The prospect of a new reservoir to replace the aging and problem-ridden Grassy Trail Reservoir may no longer be in the works as plans for a new reservoir have been called off by the mining company behind the project.
According to sources, UtahAmerican Energy Inc., the company behind the push to relocate Grassy Trail Reservoir, have backed away from the project and are no longer focusing on building a new reservoir.
At the East Carbon City Council meeting last week, Jeremy Humes, East Carbon city attorney, informed the council that the mining company was terminating the reservoir relocation project. Humes said the city had been negotiating in good faith with the mine throughout the length of the project, including to the day of hearing about the project being called off. Humes also said West Ridge Resources, Inc., a subsidiary of UtahAmerican, may have known about canceling the project for awhile but they broke the news to all of the entities involved last Tuesday.
"It really hits you in the head hard," Councilman Darrell Valdez said of hearing the information about the project being terminated.
The news puts the city of East Carbon in a difficult position, Humes said. Along with the termination of the project, Humes said West Ridge will not cover the costs of bills incurred by the city for the project above a predetermined amount. The mine agreed in the original agreement to pay $75,000 to help the city cover the costs of having specialists hired to work on the project. Currently the city has gone over that amount by about $10,000, according to Humes.
Experts hired by the city to work on the project can no longer participate in any meetings because the city does not have the financial resources to pay them, Humes said.
At the city council meeting, councilors asked Humes if there was an explanation for the mine terminating the project. Humes said West Ridge Mine did not immediately give an explanation for the project being canceled, but he was certain the company would provide a formal statement concerning their actions.
On Monday, Rob Murray, a Vice President of Business Development and External Affairs with Murray Energy Corporation, released a statement regarding the reason why West Ridge Mine has terminated its pre-development agreement for the relocation of storage capacity of Grassy Trail Reservoir with the cities of East Carbon and Sunnyside.
"The reason for the termination is that the West Ridge Mine has encountered unexpected and unforeseeable geologic conditions - specifically a significant shale parting and coal seam split within the Lower Sunnyside Coal Seam - as the Mine has progressed to the east towards Grassy Trail Reservoir. Inspections conducted by our geologists and consultants have determined that that the mine-ability of the coal in this area is not possible," the statement read.
The statement concluded, "As a result, consideration of future mining of the Lower Sunnyside Seam in the vicinity of the Grassy Trail Reservoir has been terminated. The West Ridge Mine will continue uninterrupted mining of the rest of its coal reserves."
Orlando LaFontaine, East Carbon City mayor, said he first heard of the mine calling off the project on Tuesday. Like others on the city council, he said he was frustrated at all of the work that has been done on the project up to this point only to see things fall through. LaFontaine said both East Carbon City and Sunnyside City just signed water agreements with Sunnyside Co-Generation just a week prior to the reservoir relocation project being called off.
LaFontaine also said he was getting memos from West Ridge Mine about the development stages of the project right up to last Tuesday, when the news broke about the work on a new reservoir being stopped.
"I'm a little disappointed about this," LaFontaine said in a telephone interview on Friday. "It feels like we've been railroaded with this news of the project being terminated."
The relocation project would not only have included the building of a new reservoir but the impact of the project could also have extended the life of West Ridge Mine by 18 months to two years. Because the mining company did not find the coal they were searching for, the West Ridge Mine will still have about two years of mining left.
Currently Grassy Trail Reservoir has about 800 acre feet of capacity. Plans for the new reservoir would have seen the capacity increased to about 1,000 acre feet.
East Carbon City council members were in agreement that a new reservoir is still needed for the area. Studies on Grassy Trail have shown water has been leaking from the reservoir and high amounts of silt have been reported.
"There are a lot of issues with the current reservoir," said Councilman Andy Urbanik. "A new reservoir may be a solution to the problems facing our current reservoir."
Urbanik said the city may need to proceed working on building a new reservoir themselves and possibly in conjunction with Sunnyside City. Council members discussed options including approaching the state to see if they could help with building a new reservoir, getting funding from the Community Impact Board and others.
With the project being terminated, there are still many questions left for both East Carbon City and Sunnyside City to answer. Specifically, questions about the operating agreement, who will be responsible for covering the costs over the agreed limit of $75,000 incurred for bringing in specialists to work on the project and other questions will still need to be discussed and answered.
LaFontaine said he is looking into meeting with representatives of the Division of Oil, Gas and Mining (DOGM) within the week to figure out what the city can do with the project at this point.