else in the United States has been slipped fast, it has been increasing at Emery County’s underground mines, which yield a high-energy, low-sulfur bituminous product preferred by power generators.

According to the Interior Department’s Office of Natural Resources Revenue, Emery County’s federal lands yielded nearly 5 million tons in 2018, nearly double the 2.7 million produced in 2017. Subjected to a standard 8% royalty, the 2018 production generated $12.2 million in federal revenue, which was split with the state as per policy.

The BLM, however, often reduces these Emery operators’ royalties at times when these mines run into technical challenges or poor quality coal, thus lowering the proceeds back to the federal treasury.

In 2019, the agency agreed to temporarily reduce Lila Canyon’s royalty to 5% ”due to challenging geologic and engineering conditions,” said BLM spokeswoman Kimberly Finch.

The Lila Canyon mine employs 230 people and much of its output is burned at PacifiCorp’s Hunter and Huntington power plants, also in Emery County. Despite the mine’s lowered royalty, county officials regard Lila Canyon as an important revenue source and “crucial for the economic viability” of both Emery and Carbon counties.

“Maintaining the current workforce is important to the area, as is the extended life of the mine,” officials wrote in the county’s official comments on the project. “In addition, the taxes, revenues and royalties generated as a result of the lease modifications are several million dollars.”