april 13, 2006 · page 2 april 13, 2006 osm compliance report c/015/007 03/14/2006 complete hidden...

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April 13, 2006 James Fulton, Chief Denver Field Division Office of Surface Mining Reclamation and Enforcement Western Regional Coordinating Center 1999 Broadway, Suite 3320 P.O. Box 46667 Denver, Colorado 80201-6667 Dear Mr. Fulton: Enclosed, please find hard copies of the following inspection reports, notice of violations, cessation orders, modifications, terminations, vacations, proposed assessments, finalized assessments, conference requests, hearings held, and fines paid. Inspections Permit # Inspection Date Type Mine Name C/007/001 03/01/2006 Partial White Oak C/007/005 03/17/2006 Complete Skyline C/007/006 03/29/2006 Complete Star Point C/007/011 03/14/2006 Complete Hiawatha Complex C/007/012 03/28/2006 Complete Wellington Prep Plant C/007/016 03/07/2006 Complete Gordon Creek 2, 7, 8 C/007/018 03/10/2006 Complete Soldier Canyon C/007/019 03/17/2006 Complete Centennial Project C/007/020 03/24/2006 Complete Horizon C/007/022 03/31/2006 Partial Savage Coal Terminal C/007/033 03/15/2006 Partial Wildcat Loadout C/007/034 03/10/2006 Complete Banning Loadout C/007/035 03/16/2006 Partial Sunnyside Refuse/Slurry C/007/038 03/16/2006 Complete Willow Creek C/007/039 03/30/2006 Partial Dugout Canyon C/007/041 03/22/2006 Partial West Ridge C/007/042 03/16/2006 Partial Star Point Refuse

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Page 1: April 13, 2006 · Page 2 April 13, 2006 OSM Compliance Report C/015/007 03/14/2006 Complete Hidden Valley C/015/015 03/07/2006 Partial Emery Deep C/015/017 03/06/2006 Partial Des

April 13, 2006 James Fulton, Chief Denver Field Division Office of Surface Mining Reclamation and Enforcement Western Regional Coordinating Center 1999 Broadway, Suite 3320 P.O. Box 46667 Denver, Colorado 80201-6667 Dear Mr. Fulton:

Enclosed, please find hard copies of the following inspection reports, notice of violations, cessation orders, modifications, terminations, vacations, proposed assessments, finalized assessments, conference requests, hearings held, and fines paid. Inspections Permit # Inspection Date Type Mine Name C/007/001 03/01/2006 Partial White Oak C/007/005 03/17/2006 Complete Skyline C/007/006 03/29/2006 Complete Star Point C/007/011 03/14/2006 Complete Hiawatha Complex C/007/012 03/28/2006 Complete Wellington Prep Plant C/007/016 03/07/2006 Complete Gordon Creek 2, 7, 8 C/007/018 03/10/2006 Complete Soldier Canyon C/007/019 03/17/2006 Complete Centennial Project C/007/020 03/24/2006 Complete Horizon C/007/022 03/31/2006 Partial Savage Coal Terminal C/007/033 03/15/2006 Partial Wildcat Loadout C/007/034 03/10/2006 Complete Banning Loadout C/007/035 03/16/2006 Partial Sunnyside Refuse/Slurry C/007/038 03/16/2006 Complete Willow Creek C/007/039 03/30/2006 Partial Dugout Canyon C/007/041 03/22/2006 Partial West Ridge C/007/042 03/16/2006 Partial Star Point Refuse

Page 2: April 13, 2006 · Page 2 April 13, 2006 OSM Compliance Report C/015/007 03/14/2006 Complete Hidden Valley C/015/015 03/07/2006 Partial Emery Deep C/015/017 03/06/2006 Partial Des

Page 2 April 13, 2006 OSM Compliance Report C/015/007 03/14/2006 Complete Hidden Valley C/015/015 03/07/2006 Partial Emery Deep C/015/017 03/06/2006 Partial Des Bee Dove C/015/018 03/16/2006 Complete Deer Creek C/015/019 03/06/2006 Complete Cottonwood/Wilberg C/015/025 03/14/2006 Complete Bear Canyon C/015/032 03/08/2006 Complete Crandall Canyon C/041/002 03/07/2006 Complete SUFCO Notice of Violation Permit # Date Issued NOV # Mine Name C/015/025 04/10/2006 N06-46-2-2 Bear Canyon C/015/025 04/10/2006 N06-46-2-2 Bear Canyon Insp State NOV/CO Modification Date Permit # Date Issued Date Modified NOV/CO # Mine Name C/015/015 02/16/2006 03/23/2006 N06-39-2-1 Emery Deep Proposed Assessments Permit # Date Issued NOV/CO # Mine Name C/015/015 02/16/2006 N06-39-2-1 Emery Deep Conference Requests Permit # Date Requested NOV/CO # Mine Name C/015/018 02/23/2006 N06-39-1-1 Deer Creek C/007/019 02/27/2006 N06-49-1-1 Centennial Informal Hearing/ Assessment Conference Scheduled Permit # Date Scheduled NOV/CO # Mine Name C/015/018 03/28/2006 N06-39-1-1 Deer Creek C/007/019 03/28/2006 N06-49-1-1 Centennial

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Page 3 April 13, 2006 OSM Compliance Report Hearings Held & Finalized Assessment Permit # Date Held NOV/CO # Mine Name C/041/002 01/31/2006 N05-53-1-1 SUFCO Fines Received Permit # Date Received NOV/CO # Mine Name C/041/002 03/20/2006 N05-53-1-1 SUFCO C/015/015 04/11/2006 N06-39-2-1 Emery Deep All of the listed inspection reports, modifications, terminations, vacations, assessments and correspondence, included in this envelope have been verified by one of the Permit Supervisors.

Sincerely,

Stephanie Dunlap Secretary

Enclosure O:\I & E\OSM comprpt\2006\04132006.doc

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Inspection Report

C0070001Permit Number:PARTIAL

Wednesday, March 01, 2006

3/1/2006 11:00:00 AMMonday, March 06, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/1/2006 10:00:00 AMStart Date/Time:

Sunny, 30's, 30 inches of snow cover

Inspector:

Weather:

Steve Demczak, Environmental Scientist III

pgrubaug

3/20/2006

Accepted by:

889InspectionID Report Number:

Representatives Present During the Inspection:

Steve Demczak Environmental Scientist IIIOGM

2525 HARRODSBURG RD STE 235, LEXINGTON KY 40504-1628WHITE OAK MINE

LODESTAR ENERGY INCLODESTAR ENERGY INC

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

3,906.00151.10

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Monday, February 27, 2006

Outstanding Violations: OSM- C04-140-116-001, DOGM- FTA C03-39-1-1, FTA C03-42-1-1, C03-42-1-2, FTA C03-421-3, C0-51--1-1,C03-50-2-1, FTA C04-39-1-1, C03-39-1-1, C03-42-1-2, C03-42-1-1, C03-42-1-3,C03-51-1-1, N03-46-1-1, and N03-50-1-1. These violations received an "Exclusionary Code" in the AVS on October 21, 2004 due to the General Settlement Agreement signed on August 18, 2004. The Rennert parties, Congress Financial, Wexford and the Debtors trustee will receive the "exclusion" code. Lodestar Energy, Inc will remain liable in the AVS.

Reclamation was completed at the mine on November 1, 2005 and at the loadout on November 4, 2005.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

39

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Steve Demczak, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

FORFEITURE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070001Permit Number:PARTIALWednesday, March 01, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070001Permit Number:PARTIALWednesday, March 01, 2006

Inspection Type:Inspection Date:

The snow is above the main gates at the loadout and mine site.

2. Signs and Markers

The mine site and loadout is covered with a minimum of 24 inches of snow.

3. Topsoil

Sediment ponds are snow covered at the loadout.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

The Division issued the Determination to Forfeit at the White Oak Mine on May 1, 2003. Chapter 7 was filed by Lodestar Energy, Inc. on July 15, 2003. The Division negotiated with the Bankruptcy Trustee and Frontier Insurance to stabilize this site. The amount of $999,000 was escrowed from Frontier Insurance Company on October 3, 2003. Ledcor (the Frontier contractor) started work at the White Oak Mine on October 13, 2003. Ledcor (the contractor for Frontier) left the site for the winter on December 17, 2003. Reclamation work at the White Oak Loadout is being done by the Mark Wayment group. $1.217 million was received from the Global Settlement Agreement and the contractor VCM was awarded the contract to continue reclamation at the White Oak Mine. Work started on October 3, 2004 and ended in December 2004. Reclamation work began in June 2005 and was completed on November 1, 2005 for the mine and November 4, 2005 for the loadout.

On June 18, 2004, Lodestar trustee Bill Bishop filed the master settlement between various parties (including Renco and Wexford Capital) for reclamation in a “General Settlement Fund” outside of the Lodestar bankruptcy estate. Utah received $1.217 million dollars - this was finalized by the Bankruptcy Court on August 18, 2004.

The contract with the Frontier contractor, Ledcor, was terminated in June 2004. The monies remaining from that contract were used for reclamation at White Oak.

AMR programs administered the reclamation work at the White Oak Mine and did additional reclamation at the loadout. All reclamation work is now completed. The Division will contract the spraying of weeds annually at the mine site.

22. Other

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Inspection Report

C0070005Permit Number:COMPLETE

Friday, March 17, 2006

3/17/2006 2:00:00 PMMonday, February 27, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/17/2006 10:00:00 AMStart Date/Time:

Snow covered, 30's

Inspector:

Weather:

Steve Demczak, Environmental Scientist III

pgrubaug

3/30/2006

Accepted by:

912InspectionID Report Number:

Representatives Present During the Inspection:

Gregg Galecki Environmental CoordinatorCompany

Steve Demczak Environmental Scientist IIIOGM

HC 35 BOX 380, HELPER UT 84526SKYLINE MINE

CANYON FUEL COMPANY LLCCANYON FUEL COMPANY LLC

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

10,374.0079.12

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 29, 2006

Permit Conditions:1) Submit Water Monitoring data in electronic format to the Division.2) Canyon Fuel Co. must submit all existing studies and data for the update of the PHC as a result of the mine inflows.3) Canyon Fuel Co. must submit cumulative monthly flow data for discharges into Electric Lake and Eccles Creek.4) Canyon Fuel Co. must have a qualified person compile and analyze past macroinvertebrate studies on Eccles Creek into one report.5) Canyon Fuel Co. must initiate an update to and further evaluation of the Hydrologic and Channel-Stability Evaluation of Eccles and Mud Creek.

The permittee is meeting these permit conditions.

Permit Renewal was April 30, 2002, and expires on April 30, 2007. The state permit for full extraction in North Lease was approved by the state on December 2, 2005 and is awaiting mining plan approval by the Secretary of the Interior.

The permittee has the following permitting action with the Division: Midterm Permit Review.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

39

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Steve Demczak, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070005Permit Number:COMPLETEFriday, March 17, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070005Permit Number:COMPLETEFriday, March 17, 2006

Inspection Type:Inspection Date:

The permittee has submitted several amendments to the Division. These are a) Modification to Table Of Contents, b) Silt Fence Removal, c) South Fork Portal Reclamation Contours, and d) Eccles Creek/Mud Creek Evaluations.

1. Permits, Change, Transfer, Renewal, Sale

The topsoil piles were snow covered.

3. Topsoil

The diversions were opened and functioning as designed.

4.a Hydrologic Balance: Diversions

The sediment ponds were inspected for the fourth quarter by the permittee. The inspection had no report of hazardous conditions.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

Other sediment control measures were snow covered.

4.c Hydrologic Balance: Other Sediment Control Measures

The permittee is in the process of submitting 4th quarter water information into the EDS.

4.d Hydrologic Balance: Water Monitoring

The permittee conducted a fourth quarter inspection on November 7, 2005. No hazardous conditions were reported.

7. Coal Mine Waste, Refuse Piles, Impoundments

The mine site was clear of non-coal waste material.

8. Noncoal Waste

No new support facilities have been constructed since the last inspection.

18. Support Facilities, Utility Installations

The bonding amount is $5,135,000. The insurance policy will expire on July 31, 2006.

21. Bonding and Insurance

The Mining and Reclamation permit will expire on June 30, 2007. The UPDES permit will expire on November 30, 2009.

22. Other

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Inspection Report

C0070006Permit Number:COMPLETE

Wednesday, March 29, 2006

3/29/2006 2:00:00 PMWednesday, November 23, 2005

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/29/2006 9:00:00 AMStart Date/Time:

Hail, Sleet & Rain, Temp 36 Deg. F.

Inspector:

Weather:

Karl Houskeeper, Environmental Scientist III

pgrubaug

3/30/2006

Accepted by:

913InspectionID Report Number:

Representatives Present During the Inspection:

Dennis Ware ControllerCompany

Karl Houskeeper Environmental Scientist IIIOGM

PO BOX 30, HELPER UT 84526-0030STAR POINT MINE

PLATEAU MINING CORPPLATEAU MINING CORP

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

8,919.91113.34113.34

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 29, 2006

There are no pending compliance actions. The only permit condition currently in place is that the permittee must submit all water monitoring data in an electronic format to the Division's web site. The permittee is complying with this stipulation.

UPDES Permit UT0023736 inactivated by letter dated November 18, 2004.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

49

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Karl Houskeeper, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

RECLAIMED PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070006Permit Number:COMPLETEWednesday, March 29, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070006Permit Number:COMPLETEWednesday, March 29, 2006

Inspection Type:Inspection Date:

The ID sign is located at the public access to the permit boundary. Other markers observed during the inspection were in place as required by the coal rules.

2. Signs and Markers

Fourth quarter 2005 water monitoring is in the EDI website and uploaded. Water monitoring is current.

4.d Hydrologic Balance: Water Monitoring

The Air Quality Permit DAQE-886-96 was issued on 09/20/1996 and remains in effect.

20. Air Quality Permit

The bond issued by Travelers Casualty and Surety Company of America, Bond No. 104329368 was ridered to $3,118,400 on October 12, 2004 (reduced from $7,796,000 for the Phase I bond release).

21. Bonding and Insurance

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Inspection Report

C0070011Permit Number:COMPLETE

Tuesday, March 14, 2006

3/14/2006 2:00:00 PMTuesday, February 14, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/14/2006 10:00:00 AMStart Date/Time:

sunny, partly cloudy, 35, 8" of snow in town

Inspector:

Weather:

Joe Helfrich, Environmental Scientist III

whedberg

4/5/2006

Accepted by:

906InspectionID Report Number:

Representatives Present During the Inspection:

Mark Reynolds Resident AgentCompany

Joe Helfrich Environmental Scientist IIIOGM

PO BOX 1245, HUNTINGTON UT 84528HIAWATHA MINE COMPLEX

HIAWATHA COAL CO INCHIAWATHA COAL CO INC

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

12,177.00290.00

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Monday, March 20, 2006

The purpose of this site visit was to conduct a complete inspection of the Hiawatha complex. Recent snows limited access to the slurry ponds and shop area. There are no amendments pending.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

1

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Joe Helfrich, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 4

Inspection Continuation SheetC0070011Permit Number:COMPLETETuesday, March 14, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 4

Inspection Continuation SheetC0070011Permit Number:COMPLETETuesday, March 14, 2006

Inspection Type:Inspection Date:

The DOGM permit was issued on March 14, 2002 and expires on March 14, 2007. Other documents include the following:

-Certificate of Insurance by Scottsdale Insurance Co. Policy # CLS0668789 effective 01/27/2004 and expires 1/27/2006.-UPDES Permit UT-0023094 issued 10/01/2004 and expires 09/30/2009 at midnight.-Air Quality Permit BAQE-502-89 issued 07/25/1989 and remains in effect.-Bond is an irrevocable letter of credit issued by Bank One in the amount of $2,838,000.

1. Permits, Change, Transfer, Renewal, Sale

Signs containing the required information were posted at points of access to the mining facilities. At the time of this inspection, the only point of access was from the town of Hiawatha.

2. Signs and Markers

Although partially filled with snow, the diversions associated with the slurry ponds were functioning adequately. Diversions associated with the other disturbed areas were inaccessible.

4.a Hydrologic Balance: Diversions

The slurry ponds were inspected on 2/2/2006 showing no signs of erosion or instability. Fourth quarter inspections for the sediment ponds were conducted on 12/22/2005. The ponds were also in good repair and showed no signs of structural weakness or hazards.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

Hard copies of the water monitoring data for the fourth quarter were available for inspection. The sites were sampled on 10/26/2005. The data was uploaded into the Division's database on 3/16/2006. There were no inconsistencies or anomalies noted in the data.

4.d Hydrologic Balance: Water Monitoring

DMR's were current through February of 2006; reporting no discharge.

4.e Hydrologic Balance: Effluent Limitations

Comments noted under Item #4b.

7. Coal Mine Waste, Refuse Piles, Impoundments

Deer and elk have been wintering on the lower portions of the property near the slurry ponds.

9. Protection of Fish, Wildlife and Related Environmental Issues

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Page 4 of 4

Inspection Continuation SheetC0070011Permit Number:COMPLETETuesday, March 14, 2006

Inspection Type:Inspection Date:

The operation is inactive with the exception of the slurry removal from the #1 slurry pond.

15. Cessation of Operations

The roads to the slurry ponds were in good repair and snow packed.

16.a Roads: Construction, Maintenance, Surfacing

The bond is an irrevocable letter of credit issued by Bank One in the amount of $2,838,000. The insurance is current through 1/27/2007. A copy of the Insurance was available for inspection at the office located in Hiawatha.

21. Bonding and Insurance

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Inspection Report

C0070012Permit Number:COMPLETE

Tuesday, March 28, 2006

3/28/2006 1:00:00 PMTuesday, February 28, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/28/2006 8:30:00 AMStart Date/Time:

overcast 40 F, drizzling at 1 pm

Inspector:

Weather:

Priscilla Burton, Environmental Scientist III

whedberg

4/4/2006

Accepted by:

911InspectionID Report Number:

Representatives Present During the Inspection:

Priscilla Burton Environmental Scientist IIIOGM

Patrick D. Collins Resident AgentCompany

330 E 400 S STE 6, PO BOX 337 SPRINGVILLE UT 84663WELLINGTON PREPARATION PLANT

NEVADA ELECTRIC INVESTMENT CONEVADA ELECTRIC INVESTMENT CO

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

1,573.50392.00

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Tuesday, March 28, 2006

Confirmed fourth quarter monitoring was conducted. Confirmed progress is being made towards compiling AVS information for Annual Report. In Division files, found an archived map E9-3341 showing location of clearwater (buried)pipeline. Discussed possible scenarios for water flowing through this pipeline to the Dryer pond. Determined that this pipeline must be retained on current Map E9-3341 with explanation of water inflow to Dryer pond included in the MRP. R645-301-748 and 765 require that if a water well is exposed during reclamation, it will be closed. Therefore, final sealing of the Price River Water well and the “open ended pipe” must be completed in this next field season.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

37

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Priscilla Burton, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 4

Inspection Continuation SheetC0070012Permit Number:COMPLETETuesday, March 28, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 4

Inspection Continuation SheetC0070012Permit Number:COMPLETETuesday, March 28, 2006

Inspection Type:Inspection Date:

The Mining and Reclamation Permit was issued 12/10/2004 to Nevada Electric Investment Corp., Nevada (corporate offices in both Reno and Las Vegas). The permit expires in 2008.

1. Permits, Change, Transfer, Renewal, Sale

Fourth quarter pond certifications were done on October 26, 2005. All ponds were dry except the roadside pond which had four inches of water and the dryer pond which had 3.0 ft of water. Water level between the dryer pond and the source of inflow has reached equilibrium and the water is standing.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

The dryer pond was sampled February 22, 2006. Major cations are Ca, Mg, Na. Major anions are CO3 and HCO3. The total iron in the dryer pond water was compared to surface and ground water sampled during the 4th quarter on November 17, 2005: GW10 = 11 ppm, dryer pond = 3 ppm, and SW2A = 0.88 ppm total Fe. Water quality upstream and downstream of the pump house reclamation was compared. There was no difference in pH and TDS for the two locations.

4.d Hydrologic Balance: Water Monitoring

The two MSHA waste piles were inspected on October 26, 2005 by Mr. Dan Guy.

7. Coal Mine Waste, Refuse Piles, Impoundments

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Page 4 of 4

Inspection Continuation SheetC0070012Permit Number:COMPLETETuesday, March 28, 2006

Inspection Type:Inspection Date:

An archived map E9-3341(in the Division files) shows the location of the (buried) clearwater pipeline. This map was drawn in 1981. The buried clearwater pipeline is shown coming from the reclaimed Price River pumphouse across the Price River and along the south side of the river, turning under the railroad tracks to the auxilliary pond. [The existing map E93341 references the pipeline, but does not show its course.] A second map E9-3430 in the MRP provides a schematic in overview and cross section of the pumphouse and related Price River water well and the buried pipeline. Section 5.30 of the MRP describes the filling of the AuxilliaryPond with water directly from the clear water pipeline. [The Auxilliary Pond is adjacent to the Dryer pond.] Enlargement of the dryer pond in 1998 inadvertently removed a section of this buried pipeline. The Division was unaware of the break in the pipe until January 2005, when water was noted entering the Dryer pond through a culvert that was not shown on the Dryer pond schematic.

The Price River pumphouse was reclaimed in 2004. As described in Sec. 5.26 of the MRP, the foundation of the Price River pumphouse and "pipeline end" was retained for future use. After chasing the source of water flowing into the Dryer pond around for a year, Mr. Collins and I surmise that due to the high water year last year and without active pumping by the COVOL or NEICO operations, the water level in the Price River water well has filled to the level of the "pipeline end" left during reclamation and begun gravity flow and discharge into the Dryer pond.

Final reclamation of the Price River Water Collection well is described in the MRP Sec. 5.42.2, item 2, but this was not done during contemporaneous reclamation of the Pumphouse. R645-301-748 and 765 require that if a water well is exposed during reclamation, it will be closed. Therefore, final sealing of the Price River Water well and the “open ended pipe” must be completed in this next field season.

In the mean time, Mr. Collins will GPS the level of the water in the dryer pond and that of the Price River water well (GG on map E93341); the Price River Water well and the course of the pipeline will be replaced on current Map E9-3341; and a "most likely" explanation of the water source (surface or ground water inflow) to the Dryer pond will be described in the MRP along with an accounting ot the volume of water impounded. The MRP indicates that NEICO owns 10 cfs of Price River water rights for industrial use (Sec. 7.27) and 5.197 cfs ground water rights on the Price River Water Well (Table 7.24-1).

18. Support Facilities, Utility Installations

Mr. Collins received the requested information from NEICO Corporate headquarters yesterday. The information will be provided in the 2005 Annual Report.

19. AVS Check

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Inspection Report

C0070016Permit Number:COMPLETE

Tuesday, March 07, 2006

3/7/2006 1:30:00 PMTuesday, December 06, 2005

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/7/2006 9:30:00 AMStart Date/Time:

Cold rain and snow 32 wind gusting up to 10 mph

Inspector:

Weather:

Joe Helfrich, Environmental Scientist III

whedberg

4/4/2006

Accepted by:

890InspectionID Report Number:

Representatives Present During the Inspection:

Dan Guy Company

Joe Helfrich Environmental Scientist IIIOGM

HC 35 BOX 380, HELPER UT 84526GORDON CREEK 2, 7 & 8 MINES

MOUNTAIN COAL COMOUNTAIN COAL CO

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

179.2734.1534.15

0.73

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Tuesday, March 07, 2006

-The purpose of this site visit was to conduct a complete inspection of the Gordon Creek reclaimed site. As of the date of this inspection the mine remains snowed in. Access was limited to where the county snow plow stopped approximately 100 yards below the three-celled sediment pond. The snow depth was aproximately 24". -There is one amendment pending, the phase II bond release application for the reclaimed site, Task ID #2384.-The amendment has been reviewed by the DOGM staff. The following deficiencies were noted:R645-301-880.120, the Permittee must include in the newspaper advertisement, the type of bond held, and when the Permittee completed seeding.R645-301-880.130, The Permittee must include a notarized statement which certifies that all the applicable reclamation activities have been accomplished in accordance with the requirements of the R645 Rules.R645-301-830, The Permittee must include a map that shows the following so that the Division can determine the amount of bond that is needed to ensure reclamation in the event of bond forfeiture: the reclamation dates and acreages of each reclaimed area, the operation or reclamation status of each area, such as active; temporary cessation; or phase bond release and, areas proposed for bond release. These items were discussed with Mr. Guy during the inspection. There were no compliance issues or off site impacts noted during the inspection.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

1

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Joe Helfrich, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

RECLAIMED PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070016Permit Number:COMPLETETuesday, March 07, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070016Permit Number:COMPLETETuesday, March 07, 2006

Inspection Type:Inspection Date:

The permit for this reclaimed site was renewed effective August 28, 2004 and expires August 30, 2008.

1. Permits, Change, Transfer, Renewal, Sale

Signs with the required information were posted at the entrance to the reclaimed area.

2. Signs and Markers

Pond inspections included the sediment pond and Jacobs pond. The three cells of the sediment pond contained snow from recent storms. Survey results indicated that there was 0.15 acre feet of sediment storage remaining in cell #1 of the sediment pond. The ponds were inspected on 10/25/2005 showing no signs of instability or erosion.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

Hard copies of the 4th quarter 2005 water monitoring data were available for inspection. The fourth quarter data was uploaded into the data base on 12/29/2005. There were no anomalies or parameter exceedances.

4.d Hydrologic Balance: Water Monitoring

DMR"s were current through December of 2005 reflecting no discharge from the three-celled sediment pond.

4.e Hydrologic Balance: Effluent Limitations

The deer and elk that frequent the reclaimed site have migrated to lower elevation areas during the periods of increased snow depths.

9. Protection of Fish, Wildlife and Related Environmental Issues

The access road to the reclaimed site is a county owned and maintained road.

16.b Roads: Drainage Controls

Updates to the ownership and control information will be provided in the 2005 annual report.

19. AVS Check

Liberty Mutual Insurance Company holds the $641,443.00 bond. St. Paul Fire & Marine Insurance Company carries a $500,000 general liability coverage that expires July 31, 2006.

21. Bonding and Insurance

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Inspection Report

C0070018Permit Number:COMPLETE

Friday, March 10, 2006

3/10/2006 3:00:00 PMFriday, January 13, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/10/2006 12:00:00 PMStart Date/Time:

Overcast/Foggy, Temp 32 Deg F

Inspector:

Weather:

Karl Houskeeper, Environmental Scientist III

pgrubaug

3/20/2006

Accepted by:

897InspectionID Report Number:

Representatives Present During the Inspection:

Vicky S. Miller Environmental SpecialistCompany

Karl Houskeeper Environmental Scientist IIIOGM

PO BOX 1029, WELLINGTON UT 84542SOLDIER CANYON MINE

CANYON FUEL COMPANY LLCCANYON FUEL COMPANY LLC

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

6,624.6424.32

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Friday, March 10, 2006

Permit Condition: Canyon Fuel Company has just one permit condition for the Soldier Canyon Mine; to submit water quality data in an electronic format through the Electronic Data Input web site.

Permitting Actions: None

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

49

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Karl Houskeeper, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070018Permit Number:COMPLETEFriday, March 10, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070018Permit Number:COMPLETEFriday, March 10, 2006

Inspection Type:Inspection Date:

The DOGM permit is effective 2/3/2002 and expires 2/3/2007. Other documents include the following:

·Certificate of Insurance issued 07/31/2005 and terminates 07/31/2006.·Reclamation agreement is dated May 9, 2001 and is signed by both parties.·UPDES permit UT0023680 effective 4/01/2001 and expires midnight 3/31/2006.·Air Quality permit DAQE 334-94, issued 04/25/1994.·SPCC Plan dated 12/3/2004.

1. Permits, Change, Transfer, Renewal, Sale

The sediment pond was inspected for fourth quarter 2005 and annual 2005 on 12/27/2005. The report is dated 2/13/2006 and is P.E stamped, dated and signed by a registered P.E. in the State of Utah.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

Fourth quarter 2005 water monitoring is in the EDI website and uploaded. Water monitoring is current.

4.d Hydrologic Balance: Water Monitoring

The latest Discharge Monitoring Report is for January 2006. No discharge occurred.

4.e Hydrologic Balance: Effluent Limitations

The Air Quality Permit DAQE 334-94 issued April 25, 1994 remains in effect.

20. Air Quality Permit

The current Bond is $1,593,000 from St Paul Fire and Marine Insurance Co. Bond No. 400SA1918.

The Insurance is through Ace American Insurance Co. Policy No. HDOG21723198.

21. Bonding and Insurance

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Inspection Report

C0070019Permit Number:COMPLETE

Friday, March 17, 2006

3/17/2006 3:00:00 PMWednesday, February 15, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/17/2006 9:00:00 AMStart Date/Time:

Partly Cloudy, Temp. 45 Deg. F.

Inspector:

Weather:

Karl Houskeeper, Environmental Scientist III

pgrubaug

3/20/2006

Accepted by:

904InspectionID Report Number:

Representatives Present During the Inspection:

Mike W. Glasson Environmental CoordinatorCompany

Karl Houskeeper Environmental Scientist IIIOGM

6750 AIRPORT RD, PO BOX 902 PRICE UT 84501CENTENNIAL MINE

ANDALEX RESOURCES INC TOWER DIVISIONANDALEX RESOURCES INC TOWER DIVISION

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

6,602.0235.27

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Friday, March 17, 2006

The only permit condition currently in place is that the permittee must submit all water monitoring data in an electronic format to the Division's web site.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

49

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Karl Houskeeper, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 4

Inspection Continuation SheetC0070019Permit Number:COMPLETEFriday, March 17, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 4

Inspection Continuation SheetC0070019Permit Number:COMPLETEFriday, March 17, 2006

Inspection Type:Inspection Date:

The only permit condition currently in place is that the permittee must submit all water monitoring data in an electronic format to the Division's web site.

The current DOGM permit was re-issued effective 09/09/2004, to include the incidental boundary change in the Summit Tract, and expires 01/06/2007.

-Certificate of Insurance issued 07/01/2005 and terminates 07/01/2006.-Reclamation agreement dated and signed February 1990 (amended January 2001).-UPDES permit UTG040008 effective 05/01/2003 and expires midnight 04/30/2008.-Air Quality permit DAQE-997-96, issued October 25, 1996.-SPCC Plan dated 08/29/2003.

1. Permits, Change, Transfer, Renewal, Sale

The mine permit ID sign located at the contact point of the public access to the permit area contained the required information. Other signs and markers observed during the inspection met the coal rules.

2. Signs and Markers

The culvert outlet and receiving diversion ditch at the base of the Pinnacle Coal storage pad needs to be cleaned. This culvert and diversion lay near the main bathhouse and the culvert is approximately 1/3 to 1/2 covered with sediment. This culvert outlet was identified on the last inspection, but some confusion on the location existed. This outlet was identified during the inspection and the operator committed to following through on the needed maintenance.

4.a Hydrologic Balance: Diversions

The record review shows that Ponds B, C, and E were inspected on 09/30/2005. The inspection reports show that the ponds are Ok. No hazards or problems were noted as a result of the inspection. The annual and fourth quarter 2005 inspection and certification of the ponds was done by a registered P.E. in Utah on 11/10/2005.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

Fourth quarter 2005 water monitoring information is in the EDI website and uploaded. Water monitoring is current.

4.d Hydrologic Balance: Water Monitoring

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Page 4 of 4

Inspection Continuation SheetC0070019Permit Number:COMPLETEFriday, March 17, 2006

Inspection Type:Inspection Date:

January 2006 discharge monitoring reports were reviewed. Outfalls 001, 002, and 003 did not discharge. Outfall 004 discharged at 432,000 gpd. The daily max is 2000 for TDS. The report showed 6822 TDS or (26) lbs/day. The last inspection report acknowledged the problem from the October 2005 discharge monitoring reports at outfall 004. DEQ is aware of the problem and is looking at making the mine site obtain a site-specific permit and not be on the general permit. The operator and DEQ have had discussion on the TDS standard at present and what a future standard might be based upon the diversion receiving standard. DEQ has done recent testing of the receiving diversion to verify the standard and adjust it as necessary to satisfy the regulations.

4.e Hydrologic Balance: Effluent Limitations

A crew was actively gathering noncoal waste items that are present through the mine site and are now evident from some snow melt.

8. Noncoal Waste

The air quality permit DAQE-997-96 referenced above was issued on October 25, 1996 and remains in effect.

20. Air Quality Permit

The insurance referenced in item #1 above is through Federal Insurance Company, policy #37102594. The insurance has explosion coverage, meets the minimum coverage requirements, lists the Division as the certificate holder, and has the proper language on the notification policy.

Bond No. SU34593 is for $381,839 and Bond No.SU1354086 is for $699,000. Both bonds remain in effect for the term of the permit and are through Utica Mutual Insurance Company.

21. Bonding and Insurance

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Inspection Report

C0070020Permit Number:COMPLETE

Friday, March 24, 2006

3/24/2006 2:00:00 PMFriday, February 24, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/24/2006 10:00:00 AMStart Date/Time:

Cloudy, Temp 52 Deg. F.

Inspector:

Weather:

Karl Houskeeper, Environmental Scientist III

pgrubaug

3/30/2006

Accepted by:

909InspectionID Report Number:

Representatives Present During the Inspection:

Kit Pappas Environmental CoordinatorCompany

Karl Houskeeper Environmental Scientist IIIOGM

3266 S 125 W, PRICE UT 84501HORIZON MINE

HIDDEN SPLENDOR RESOURCES INCHIDDEN SPLENDOR RESOURCES INC

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

1,577.009.50

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Friday, March 24, 2006

Permit Condition #1 states that Hidden Splendor Resources will enter their water monitoring information into the electronic database, EDI. This condition is being met.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

49

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Karl Houskeeper, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070020Permit Number:COMPLETEFriday, March 24, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070020Permit Number:COMPLETEFriday, March 24, 2006

Inspection Type:Inspection Date:

Permit Condition #1 states that Hidden Splendor Resources will enter their water monitoring information into the electronic database, EDI. This condition is being met.

The current DOGM permit C/007/020 was issued effective 07/01/2003 and expires 10/11/2006.

-Certificate of Insurance policy number TBD, issued 09/30/2005 and terminates 09/30/2006.-UPDES permit UTG040000 (General) UTG040019 (Site Specific) effective 05/01/2003 and expires midnight 04/30/2008.-Air Quality permit DAQE-700-70, issued November 7, 2000.-SPCC Plan dated September 2003.

1. Permits, Change, Transfer, Renewal, Sale

The mine ID sign was observed at the point of public access to the mine. The sign contained the name of the mine, permit number, and MSHA number. The sign has been modified to include the address and phone number.

2. Signs and Markers

First quarter 2006 and the annual 2006 pond inspection was conducted on March 13, 2006. The information is contained on a report dated March 13, 2006.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

Fourth quarter 2005 water monitoring is in the EDI website and uploaded. Water monitoring is current.

4.d Hydrologic Balance: Water Monitoring

Outfall 001 did not discharge in February 2006. Outfall 002 discharged in February 2006, but no parameters were exceeded.

4.e Hydrologic Balance: Effluent Limitations

The Air Quality Permit Approval Order DAQE-700-00 was issued on November 7, 2000 and remains in effect.

20. Air Quality Permit

The bond is secured by a letter of credit through Bank One in the amount of $57,000 and collateral to add up to the amount of $342,000. This letter of credit was replaced with a Letter of Credit through Zions Bank.

21. Bonding and Insurance

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Inspection Report

C0070022Permit Number:PARTIAL

Friday, March 31, 2006

3/31/2006 2:05:00 PMFriday, February 24, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/31/2006 12:50:00 PMStart Date/Time:

Overcast; 40's F.

Inspector:

Weather:

Pete Hess, Environmental Scientist III

whedberg

4/5/2006

Accepted by:

915InspectionID Report Number:

Representatives Present During the Inspection:

Pete Hess Environmental Scientist IIIOGM

Dan Guy Company

Boyd Rhodes Company

6340 S 3000 E STE 600, SALT LAKE CITY UT 84121SAVAGE COAL TERMINAL

SAVAGE SERVICES CORPSAVAGE SERVICES CORP

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

160.00122.28

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Monday, April 03, 2006

The Permittee completed submittal of the fourth quarter of 2005 surface water monitoring information to the Division web site on March 31, 2006. This meets the requirement of the Special Permit Condition included in Attachment "A" in the current State permit.

There are no compliance actions currently pending within the Savage Coal Terminal permit area.

It is the Division's understanding that Mr. Mike Kelley has been hired as the wash plant superintendent at the Coal Terminal.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

46

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Pete Hess, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070022Permit Number:PARTIALFriday, March 31, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070022Permit Number:PARTIALFriday, March 31, 2006

Inspection Type:Inspection Date:

The Permittee submitted an application to the Division to permit a new coal stacking tube and conveyor for the stockpile area NE of the truck dump on March 17, 2006. The Division has reviewed the initial application, and has requested additional information. The Permittee has been informed that it will be necessary to amend the current Division of Air Quality Approval Order. This amendment is being prepared by Blackhawk Engineering Company; same will also include a request to increase the throughput for the Coal Terminal facility. The Permittee also intends to install a self-draining concrete pad on the east side of the pump house (located in the NE corner of the permit area) to reduce the amount of mud which is created during the filling process of the water truck. This minor addition will also be included with the Stacking tube/conveyor addition when the additional information is submitted.

1. Permits, Change, Transfer, Renewal, Sale

The Permiitee has contracted a large track hoe to initate cleaning of the site's sediment ponds when material moisture conditions improve.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

The Division notified the Permittee on March 31, 2006 that the fourth quarter of 2005 surface water monitoring requirements had been uploaded to the Division web site, and were considered complete. CV-15-W, which is the UPDES outfall from pond #6 was observed as having no flow this day.

4.d Hydrologic Balance: Water Monitoring

The Permittee is in the process of setting and coupling sections of conveyor structure on the new belt line which is designated as conveyor #12. This conveyor will be 564 feet long when completed and will convey coal from the track loop storage area to conveyors #10 and #11.

18. Support Facilities, Utility Installations

As noted above, the Permittee must amend the current air quality approval order to include the new stacking tube and conveyor 1a addition. An increase in throughput from 8 MTPY to 12 MTPY is also being permitted by Mr. Dan Guy, P.E., of Blackhawk Engineering Company. Submittal of that application to DAQ is pending.

20. Air Quality Permit

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Inspection Report

C0070033Permit Number:PARTIAL

Wednesday, March 15, 2006

3/15/2006 11:40:00 AMMonday, February 13, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/15/2006 10:53:00 AMStart Date/Time:

Overcast / snow flurries / windy and cold

Inspector:

Weather:

Pete Hess, Environmental Scientist III

whedberg

4/4/2006

Accepted by:

900InspectionID Report Number:

Representatives Present During the Inspection:

Pete Hess Environmental Scientist IIIOGM

Scott Dimick SuperintendentCompany

6750 AIRPORT RD, PO BOX 902 PRICE UT 84501WILDCAT LOADOUT

ANDALEX RESOURCES INC TOWER DIVISIONANDALEX RESOURCES INC TOWER DIVISION

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

100.0063.70

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 15, 2006

As noted in section 4d, the Permittee submitted the fourth quarter of 2005 surface water monitoring information to the Division web site on February 3, 2006. This meets the Special Permit Condition included as Attachment "A" of the current State permit.

With the exception of the pending Division Order for this site, there are no compliance actions in place.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

46

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Pete Hess, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070033Permit Number:PARTIALWednesday, March 15, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070033Permit Number:PARTIALWednesday, March 15, 2006

Inspection Type:Inspection Date:

Prior to today's inspection, and based upon the February inspection, the Permittee cleaned all six of the site's sediment ponds. As noted in the 2/13/2006 report, ponds "B", "D" and "F" were more than likely at or over the sixty percent cleanout elevation. The Permittee notified the DOGM on March 11, 2006 that the pond cleanings had been completed. It is Mr. Dan Guy's intent to inspect the cleanout work, as well as re-install the sediment level markers in each of the ponds. P.E. certification of the required pond inspections, which is necessary to meet the requirements of R645-301-514.312 will be completed by Mr. Guy.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

The Permittee has installed new straw bales in the drainage which is east of pond "B" to reduce water borne transport of coal fines outside of the disturbed area. The Permittee had previously submitted a permit amendment to permit this area for additional coal storage. After receiving a deficiency response from the DOGM, the application was pulled. The DOGM now understands that a new application to permit the area for coal storage is in progress. This will require removal of all topsoil as well as vegetation in that area. Clean up of the volume of coal fines in this area will occur at the same time.

4.c Hydrologic Balance: Other Sediment Control Measures

The Permittee notified the DOGM on February 3, 2006 that the fourth quarter of 2005 surface water monitoring information, along with UPDES monitoring information for the Wildcat permit area, was acceptable for uploading to the Division water quality data base. Wildcat Wash was observed to contain frozen compacted snow this day. None of the sites UPDES outfalls were flowing.

4.d Hydrologic Balance: Water Monitoring

End-dumped piles of pond cleanout material were observed on the active lift of the waste rock storage pile. There was not any noncoal waste visible within this material. Leveling and compaction of the material will occur when the material dries.

7. Coal Mine Waste, Refuse Piles, Impoundments

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Inspection Report

C0070034Permit Number:COMPLETE

Friday, March 10, 2006

3/10/2006 12:00:00 PMFriday, January 13, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/10/2006 9:00:00 AMStart Date/Time:

Overcast/Foggy, Temp. 32 Deg. F

Inspector:

Weather:

Karl Houskeeper, Environmental Scientist III

pgrubaug

4/10/2006

Accepted by:

898InspectionID Report Number:

Representatives Present During the Inspection:

Vicky S. Miller Environmental SpecialistCompany

Karl Houskeeper Environmental Scientist IIIOGM

PO BOX 1029, WELLINGTON UT 84542BANNING SIDING LOADOUT

CANYON FUEL COMPANY LLCCANYON FUEL COMPANY LLC

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

36.4221.60

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Friday, March 10, 2006

Permit Condition: Canyon Fuel Company has just one permit condition for the Banning Loadout; to submit water qualitydata in an electronic format through the Electronic Data Input web site.

Permitting Actions: There is one permitting action before the Division for the Banning Loadout; to change the Post-Mining Land Use (PMLU) on a portion of the site.

Violations: None

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

49

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Karl Houskeeper, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070034Permit Number:COMPLETEFriday, March 10, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070034Permit Number:COMPLETEFriday, March 10, 2006

Inspection Type:Inspection Date:

The DOGM permit is effective 10/24/2005 and expires 10/24/2008. Other documents include the following:

·Certificate of Insurance issued 07/31/2005 and terminates 07/31/2006.·Reclamation agreement is dated May 9, 2001 and is signed by both parties.·UPDES permit UTG040000 (site UTG040011) effective 5/01/2003 and expires midnight 4/30/2008.·Air Quality permit 533-6108, issued 07/16/1980.·SPCC Plan dated 12/3/2004.

1. Permits, Change, Transfer, Renewal, Sale

The sediment pond was inspected for fourth quarter 2005 and annual 2005 on 11/17/2005. The report is dated 2/13/2006 and is P.E stamped, dated and signed by a registered P.E. in the State of Utah.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

There is one water monitoring site that is required to be monitored once a year, titled the Truck Dump Sump. This site is separate from the UPDES Permit. This monitoring site is classified as a well. The site was last sampled on 9/20/2005. The information has been submitted and uploaded into the EDI website. Monitoring is current.

4.d Hydrologic Balance: Water Monitoring

The latest Discharge Monitoring Report is for January 2006. No discharge occurred.

4.e Hydrologic Balance: Effluent Limitations

The Air Quality Permit 533-6108 issued July 16, 1980 remains in effect.

20. Air Quality Permit

The current Bond is $350,000 from St Paul Fire and Marine Insurance Co. Bond No. 400SA1916.

The Insurance is through Ace American Insurance Co. Policy No. HDOG21723198.

21. Bonding and Insurance

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Inspection Report

C0070035Permit Number:PARTIAL

Thursday, March 16, 2006

3/16/2006 3:00:00 PMThursday, February 16, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/16/2006 12:00:00 PMStart Date/Time:

Cloudy, Temp. 43 Deg. F.

Inspector:

Weather:

Karl Houskeeper, Environmental Scientist III

pgrubaug

3/20/2006

Accepted by:

903InspectionID Report Number:

Representatives Present During the Inspection:

Rusty Netz Environmental CoordinatorCompany

Karl Houskeeper Environmental Scientist IIIOGM

PO BOX 159, SUNNYSIDE UT 84539SUNNYSIDE REFUSE & SLURRY

SUNNYSIDE COGENERATION ASSOCIATESSUNNYSIDE COGENERATION ASSOCIATES

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

310.00202.00

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Thursday, March 16, 2006

There are no pending compliance actions. The only permit condition currently in place is that the permittee must submit all water monitoring data in an electronic format to the Division's web site. The permittee is complying with this stipulation.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

49

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Karl Houskeeper, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070035Permit Number:PARTIALThursday, March 16, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070035Permit Number:PARTIALThursday, March 16, 2006

Inspection Type:Inspection Date:

There are no pending compliance actions. The only permit condition currently in place is that the permittee must submit all water monitoring data in an electronic format to the Division's web site. The permittee is complying with this stipulation.

1. Permits, Change, Transfer, Renewal, Sale

The sediment ponds were inspected by the operator during the Division Partial Inspection. The majority of the area is snow covered.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

Fourth quarter 2005 water monitoring is in the EDI website and uploaded. Water monitoring is current.

4.d Hydrologic Balance: Water Monitoring

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Inspection Report

C0070038Permit Number:COMPLETE

Thursday, March 16, 2006

3/16/2006 12:30:00 PMWednesday, February 22, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/16/2006 7:30:00 AMStart Date/Time:

Overcast, Windy, 26 F warming to 40 F.

Inspector:

Weather:

Joe Helfrich, Environmental Scientist III

whedberg

4/5/2006

Accepted by:

905InspectionID Report Number:

Representatives Present During the Inspection:

Dennis Ware ControllerCompany

Priscilla Burton Environmental Scientist IIIOGM

Joe Helfrich Environmental Scientist IIIOGM

Wayne Western Environmental Scientist IIIOGM

Dana Dean Environmental Scientist IIIOGM

PO BOX 30, HELPER UT 84526-0030WILLOW CREEK MINE

PLATEAU MINING CORPPLATEAU MINING CORP

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

14,662.49154.05

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Monday, March 20, 2006

The purpose of this site visit was to conduct a complete inspection of the Willow Creek mine site and a Phase I inspection of the Schoolhouse Refuse Canyon and a Phase III inspection of the PRWID industrial post miining land use areas. Ex. 3.4-17 AB incorrectly indicates that the loadout area (1.17 acres) was reclaimed in 2005, this work is scheduled to begin in April 2006. Plate 3.4-17 AB will need to be revised with an accurate reclamation date.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

1

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Joe Helfrich, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 4

Inspection Continuation SheetC0070038Permit Number:COMPLETEThursday, March 16, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 4

Inspection Continuation SheetC0070038Permit Number:COMPLETEThursday, March 16, 2006

Inspection Type:Inspection Date:

Phase 1 bond release of the Schoolhouse Refuse site (45.6 acres) and Phase III bond release of the Price River Water Improvement District (PRWID), 46.2 acres has been reviewed under Task ID #2424. The information was previously reviewed under Task ID #2344. There are 1.2 acres in Barn Canyon that were not disturbed, and therefore not reclaimed, that have been included in the Phase III bond release.

1. Permits, Change, Transfer, Renewal, Sale

Signs with the required information were posted at the entrances to the reclaimed areas.

2. Signs and Markers

Culverts shown on Ex. 3.4-17AB Prep. Plant Area and Refuse Pile As-Built Topography and Treatment Map were checked for accuracy.

4.a Hydrologic Balance: Diversions

The sediment pond 001A was inspected on 8/4/2005 by Lane Jensen from Earthfax Engineering. The structure was stable and showed no signs of weakness or hazards. At the time of this inspection, the pond was dry. The refuse pile was also inspected on 12/15/2005. The structure was stable and showed no signs of weakness or hazards.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

The roughening techniques used during reclamation were functioning adequately and retained snow at the time of this inspection.

4.c Hydrologic Balance: Other Sediment Control Measures

Hard copies of the monitoring data for the fourth quarter of 2005 were available for inspection. The fourth quarter data were uploaded into the database on 11/15/2005. No anomalies or exceedances were noticed in the data.

4.d Hydrologic Balance: Water Monitoring

DMR's were current through February 2006, reporting no discharge.

4.e Hydrologic Balance: Effluent Limitations

The Schoolhouse Refuse Canyon Phase I bond release area boundary was noted and the canyon was walked. No erosion was noted within the main drainage or on the slopes which were stabilized with gouging. The vegetation (grasses and penstamon) in the canyon was heavily grazed. Several deer were seen in the canyon. The ground was frozen. No melting snow or surface water was noted in any of the side drainages constructed in this canyon (CCRD 1 - 5 shown on Ex. 3.4-17 AB) or in the main drainage. The interface between reclaimed and undisturbed land was observed on the south side of the canyon , no erosion at the interface was seen.

7. Coal Mine Waste, Refuse Piles, Impoundments

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Page 4 of 4

Inspection Continuation SheetC0070038Permit Number:COMPLETEThursday, March 16, 2006

Inspection Type:Inspection Date:

Reclamation yet to be accomplished at the loadout area includes, removal and burial of a concrete pad, removal of a bridge and abutments, removal of a 200 gal water tank and removal of belt line hardware from the PRWID site. This 1.17 acre area along the railroad tracks is shown as reclaimed in 2005 on Ex. 3.4-17 AB, but has not yet been completed. This work will be done when the ground thaws, probably in April.

8. Noncoal Waste

Deer and elk have been feeding on the reclaimed school house refuse pile.

9. Protection of Fish, Wildlife and Related Environmental Issues

Reclaimed seeded areas within the PRWID Phase III bond release areas appeared stable: gouges and grass stalks were evident. No erosion was apparent.

12. Backfilling And Grading

The purpose of this site visit was to evaluate the erosion potential of the property being turned over to the Price River Water Improvement district. The reclaimed areas are showing establishment of vegetation. The eastern portion of the property slopes toward the reclaimed roughened area and a well graded rip rapped diversion ditch. Recent snow melt has shown no signs of erosion. The remaining portion of the property slopes to the south west into a portion of the reclaimed area and a well vegetated ditch. Runoff from all locations on this property will remain inside the reclaimed area and does not show signs of developing erosion. The property to be evaluated for erosion potential was walked in it's entirety and photos were taken. The School house refuse pile was reclaimed in 2005 and shows vegetation establishment. The application which includes the refuse pile is has been reviewed for phase I bond release.

13. Revegetation

The mine went onto temporary cessation on December 4, 2000.

15. Cessation of Operations

Support facilities left for PRWID were checked against the As-Built map 3.4-13 AB. A pre-existing road to a water tank was noted on the slopes just south of the mouth of Schoolhouse Canyon. Based upon information provided in Volume 5, Ex. 7, Map 7-1, this tank was pre-existing and not within the disturbed area of the Willow Creek Mine.

18. Support Facilities, Utility Installations

The surety bond is in the amount of $7,866,000 and the liability insurance is current through 7/30/2006.

21. Bonding and Insurance

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Inspection Report

C0070039Permit Number:PARTIAL

Thursday, March 30, 2006

3/30/2006 10:35:00 AMTuesday, February 28, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/30/2006 8:55:00 AMStart Date/Time:

Sunny, clear; cold.

Inspector:

Weather:

Pete Hess, Environmental Scientist III

whedberg

4/4/2006

Accepted by:

914InspectionID Report Number:

Representatives Present During the Inspection:

Pete Hess Environmental Scientist IIIOGM

Vicky S. Miller Environmental SpecialistCompany

PO BOX 1029, WELLINGTON UT 84542DUGOUT CANYON MINE

CANYON FUEL COMPANY LLCCANYON FUEL COMPANY LLC

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

9,471.0057.75

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Friday, March 31, 2006

The Permittee continues to submit quarterly surface and ground water monitoring information in an electronic form to the Division web site as required by the Special Permit Condition included as Attachment "A" of the current State permit. The Division notified the Permittee on January 4, 2006 that all required fourth quarter of 2005 water monitoring data for the permit area had been uploaded to the Division EDI.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

46

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Pete Hess, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 4

Inspection Continuation SheetC0070039Permit Number:PARTIALThursday, March 30, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 4

Inspection Continuation SheetC0070039Permit Number:PARTIALThursday, March 30, 2006

Inspection Type:Inspection Date:

The Permittee has submitted the application to permit degasification wells G-13, G-14, G-15, G-16, and G-17, (Task ID #2456). The Permittee submitted the 2005 Annual Report for the Dugout Canyon Mine on March 14, 2006.

1. Permits, Change, Transfer, Renewal, Sale

The Permittee submitted a berm design for the #2 subsoil pile which is located at the waste rock site this day. Upon Division approval, the design will be implemented. The pile does have a berm around it, but the Permittee's representative was not aware that the berm needed a design to ensure total containment for the 10-year, 24-hour event.

3. Topsoil

The Permittee is preparing to submit an "as-built" for the drop drain inlet located behind the primary electrical substation. The inlet is relative to the undisturbed bypass culvert designated as UC-6.

4.a Hydrologic Balance: Diversions

The water elevation in the Mine site sediment pond appeared to be very close to the discharge level in the primary spillway (vertical stand pipe). The pond is functioning as designed. Mr. Dave Spillman, P.E., has completed the final construction inspection requirement for the Pace Canyon fan portal catch basin; completion and forwarding of that report to the Division as required under R645-301-514.311 is pending.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

The Permittee has completed the first quarter of 2006 water monitoring field requirements for the Dugout Canyon Mine permit area.

4.d Hydrologic Balance: Water Monitoring

The Permittee indicated this day that no mine water is being pumped through outfall 005, located at the Pace Canyon fan portal. No Flow was also observed by Mr. Spillman on the day of his catch basin inspection, (UPDES 006), located in Pace Canyon.

4.e Hydrologic Balance: Effluent Limitations

Ms. Miller indicated that she had recently checked the eagle nesting area which was undermined by the current longwall panel in December of 2005. There was not any major damage noted to the cliff face by the Permittee's representative. The Permittee and the Division of Wildlife Resources will check the area again in the Spring, when closer access is possible.

9. Protection of Fish, Wildlife and Related Environmental Issues

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Page 4 of 4

Inspection Continuation SheetC0070039Permit Number:PARTIALThursday, March 30, 2006

Inspection Type:Inspection Date:

Ms. Miller indicated that the Division and the Permittee have developed a plan to control the proliferation of cheat grass on the Dugout Canyon Mine topsoil piles which are located in Nine Mile Canyon. A test plot (one of the smaller piles) will be tested to determine the effectiveness of this plan.

22. Other

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Inspection Report

C0070041Permit Number:PARTIAL

Wednesday, March 22, 2006

3/22/2006 10:35:00 AMTuesday, February 14, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/22/2006 9:55:00 AMStart Date/Time:

Sunny, some clouds; breezy.

Inspector:

Weather:

Pete Hess, Environmental Scientist III

whedberg

4/4/2006

Accepted by:

908InspectionID Report Number:

Representatives Present During the Inspection:

Pete Hess Environmental Scientist IIIOGM

PO BOX 1077, PRICE UT 84501WEST RIDGE MINE

WEST RIDGE RESOURCESWEST RIDGE RESOURCES

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

6,114.8929.06

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 22, 2006

The Permittee notified the DOGM on March 11, 2006 that the fourth quarter of 2005 surface and ground water monitoring information for the West Ridge Mine was ready for uploading to the Division web site. Thus, the Permittee continues to meet the Special Permit Condition included in Attachment "A" of the current State permit.With the exception of the Division Order relative to the reclamation plan for the portal highwall area, there are no other compliance actions pending.

The Permittee continues to submit weekly monitoring reports for Grassy Trail Dam. As of March 13, 2006, the Panel #7 longwall face was approximately 145 feet outby the dam crest. According to Mr. Dave Shaver, the gob in panel #7 iscaving immediately behind the shields with no tendency to hang. The area is behaving as expected, according to the Permittee.

Mr. James Sorensen, mining engineer, accompanied the Division representative during today's inspection.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

46

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Pete Hess, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070041Permit Number:PARTIALWednesday, March 22, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070041Permit Number:PARTIALWednesday, March 22, 2006

Inspection Type:Inspection Date:

To date, the Permittee has not initiated the replacement of the straw bale dikes in the ditch designated as UD-15, (See Map 7-2, Mine Site Drainage, West Ridge MRP). These were noted in the February report as being heavily laden with sediment, and needing replacement.

4.c Hydrologic Balance: Other Sediment Control Measures

The Permittee's fourth quarter 2006 surface and ground water monitoring information was uploaded to the Division's web site on March 13, 2006.

4.d Hydrologic Balance: Water Monitoring

A golden eagle was observed perched at mile marker 3 along the "C" Canyon County road. Coal trucks were operating on the road.

9. Protection of Fish, Wildlife and Related Environmental Issues

All of the culverts and ditches which were inspected were functioning as designed.

16.b Roads: Drainage Controls

The County has seen several snow storms over the past week; much of the mining equipment / supply area in the upper yard was under snow.

18. Support Facilities, Utility Installations

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Inspection Report

C0070042Permit Number:PARTIAL

Thursday, March 16, 2006

3/16/2006 12:00:00 PMThursday, February 16, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/16/2006 8:00:00 AMStart Date/Time:

Cloudy, Temp. 43 Deg. F.

Inspector:

Weather:

Karl Houskeeper, Environmental Scientist III

pgrubaug

3/20/2006

Accepted by:

902InspectionID Report Number:

Representatives Present During the Inspection:

Rusty Netz Environmental CoordinatorCompany

Karl Houskeeper Environmental Scientist IIIOGM

PO BOX 159, SUNNYSIDE UT 84539STAR POINT REFUSE

SUNNYSIDE COGENERATION ASSOCIATESSUNNYSIDE COGENERATION ASSOCIATES

CARBON

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

152.8188.78

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Thursday, March 16, 2006

Pending actions: No pending actions.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

49

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Karl Houskeeper, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0070042Permit Number:PARTIALThursday, March 16, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0070042Permit Number:PARTIALThursday, March 16, 2006

Inspection Type:Inspection Date:

Pending actions: No pending actions.

1. Permits, Change, Transfer, Renewal, Sale

The mine ID signs are located at the contact points of the public road to the permit area and contains all of the appropriate information. All other signs and markers observed during the inspection were in compliance with the approved MRP.

2. Signs and Markers

The diversions at the mine site are still snow covered.

4.a Hydrologic Balance: Diversions

The sediment ponds are snow covered on the embankments and any water contained in the ponds is frozen. The operator conducted a pond inspection during the Division's Partial Inspection.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

The refuse pile is being mined in lifts form the east side toward the west side of the refuse pile. Drainage from the top of the pile is directed to the drainage culvert located on the southeast side of the pile.

7. Coal Mine Waste, Refuse Piles, Impoundments

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Inspection Report

C0150007Permit Number:COMPLETE

Tuesday, March 14, 2006

3/14/2006 3:00:00 PMTuesday, February 28, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/14/2006 10:00:00 AMStart Date/Time:

Cold, 20's, Windy, 3 inches snow cover

Inspector:

Weather:

Steve Demczak, Environmental Scientist III

pgrubaug

3/20/2006

Accepted by:

901InspectionID Report Number:

Representatives Present During the Inspection:

Russell Hardy Company

Steve Demczak Environmental Scientist IIIOGM

PO BOX 566, SESSER IL 62884HIDDEN VALLEY MINE

CONSOLIDATION COAL COCONSOLIDATION COAL CO MID-CONTINENT REGION

EMERY

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

960.006.706.70

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 15, 2006

Permit last renewed 1/29/2002. The permit area is 960 acres within T. 23 S. R. 6 E. W1/2 Sec 17 and all of Sec. 18. The Permittee's address is listed on the Reclamation Agreement [12755 Olive Blvd. St Louis Mo] has changed. The corporate headquarter's address should read [1800 Washington Rd., Pittsburgh PA]. The Engineering Office for the western operations is in Sesser, IL. Consolidation Coal Co. Board of Directors has authorized an exploratory engineering study at the Hidden Valley reclaimed site. Both portals will be reopened. The exploration will create a stockpile of topsoil, fill, and coal. Plans for site construction and configuration are simultaneously being discussed.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

39

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Steve Demczak, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

RECLAIMED PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0150007Permit Number:COMPLETETuesday, March 14, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0150007Permit Number:COMPLETETuesday, March 14, 2006

Inspection Type:Inspection Date:

The permittee will be submitting a formal major exploration plan to the Division by next week.

1. Permits, Change, Transfer, Renewal, Sale

The area was covered with three inches of snow.

3. Topsoil

No water was flowing during the inspection.

4.a Hydrologic Balance: Diversions

Silt fences were functioning as designed.

4.c Hydrologic Balance: Other Sediment Control Measures

The permittee has to take water samples twice a year for two water sample locations. Consol is required to take samples at upper and lower Ivie Creek during high and low flows. The locations were dry.

4.d Hydrologic Balance: Water Monitoring

The insurance is by Steadfast Inc. Co. This policy will expire on October 5, 2006. The Certificate of Insurance form meets the requirements of the R645 Coal Rules. The bonding amount is $90,758.

21. Bonding and Insurance

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Inspection Report

C0150015Permit Number:PARTIAL

Tuesday, March 07, 2006

3/7/2006 4:00:00 PMWednesday, February 15, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/7/2006 10:00:00 AMStart Date/Time:

Cold, Cloudy, 30's

Inspector:

Weather:

Steve Demczak, Environmental Scientist III

pgrubaug

3/20/2006

Accepted by:

892InspectionID Report Number:

Representatives Present During the Inspection:

Russell Hardy Company

Steve Demczak Environmental Scientist IIIOGM

PO BOX 566, SESSER IL 62884EMERY DEEP MINE

CONSOLIDATION COAL COCONSOLIDATION COAL CO SESSER OPERATIONS

EMERY

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

5,408.00289.60

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 08, 2006

Permit Conditions: Emery Deep has one permit condition. The permittee must submit water quality data in an electronic format through the Electronic Data Input web site.

No violations pending.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

39

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Steve Demczak, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0150015Permit Number:PARTIALTuesday, March 07, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0150015Permit Number:PARTIALTuesday, March 07, 2006

Inspection Type:Inspection Date:

The permittee has plans to submit a major and minor exploration plan to the Division in the near future. Plans will be reviewed in the order received.

1. Permits, Change, Transfer, Renewal, Sale

The topsoil pile at the 4th east portal was inspected with no signs of wind or water erosion.

3. Topsoil

The diversions were spot-checked and were functioning as designed.

4.a Hydrologic Balance: Diversions

The sediment pond was recently cleaned and did not contain any water. The permittee will need to submit as-built drawings to the Division.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

The area was fairly clear of non-coal waste. However, the permittee is beginning to lay belting over the roads. This is improper storage area for materials.

8. Noncoal Waste

The permittee will be continuing the construction of the coal sampler building.

18. Support Facilities, Utility Installations

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Inspection Report

C0150017Permit Number:PARTIAL

Monday, March 06, 2006

3/6/2006 12:45:00 PMWednesday, February 22, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/6/2006 12:00:00 PMStart Date/Time:

Overcast, warm; 40's to 50's F.

Inspector:

Weather:

Pete Hess, Environmental Scientist III

whedberg

4/4/2006

Accepted by:

895InspectionID Report Number:

Representatives Present During the Inspection:

Pete Hess Environmental Scientist IIIOGM

Dennis Oakley Environmental EngineerCompany

PO BOX 310, HUNTINGTON UT 84528DES BEE DOVE MINE

PACIFICORPENERGY WEST MINING CO

EMERY

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

154.8623.88

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Thursday, March 09, 2006

The Permittee completed reclamation of the sediment pond on January 31, 2006.

An inspection of the post-reclamation activities was conducted by the Division's technical staff, as well as representatives of the USDOI/BLM Price Field Office and the State of Utah, School and Institutional Trust Lands Administration, on February 22, 2006.

There have not been any changes in the site conditions since the 2/22 inspection.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

46

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Pete Hess, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

RECLAIMED PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0150017Permit Number:PARTIALMonday, March 06, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0150017Permit Number:PARTIALMonday, March 06, 2006

Inspection Type:Inspection Date:

The Permittee intends to place additional disturbed area perimeter markers about the reclamation disturbance to more accurately define the area. Other signs which are in need of removal (permit boundary markers) have yet to be removed due to frozen soil conditions. The Permittee indicated that the Permittee identification sign which is required under R645-301-521.240 must be viewed by climbing to the top of the bank at the access road reclamation / County road junction in order to view it. The Permittee desires to leave this sign in its current location to minimize vandalism by wanton marksmen.

2. Signs and Markers

Mr. Oakley obtained a water sample of the impounded water in the re-established ephemeral channel; this information will be forwarded to the DOGM with the reclamation "As-Built" information. Inflow / outflow from the depression area was not occurring this day.

4.a Hydrologic Balance: Diversions

As noted in inspection report #876 (2/22/2006), all roads to the sediment pond have been reclaimed, gouged, seeded, and mulched.

16.a Roads: Construction, Maintenance, Surfacing

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Inspection Report

C0150018Permit Number:COMPLETE

Thursday, March 16, 2006

3/16/2006 2:00:00 PMThursday, February 09, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/16/2006 10:00:00 AMStart Date/Time:

Cold, 30's

Inspector:

Weather:

Steve Demczak, Environmental Scientist III

pgrubaug

3/30/2006

Accepted by:

910InspectionID Report Number:

Representatives Present During the Inspection:

Dennis Oakley Environmental EngineerCompany

Steve Demczak Environmental Scientist IIIOGM

PO BOX 310, HUNTINGTON UT 84528DEER CREEK MINE

PACIFICORPENERGY WEST MINING CO

EMERY

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

22,213.7084.34

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Tuesday, March 28, 2006

Permit Conditions:1) During entry development if sustained quantities of groundwater are encountered which are greater than 5 gpm from a single source in an individual entry, and which continue after operational activities progress beyond the area of groundwater production, PacifiCorp must monitor these flows and notify the Division within 24 hours prior to initiation of monitoring.2) Vehicle access will not be allowed in Rilda Canyon from December 1 to April 15 for construction and/or maintenance of the Rilda Canyon Surface Facilities without prior written approval from the Division. This condition is for normal working circumstances and does not apply in an emergency situation.3) PacifiCorp will submit water quality data for the Deer Creek Mine in an electronic format through the EDI web site.-The permittee is meeting these conditions at this time.-Permitting Actions - New Surface Facilities in Rilda Canyon - Mining Plan Approval was issued on December 21, 2005,the state permit was issued on December 1, 2005.-Violations: None

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

39

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Steve Demczak, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 3

Inspection Continuation SheetC0150018Permit Number:COMPLETEThursday, March 16, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 3

Inspection Continuation SheetC0150018Permit Number:COMPLETEThursday, March 16, 2006

Inspection Type:Inspection Date:

The Division tracking system shows that the permittee has submitted an amendment to remove the Gas Well Buffer Zone. The permittee will be submitting a response to the Division's deficiencies to the Notice of Intent to Conduct Exploration.

1. Permits, Change, Transfer, Renewal, Sale

The topsoil pile at the waste rock site was spot-checked and there were no signs of Wind or water erosion.

3. Topsoil

The permittee conducted sediment pond inspection for the fourth quarter of 2005. The report did not indicate any hazardous conditions. This report was P.E. certified. The inspection was taken on December 19, 2005.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

The permittee has submitted the fourth quarter water information to the Division.

4.d Hydrologic Balance: Water Monitoring

The permittee had conducted the fourth quarter refuse inspection on December 21, 2005. The report was P.E. certified. I noticed refuse material along the road to the refuse pile. They have been notified to pick up the material.

7. Coal Mine Waste, Refuse Piles, Impoundments

The mine site was clear of non-coal waste material.

8. Noncoal Waste

This information is in the annual report.

14. Subsidence Control

No new support facilities were constructed since the last inspection.

18. Support Facilities, Utility Installations

The insurance policy will expire on August 28, 2005. Assoc Electric and Gas Ins. Service Ltd is affording insurance coverage.

21. Bonding and Insurance

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Inspection Report

C0150019Permit Number:COMPLETE

Monday, March 06, 2006

3/6/2006 12:00:00 PMWednesday, December 20, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/6/2006 9:50:00 AMStart Date/Time:

Overcast; warm; 40's to 50's F.

Inspector:

Weather:

Pete Hess, Environmental Scientist III

whedberg

4/4/2006

Accepted by:

894InspectionID Report Number:

Representatives Present During the Inspection:

Pete Hess Environmental Scientist IIIOGM

Dennis Oakley Environmental EngineerCompany

PO BOX 310, HUNTINGTON UT 84528COTTONWOOD/ WILBERG

PACIFICORPENERGY WEST MINING CO

EMERY

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

6,886.8862.82

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 08, 2006

It is the Permittee's intent to submit the 4th quarter 2005 surface and ground water monitoring information to the Division water monitoring data base today; this will meet the requirement incuded in Attachment "A", Special Permit Condition, of the current State permit issued by the DOGM. There are no compliance actions currently pending for the Cottonwood/Wilberg Mine permit area.

The site remains under temporary cessation status.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

46

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Pete Hess, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 4

Inspection Continuation SheetC0150019Permit Number:COMPLETEMonday, March 06, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 4

Inspection Continuation SheetC0150019Permit Number:COMPLETEMonday, March 06, 2006

Inspection Type:Inspection Date:

The topsoil storage piles showed no signs of wind or water erosion. Sediment controls about the piles were functioning as designed. All signs were in place and maintained as required.

3. Topsoil

Most of the snow which has accumulated over this winter has melted off, making the site's diversions and sediment control structures capable of being inspected. The ditch across from the bin wall at the truck loading facility which parallels the road and the toe of the cutbank is in need of cleaning. This is a high maintenance item, due to the freeze thaw cycle of the material in the cut slope. Mr. Oakley agreed to clean the ditch when machinery is in the area.

4.a Hydrologic Balance: Diversions

The Permittee's qualified representative, Mr. John Christensen, P.E., conducted the fourth quarter of 2005 impoundment inspections for the North and South ponds as well as the waste rock pond on December 20, 2005. There were no signs of instability or hazardous conditions noted for any of the three impoundments. All ponds had sediment storage capacity remaining from 0.11 AF (waste rock pond) to 0.38 AF (North pond). Mr. Christensen certified the inspection reports on January 6, 2006.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

Discharge monitoring reports for the site for January 2006 were submitted to the required government agencies on February 21, 2006. Outfall 001 was reported as discharging 0.02 mgpd to Cottonwood Creek. There were no parameter exceedances noted.

4.d Hydrologic Balance: Water Monitoring

John Christensen, P.E., inspected the reclaimed waste rock site as well as the active site on December 20, 2006, to complete the 4th quarter inspection requirments for these faclities. There were no signs of instability, or other hazards noted. There were no compliance issues noted at either of the sites this day. Mr. Christensen performed the required quarterly P.E. certification for both waste rock sites on January 6, 2006. Mr. Oakley indicated that the Permittee has completed the ninth year of vegetation monitoring for Phase II bond release for the old waste rock facility.

7. Coal Mine Waste, Refuse Piles, Impoundments

The general liability insurance coverage for the site remains in effect until April 1, 2006.

21. Bonding and Insurance

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Page 4 of 4

Inspection Continuation SheetC0150019Permit Number:COMPLETEMonday, March 06, 2006

Inspection Type:Inspection Date:

It is hoped that the data obtained from mining in close proximity to the Grassy Trail Dam (West Ridge Mine / Andalex Resources) will be useful in developing a mining plan for the SITLA Cottonwood Tract, which is associated with the Joe's Valley Dam.

22. Other

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Inspection Report

C0150025Permit Number:COMPLETE

Tuesday, March 14, 2006

3/14/2006 2:00:00 PMTuesday, February 07, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/14/2006 12:00:00 PMStart Date/Time:

Sunny, cold; 30's F. Some clouds.

Inspector:

Weather:

Pete Hess, Environmental Scientist III

whedberg

4/5/2006

Accepted by:

899InspectionID Report Number:

Representatives Present During the Inspection:

Pete Hess Environmental Scientist IIIOGM

Mark Reynolds Resident AgentCompany

PO BOX 1245, HUNTINGTON UT 84528BEAR CANYON MINE

CO-OP MINING COCO-OP MINING CO

EMERY

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

4,416.1840.46

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 15, 2006

The Bear Canyon Mines received a fresh snow accumulation between Wednesday 3/8 and Sunday 3/12. The accumulation had compacted to approximately five inches by today's inspection.

The Division notified the Permittee on March 13, 2006 that all required surface and ground water monitoring site information with the required parameters for the fourth quarter of 2005 had been uploaded to the Division web site. Thus, the Special Permit Condition which is contained in Attachment "A" of the current State permit relative to water monitoring data continues to be met. Other permit conditions which are contained within Attachment "A" are relative to leasing/DOI approvals in the Wild Horse Ridge area, or ground water transfers in the #1 Mine, which has been sealed. These two conditions are no longer pertinent.

All production is now coming from the #4 Mine. There are no compliance actions currently pending for the Bear Canyon Mines permit area.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

46

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Pete Hess, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 4

Inspection Continuation SheetC0150025Permit Number:COMPLETETuesday, March 14, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 4

Inspection Continuation SheetC0150025Permit Number:COMPLETETuesday, March 14, 2006

Inspection Type:Inspection Date:

Mr. Reynolds indicated this day that it is the Permittee's intent to request a time extension in order to respond to the deficiencies aired by the Division relative to the Lease Addition (Task ID #2292) application. The current due date is March 15, 2006. The Permittee is intending to submit a permit amendment application to expand the truck loading facilities such that two loading lanes can operate simultaneously. This will involve removing the outslope of the coal storage pad by installing a retaining wall; the soil which is removed will be stored.

1. Permits, Change, Transfer, Renewal, Sale

All ditches in the Wild Horse Ridge area were buried under snow. The ditches in the truck loading and tipple area were functioning as designed. The Permittee has completed the removal of all of the culvert sections designated as C-1U, (up Canyon of the old electrical substation, see Plate 7-1C), installing a reclamation channel through this previously filled area.

4.a Hydrologic Balance: Diversions

Ponds A, B, and D all had frozen surfaces. Pond C's bottom was snow covered. The Permittee conducted the fourth quarter and annual impoundment inspections for 2005 for the sites four sediment ponds and three catch basins on November 15, 2005. Mr. Mark Reynolds, Utah registered professional engineer, conducted the inspections, and performed the required P.E. certifications on the same day. There were no signs of instability or other hazards noted by Mr. Reynolds inspection. The cleanout of pond "A" had just been completed, and this inspection also served as the inspection required under R645-301-514.312, I.e., that the pond has been maintained as designed. The cleaning of pond "B" was initiated by the Permittee in the fall of 2005; other projects took priority and the cleanout was never completed. Mr. Reynolds indicated that this job would be completed in the summer of 2006. The site's three catch basins in the Wild Horse Ridge area were also inspected by Mr. Reynolds. There were no compliance issues noted with any of the sediment containments this day.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

All of the site's silt fences or straw bale filtration structures were either partially or completely buried, rendering them incapable of being inspected.

4.c Hydrologic Balance: Other Sediment Control Measures

Bear Creek was observed to be flowing this day, although most of this channel remains covered with ice and/or snow. The Permittee has submitted all fourth quarter 2005 surface and ground water information as noted above.

4.d Hydrologic Balance: Water Monitoring

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Page 4 of 4

Inspection Continuation SheetC0150025Permit Number:COMPLETETuesday, March 14, 2006

Inspection Type:Inspection Date:

Reclamation of the road accessing the sealed #2 Mine has been completed back to the old electrical substation. Part of the coal conveyance system exiting the #1 Mine Blind Canyon seam belt portal has been demolished. It is the Permittee's intent to eventually reclaim all of the conveyors (this will include the Hiawatha belt portal) and the coal bin from this area down to the tipple. The Permittee is in the process of evaluating the need to re-route the drainage from watershed AU-5 (See Plate 7-1C in MRP) to Bear Creek via a large ditch, which will be installed to the lower Canyon via the route currently taken by the #1 Mine access road. The Permittee is concerned that the AU-5 runoff may be sufficient to damage the tipple, which is located SE of this watershed.

11. Contemporaneous Reclamation

As noted above, the Permittee has reclaimed the #2 Mine access road back to the road curve where the now out-of-service electrical substation is located. The area was under frozen snow, and too dangerous to walk over to examine this day. Also, the Permittee has re-shaped about 125 feet of the northern end of the storage pad where the Blind Canyon intake portal was located. This entry has been sealed and partially backfilled for some time.

12. Backfilling And Grading

Mr. Reynolds indicated this day that the 2005 Annual Reports for the Bear Canyon Mines permit area are nearly complete, in preparation for submittal to the DOGM. This report will contain the 2005 subsidence monitoring information.

14. Subsidence Control

It will be necessary for the Permittee to modify several of the truck loading conveyors in order to install a dual-loading lane system. See comments under Section 1.

18. Support Facilities, Utility Installations

The Division asked the Permittee to update the Reclamation Agreement for the Bear Canyon Mines permit area on February 2, 2006. The revisions necessary include an update of the disturbed area acreage, as well as updated Affidavits of Qualification. Exhibit D must be updated to document these revisions. The Division has also asked the Permittee to make a correction to the Certificate of Liability insurance relative to coverage for the use of explosives. The current policy states that coverage is provided for "explosion". Mr. Reynolds indicated that he is currently working with the Company's insurance provider to make this correction.

21. Bonding and Insurance

The Permittee has repaired the corner of the scale house pad where erosion was occurring. The area has received some fill, and rock to stabilize it. However, foot traffic through here remains evident.

22. Other

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Inspection Report

C0150032Permit Number:COMPLETE

Wednesday, March 08, 2006

3/8/2006 1:00:00 PMWednesday, February 08, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/8/2006 9:00:00 AMStart Date/Time:

Clear, Temp 34 Deg. F

Inspector:

Weather:

Karl Houskeeper, Environmental Scientist III

pgrubaug

3/20/2006

Accepted by:

893InspectionID Report Number:

Representatives Present During the Inspection:

Gary E. Gray Resident AgentCompany

Karl Houskeeper Environmental Scientist IIIOGM

PO BOX 1077, PRICE UT 84501CRANDALL CANYON MINE

GENWAL RESOURCES INCGENWAL RESOURCES INC

EMERY

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

6,235.8010.70

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 08, 2006

Pending Amendments: There are no pending permit amendments.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

49

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Karl Houskeeper, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 4

Inspection Continuation SheetC0150032Permit Number:COMPLETEWednesday, March 08, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 4

Inspection Continuation SheetC0150032Permit Number:COMPLETEWednesday, March 08, 2006

Inspection Type:Inspection Date:

The DOGM permit is effective 05/10/2005 and expires 05/13/2008. Other documents include the following:

·Certificate of Insurance issued 07/01/2005 and terminates 07/01/2006.·Reclamation agreement is dated April 1998 and is signed by both parties.·UPDES permit UT000024368 effective 12/01/2005 and expires midnight 11/30/2008.·Air Quality permit DAQE-AN0225003-03, issued 03/20/2003.·SPCC Plan dated 09/18/2004.

1. Permits, Change, Transfer, Renewal, Sale

The Mine ID sign is posted at the entrance to the permit area from the forest service road. The sign contains the name, permit ID #, address, and phone number of the operator. All other signs and markers observed during the inspection met the coal rules.

2. Signs and Markers

The diversion behind the crusher building needs to be cleaned. The operator made note of the needed maintenance.

4.a Hydrologic Balance: Diversions

The annual inspection was conducted on 12/15/05 and a report was P.E. certified on 3/07/06. The 60% clean elevation is listed at 7769.0. The average sediment level on the date of the inspection was 7769.0. The pond needs to be cleaned. The operator is scheduling the pond cleaning with contractors for the spring of 2006.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

Fourth quarter 2005 water monitoring is in the EDI website, but has not been uploaded. Water monitoring is current.

4.d Hydrologic Balance: Water Monitoring

January 2006 discharge monitoring reports were reviewed and no parameters were exceeded.

4.e Hydrologic Balance: Effluent Limitations

Approval Order DAQE-827-01 was modified on March 20, 2003. This modification allowed additional coal handling equipment (conveyors) for the South Crandall Portals. The new approval order, DAQE-AN0225003-03, was effective March 20, 2003.

20. Air Quality Permit

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Page 4 of 4

Inspection Continuation SheetC0150032Permit Number:COMPLETEWednesday, March 08, 2006

Inspection Type:Inspection Date:

Insurance is provided through Federal Insurance Co. policy #3710-95-29. The policy meets the minimum coverage requirements, has explosion coverage, contains the proper language in the notification clause, and shows the State of Utah as the certificate holder.

The bonded amount for the Crandall Canyon Mine is $1,654,000, bond #14-96-15.

21. Bonding and Insurance

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Inspection Report

C0410002Permit Number:COMPLETE

Tuesday, March 07, 2006

3/7/2006 1:05:00 PMThursday, February 09, 2006

Inspection Type:Inspection Date:

End Date/Time:Last Inspection:

3/7/2006 9:10:00 AMStart Date/Time:

Sunny; some clouds, mild breezes. Flurries.

Inspector:

Weather:

Pete Hess, Environmental Scientist III

whedberg

4/4/2006

Accepted by:

891InspectionID Report Number:

Representatives Present During the Inspection:

Pete Hess Environmental Scientist IIIOGM

Mike Davis Company

397 S 800 W, SALINA UT 84654SUFCO MINE

CANYON FUEL COMPANY LLCCANYON FUEL COMPANY LLC

SEVIER

Site:

County:

Permitee:Operator:

Address:

Underground

Surface

Loadout

Processing

Reprocessing

26,766.9527.36

Current Acreages

Total PermittedTotal Disturbed

Phase IPhase IIPhase III

Wednesday, March 08, 2006

The Permittee is currently inserting surface and ground water monitoring information for the SUFCO Mine permit area into the Division "pipeline" for the fourth quarter of 2005. This is the preliminary step prior to Permittee approval of all information, which results in the uploading of this information to the Division web site. Uploading of the information is the final step in meeting the Permittee's responsibility mandated in the Special Permit Condition included as Attachment"A" of the current State permit.

There are no compliance actions curently pending for the SUFCO Mine permit area.

The Division approved the SITLA Muddy Tract lease amendment for incorporation into the SUFCO Mine permit area on January 20, 2006.

The Division is currently reviewing a minor coal exploration application for two holes in the SITLA Muddy Tract area. The USFS is the SMA, and NEPA will be conducted by that agency.

Report summary and status for pending enforcement actions, permit conditions, Division Orders, and amendments:

Date

46

Inspector's Signature:

Note: This inspection report does not constitute an affidavit of compliance with the regulatory program of the Division of Oil, Gas and Mining.

Pete Hess, Environmental Scientist III

Federal

State

County

Fee

Other

Mineral Ownership Types of Operations

ACTIVE PERMANENT COAL PROGRAMPermit Type:

Permit Status:

Inspector ID Number:

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Page 2 of 5

Inspection Continuation SheetC0410002Permit Number:COMPLETETuesday, March 07, 2006

Inspection Type:Inspection Date:

REVIEW OF PERMIT, PERFORMANCE STANDARDS PERMIT CONDITION REQUIREMENTS

1. Substantiate the elements on this inspection by checking the appropriate performance standard. a. For COMPLETE inspections provide narrative justification for any elements not fully inspected unless element is not appropriate to the site, in which case check Not Applicable. b. For PARTIAL inspections check only the elements evaluated.2. Document any noncompliance situation by reference the NOV issued at the appropriate performance standard listed below.3. Reference any narratives written in conjunction with this inspection at the appropriate performace standard listed below.4. Provide a brief status report for all pending enforcement actions, permit conditions, Divison Orders, and amendments.

CommentEvaluated Not Applicable Enforcement

1. Permits, Change, Transfer, Renewal, Sale

2. Signs and Markers

3. Topsoil

4.a Hydrologic Balance: Diversions

4.b Hydrologic Balance: Sediment Ponds and Impoundments

4.c Hydrologic Balance: Other Sediment Control Measures

4.d Hydrologic Balance: Water Monitoring

4.e Hydrologic Balance: Effluent Limitations

5. Explosives

6. Disposal of Excess Spoil, Fills, Benches

7. Coal Mine Waste, Refuse Piles, Impoundments

8. Noncoal Waste

9. Protection of Fish, Wildlife and Related Environmental Issues

10. Slides and Other Damage

11. Contemporaneous Reclamation

12. Backfilling And Grading

13. Revegetation

14. Subsidence Control

15. Cessation of Operations

16.a Roads: Construction, Maintenance, Surfacing

16.b Roads: Drainage Controls

17. Other Transportation Facilities

18. Support Facilities, Utility Installations

19. AVS Check

20. Air Quality Permit

21. Bonding and Insurance

22. Other

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Page 3 of 5

Inspection Continuation SheetC0410002Permit Number:COMPLETETuesday, March 07, 2006

Inspection Type:Inspection Date:

The Permittee recently finalized the mid-term permit review for the current State permit. The Special Use Permit which is issued by the USFS for the mine site sediment pond area has been renewed through that agency; same will now expire on December 31, 2015. The current UPDES permit for the SUFCO Mine outfalls will expire on April 30, 2006. Mr. Davis is currently working on the renewal application for this DEQ permit. The UPDES storm water discharge permit for the SUFCO Mine expires on December 31, 2006.

1. Permits, Change, Transfer, Renewal, Sale

Mr. John Byers, Utah registered P.E., conducted the fourth quarter and annual 2005 impoundment inspections for the Mine site sediment pond and the waste rock pond/decant pond on October 6, 2005. Mr. Byars' inspection did not note any signs of structural weakness or other hazards for these impoundments. The sediment level in the Mine site pond was noted as being 0.13 feet above the sixty percent cleanout elevation. The Permittee has scheduled the cleaning of this pond for June or July, or as soon as ground conditions improve to the point that machinery access to the pond is safe. Mr. Byars certified the annual inspection reports for these ponds on October 21, 2005.

4.b Hydrologic Balance: Sediment Ponds and Impoundments

As noted under section (1), the current UPDES permit for the SUFCO Mine will expire in April. The Permittee is working on the renewal application for submittal to Utah DEQ/DWQ.

4.e Hydrologic Balance: Effluent Limitations

There has not been any recent activity at the road side waste rock site. The current lift is nearly to capacity. Mr. Davis indicated that it will be necessary to move the topsoil pile located NE of the County road pad prior to expanding the storage volume into the next lift. The Permittee may want to evaluate the need to permit another disposal site for the remaining life of the SUFCO Mine. It was noted that a large volume of coal mine waste material had been placed in the approved temporary waste storage area at the Mine site. Ground conditions at the final disposal area will have to improve before hauling into this area can resume. Mr. Byers, (P.E.) conducted the fourth quarter 2005 waste rock pile inspection on October 6, 2005, noting no signs of instability, structural weakness, or other hazards. Minor erosion was noted in the Permittee's inspection report as existing on the SE slope. This will be repaired as soon as ground conditions allow access. P.E. certification of the report was completed by Mr. Byars on October 21, 2005. Revegetation of the reclaimed lifts has seen great success.

7. Coal Mine Waste, Refuse Piles, Impoundments

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Page 4 of 5

Inspection Continuation SheetC0410002Permit Number:COMPLETETuesday, March 07, 2006

Inspection Type:Inspection Date:

The ditch which parallels the access road to the Mine site sediment pond was noted by Mr. Byars as needing work during the fourth quarter 2005 mine site pond inspection. This will be done after pond cleanout is completed, upon retreat of the machinery.

16.b Roads: Drainage Controls

The Permittee has completed the concrete pad necessary to install the water chlorinator adjacent to the 300,000 gallon water tank located on the hillside east of the main facilities area. Electricians were busy this day wiring this installation. The re-location of a transformer to power this unit is pending. Following re-location of this, a small building will be constructed around the transformer. It must be noted that all of these facilities have been previously approved/permitted through the Division. Removal of the hillside substation has made it necessary to relocate some facilities for an improvement in operation. The Permittee intends to re-gravel the access road, restore the safety berm and roadside drainage, and complete the grading/earthwork. A new "as-built" of this area will be completed when construction activities have been finalized.

18. Support Facilities, Utility Installations

The Permittee submitted an application to the DOGM on February 1, 2006 to update Chapter 1, Ownership and Control information for all of the Utah Canyon Fuel operations, (Task ID #2425). Review of this application is pending.

19. AVS Check

The Permittee was watering the paved road surface area of the truck loading/scales building during today's inspection.

20. Air Quality Permit

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Page 5 of 5

Inspection Continuation SheetC0410002Permit Number:COMPLETETuesday, March 07, 2006

Inspection Type:Inspection Date:

The current general liability insurance form which the Permittee retains at the Mine site for inspection purposes indicates that the liability coverage includes "XCU". Nothing within, or attached to that document could verify that "XCU" provided for coverage "including the use of explosives" as required in R645-301-890.100. Mr. Davis telephoned on this to confirm that the acronym "XCU" still has the same meaning as has been used in the past. This was confirmed. However, the Division asked that the new insurance coverage (which is due July 31, 2006) specifically state that the general liability coverage state that coverage is provided for "damages incurred from the use of explosives". The ARCH Coal representative agreed to do this for the policy renewal. The current reclamation agreement between the Permittee and the DOGM was last updated in May of 2001. It was noted that both signatory authorities for this document (the Permittee's and the Division's) have since retired. The listed disturbed area acreage appears to be accurate. Mr. Davis indicated on 3/8 that the Permittee was interested in revising the current reclamation bond amount in this document, which was reviewed and approved by the Division during the recent mid-term permit review process. The Division asked the Permittee to update the Reclamation Agreement during today's inspection.

21. Bonding and Insurance

Mr. Davis indicated that the 2005 annual reports for the SUFCO Mine will be ready in another week or two, meeting the deadline which has been established by the DOGM as March 31, 2006.

22. Other

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March 17, 2006 CERTIFIED RETURN RECEIPT 7004 2510 0004 1824 2550 John A. Gefferth, Environmental Engineer Consolidation Coal Company P.O. Box 566 Sesser, Illinois 62884 Subject: Proposed Assessment for State Violation No. N06-39-2-1,

Consolidation Coal Company, Emery Deep Mine, C/015/0015, Outgoing File

Dear Mr. Gefferth:

The undersigned has been appointed by the Division of Oil, Gas & Mining as the Assessment Officer for assessing penalties under R645-401.

Enclosed is the proposed civil penalty assessment for the above referenced violation. The violation was issued by Division Inspector, Stephen Demczak, on February 16, 2006. Rule R645-401-600 et. seq. has been utilized to formulate the proposed penalty. By these rules, any written information that was submitted by you or your agent within fifteen (15) days of receipt of this Notice of Violation has been considered in determining the facts surrounding the violation and the amount of penalty.

Under R645-401-700, there are two informal appeal options available to you:

1. If you wish to informally appeal the fact of this violation, you should file a written request for an Informal Conference within thirty (30) days of receipt of this letter. This conference will be conducted by the Division Director. This Informal Conference is distinct from the Assessment Conference regarding the proposed penalty.

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Page 2 John Gefferth N06-39-2-1 C/015/0015 March 17, 2006

2. If you wish to review the proposed penalty assessment, you should file a written request for an Assessment Conference within thirty (30) days of receipt of this letter. If you are also requesting a review of the fact of violation, as noted in paragraph 1, the Assessment Conference will be scheduled immediately following that review.

If a timely request for review is not made, the fact of violation will

stand, the proposed penalty will become final, and the penalty will be due and payable within thirty (30) days of the proposed assessment. Please remit payment to the Division, mail c/o Vickie Southwick.

Sincerely,

Daron R. Haddock Assessment Officer

sd Enclosure cc: OSM Compliance Report

Vickie Southwick, DOGM Price Field Office

O:\015015.EME\Compliance\2006\N06-39-2-1ProAssess&Ltr.doc

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WORKSHEET FOR ASSESSMENT OF PENALTIES DIVISION OF OIL, GAS & MINING

COMPANY/MINE Consolidation Coal Company/ Emery Deep Mine PERMIT C/015/015 NOV/CO # N06-39-2-1 VIOLATION 1 of 1 ASSESSMENT DATE March 17, 2006 ASSESSMENT OFFICER Daron R. Haddock I. HISTORY (Max. 25 pts.)

A. Are there previous violations, which are not pending or vacated, which fall one (1) year of today=s date?

PREVIOUS VIOLATIONS EFFECTIVE DATE POINTS

None

1 point for each past violation, up to one (1) year 5 points for each past violation in a CO, up to one (1) year No pending notices shall be counted

TOTAL HISTORY POINTS 0

II. SERIOUSNESS (Either A or B)

NOTE: For assignment of points in Parts II and III, the following apply:

1. Based on facts supplied by the inspector, the Assessment Officer will determine within each category where the violation falls.

2. Beginning at the mid-point of the category, the Assessment Officer will

adjust the points up or down, utilizing the inspector=s and operator=s statements as guiding documents.

Is this an EVENT (A) or HINDRANCE (B) violation? Event (A)

A. EVENT VIOLATION (Max 45 pts.)

1. What is the event which the violated standard was designed to prevent?

2. What is the probability of the occurrence of the event which a violated

standard was designed to prevent?

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PROBABILITY RANGE None 0 Unlikely 1-9 Likely 10-19 Occurred 20

ASSIGN PROBABILITY OF OCCURRENCE POINTS 20

PROVIDE AN EXPLANATION OF POINTS: ***The permittee is in the process of constructing facilities without having prior Division approval. Concrete footers, floor and building frame are constructed and two beltlines are installed. The event has actually occurred.

3. What is the extent of actual or potential damage? RANGE 0-25

In assigning points, consider the duration and extent of said damage or impact, in terms of area and impact on the public or environment.

ASSIGN DAMAGE POINTS 0

PROVIDE AN EXPLANATION OF POINTS: ***No damage occurred since the construction was done on previously disturbed area. There is only potential for damage if the construction does not get reclaimed.

B. HINDRANCE VIOLATION (Max 25 pts.)

1. Is this a POTENTIAL or ACTUAL hindrance to enforcement? 0 RANGE 0-25

Assign points based on the extent to which enforcement is actually or potentially hindered by the violation.

ASSIGN HINDRANCE POINTS 0

PROVIDE AN EXPLANATION OF POINTS: ***NA.

TOTAL SERIOUSNESS POINTS ( A or B ) 20 III. NEGLIGENCE (Max 30 pts.)

A. Was this an inadvertent violation, which was unavoidable by the exercise of reasonable care? IF SO--NO NEGLIGENCE; or, was this a failure of a permittee to prevent the occurrence of a violation due to indifference lack of diligence, or lack of reasonable care, or the failure to abate any violation due to the same? IF SO--GREATER DEGREE OF FAULT THAN NEGLIGENCE.

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No Negligence 0 Negligence 1-15 Greater Degree of Fault 16-30

STATE DEGREE OF NEGLIGENCE Negligence

ASSIGN NEGLIGENCE POINTS 8

PROVIDE AN EXPLANATION OF POINTS: ***The Permittee should have been aware that these activities required Division approval prior to their construction. A prudent operator would understand the need to gain approval for revised facilities prior to continued disturbance of an area. It appears that the Operator chose to ignore the rules or was indifferent to the rules. This indicates negligence and points are assessed in the mid part of the negligence range. IV. GOOD FAITH (Max 20 pts.)

(Either A or B) (Does not apply to violations requiring no abatement measures)

A. Did the operator have onsite, the resources necessary to achieve compliance of the

violated standard within the permit area? IF SO--EASY ABATEMENT

Easy Abatement Situation

C Immediate Compliance -11 to -20* (Immediately following the issuance of the NOV)

C Rapid Compliance -1 to -10 (Permittee used diligence to abate the violation)

C Normal Compliance 0 (Operator complied within the abatement period required) (Operator complied with condition and/or terms of approved Mining and Reclamation Plan)

*Assign in upper of lower half of range depending on abatement occurring the 1st or 2nd half of abatement period.

B. Did the permittee not have the resources at hand to achieve compliance, or does

the situation require the submission of plans prior to physical activity to achieve compliance?

IF SO--DIFFICULT ABATEMENT

Difficult Abatement Situation C Rapid Compliance -11 to -20*

(Permittee used diligence to abate the violation)

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C Normal Compliance -1 to -10* (Operator complied within the abatement period required)

C Extended Compliance 0 (Permittee took minimal actions for abatement to stay within the limits of the NOV or the violated standard of the plan submitted for abatement was incomplete) (Permittee complied with conditions and/or terms of approved Mining and Reclamation Plan)

EASY OR DIFFICULT ABATEMENT? Difficult

ASSIGN GOOD FAITH POINTS 0

PROVIDE AN EXPLANATION OF POINTS: ***The abatement has not yet been completed, so good faith points cannot be awarded at this time. This category will be looked at again after the abatement has been completed. Points will be awarded depending on how quickly the abatement is met. V. ASSESSMENT SUMMARY

NOTICE OF VIOLATION # N06-39-2-1 I. TOTAL HISTORY POINTS 0 II. TOTAL SERIOUSNESS POINTS 20 III. TOTAL NEGLIGENCE POINTS 8 IV. TOTAL GOOD FAITH POINTS 0

TOTAL ASSESSED POINTS 28

TOTAL ASSESSED FINE $880.00

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February 23,2006

Division of Oil, Gas, and MiningCoal Program1594 West North Temple, Suite l2I0P.O. Box 145801

- .t ./

Salt Lake city, utah 84114-580 t 4/t1i 1<:o77

- '+ 'L%rcl

Subj Reouest for an Informal Hearing to Aopeal Notice of Violation N06-39-1-1. Pacifi6om. A

Energy West Mining Company. Deer Creek Mine. C/015/018. Emery Countlz. Utah

PacifiCorp, by and through its wholly-owned subsidiary, Energy West Mining Company (EnergyWest), hereby requests an informal public hearing to discuss the Notice of Violation that wasserved by the Division by mail on February 8, 2006.

The nature of the violation stemmed from the fact that the permittee failed to submit all requiredwater quality information for the 3'd quarter of 2005 using the Division's web site within 90 daysafter the previous quarter. Five (5) sites were not available in the electronic water database: TW-10, HCC02, HCC04, DCWRI, and MFR-10. However, Energy West feels that there areinefficiencies in the processes that both the permittee and the Division follow that causesunnecessary violations to the R645 Coal Regulations.

Energy West will submit oral and written arguments and any other relevant information to theviolation during the process of the informal public hearing. If you have any questions conceringthis request, please contact me anytime at (435) 687-4720.

'/""' i

T\"^'"tr' \V \.,,\'* )\ d*(1.

Chu-ck SemborskiGeology and Permitting Manager

Doug Johnson (EWMC)Scott Child (nvIC)

FEB 2 7 2006

Huntington Office:(435) 687-e821

Fax (435) 687-269sPurchasing Fax (435) 687-9092

Deer Creek Mine:(435) 687-2317

Fax (435) 687-228s

Trail Mountain Mine:(435) 748-2140

Fax (435) 748-5125

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' 0010

cc: Karl Houskeeper, UDOGMKarla Knoop, JBR, w/encl.Erik Petersen, Petersen Hydrologic, dencl.Dan Guy. Blackhawk. w/encl.

' t ( i>r11v\q

nv

cfr'-z/ortcc: l\ro*A"",,

fr\ U

[ ) a ^ c 4 _

; , ' , ' r

l/ rCK,.e 3o.. lh,^,rir tq

RECEIVEDMAR 0 | 2006

DIV OF O'1, GAS & MINING

ffi ANDALEXRESOURCES, INC.

PO. BOX 902PRICE, UTAH 8450IPHONE (435) 637-5385FAX (4s5) 637-8860

Fehruarv 27 .2006

BY CERTIFIED MAIL

Utah Division of Oil, Gas & MiningCoal Program1594 West North Temple, Suite l2l0Box 145801Salt Lake City, Utah 841 14-5801

Attn: Daron HaddockAssessment Officer

Re: Proposed Assessment State Violation No. N06-49- 1 - 1 , Centennial, C007 lAI9 .

Dear Mr. Haddock"

ANDALEX Resources respectfully requests that an informal conference be held with respectto the above referenced violation. We believe the fact of the violation is partially in error and wewould appreciate the opportunity to discuss our reasons. We also believe that due in part that the factof the violation may be in error, and also in part that ANDALEX has made diligent efforts to correctthe issues which could be corrected, that the proposed penalty assessment should be reviewed.

ANDALEX appreciates the opportunity to discuss both of these items with the Division atan informal conference to be scheduled bv you. Thank you.

Sincerelv.

4r"lMichael W. GlassonSenior Geologist

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State of Utah

Department of Natural Resources

MICHAEL R. STYLER Executive Director

Division of Oil, Gas & Mining

JOHN R. BAZA Division Director

1594 West North Temple, Suite 1210, PO Box 145801, Salt Lake City, UT 84114-5801 telephone (801) 538-5340 • facsimile (801) 359-3940 • TTY (801) 538-7458 • www.ogm.utah.gov

JON M. HUNTSMAN, JR. Governor

GARY R. HERBERT Lieutenant Governor

March 17, 2006

CERTIFIED MAIL 7099 3400 0016 8894 6260 Chuck Semborski Energy West Mining Company P.O. Box 310 Huntington, Utah 84528 Subject: Informal Conference on the Fact of Violation and Proposed Assessment

State Notice of Violation N06-39-1-1, Pacific Corporation, Energy West Mining Company, C/015/018

Dear Mr. Semborski: In accordance with R645-401-700 and your request dated February 23, 2006 please be advised that an informal conference on the Fact of Violation for Notice of Violation N06-39-1-1, Energy West Mining Corporation has been established for Tuesday, March 28, 2006, beginning at 10:00am. This informal conference is to review the Fact of the Violation and review the proposed penalty assessment. Pertinent, written material you wish reviewed before the conference can be forwarded to Mary Ann Wright, Associate Director, Mining and Assessment Conference Officer, at the address listed below. The conference will be held in the office of the Department of Natural Resources, Conference Room A. Please check in at the DNR front desk and then proceed to the conference room. Sincerely, Vickie Southwick Executive Secretary vs cc: Mary Ann Wright Daron Haddock H:\Assessment confenence\Energy West Mine\Energy West CO.doc

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State of Utah

Department of Natural Resources

MICHAEL R. STYLER Executive Director

Division of Oil, Gas & Mining

JOHN R. BAZA Division Director

1594 West North Temple, Suite 1210, PO Box 145801, Salt Lake City, UT 84114-5801 telephone (801) 538-5340 • facsimile (801) 359-3940 • TTY (801) 538-7458 • www.ogm.utah.gov

JON M. HUNTSMAN, JR. Governor

GARY R. HERBERT Lieutenant Governor

March 17, 2006

CERTIFIED MAIL 7099 3400 0016 8894 6307 Mike Glasson Andalex Resource P.O. Box 902 Price, Utah 84501 Subject: Informal Conference on the Fact of Violation and Proposed Assessment

State Notice of Violation N06-49-1-1, Andalex Inc. Resources, Centennial Mine, C/007/019

Dear Mr. Glasson: In accordance with R645-401-700 and your request dated February 27, 2006 please be advised that an informal conference on the Fact of Violation for Notice of Violation N06-49-1-1, Andalex Resources Inc., Centennial Mine A date has been established for Tuesday, March 28, 2006, beginning at 3:00pm. This informal conference is to review the Fact of the Violation and review the proposed penalty assessment. Pertinent, written material you wish reviewed before the conference can be forwarded to Mary Ann Wright, Associate Director, Mining and Assessment Conference Officer, at the address listed below. The conference will be held in the office of the Department of Natural Resources, Conference Room A. Please check in at the DNR front desk and then proceed to the conference room. Sincerely, Vickie Southwick Executive Secretary vs cc: Mary Ann Wright Daron Haddock H:\Assessment confenence\Andalex\AnalexInformal Assement confer..doc

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0005

State of Utah

Department ofNatural Resources

MICHAELR. STYLERExecutive Director

Division ofOil, Gas & Mining

JOHN R. BAZADivision Director

JON M. HUNTSMAN. JR.Governor

GARYR. HERBERTLieutenant Governrtr

February 13,2006

CERTIFIED MAIL7099 3400 0016 8894 6208

Mr. Ken MayMine Manager, Sufco Mine397 South 800 WestSalina, Utah 84654

Subject: Findings of Fact. Conclusions. Order and for Violation NO5-53-1-lSufco Mine. C/041/0002. Sevier Count-v. Utah

Dear Mr. May:

On January 31, 2006, an lnformal Conference was held to review the fact ofviolation for N05-53-l-1. As a result of a review of all pertinent data and facts, includingthose presented in the Informal Conference, the attached document constitutes the findings offact, conclusions, and order.

Within fifteen (15) days of your receipt of this letter, you or your agent may make awritten appeal to the Board of Oil, Gas and Mining. To do so, you must escrow the assessedcivil penalties with the Division within thirty (30) days of receipt of this letter, but in allcases, prior to the Board Hearing. Failure to comply with this requirement will result in awaiver of your right of further recourse.

If no timely appeal is made, this assessed civil penalty of $264.00 must be tenderedwithin thirty (30) days of your receipt of this letter. Please remit payment to the Division ofOil, Gas and Mining, mail c/o Vickie Southwick at the address listed below.

VS

EnclosuresP:\GROUPS\COAL\WP\041002.CON\FINAL\Assement conference ltr02t500506.doc

I 594 West North Temple, Suite 1 2 I 0, PO Box 1 45801, Salt Lake City, UT 84 I I 4-580 Itelephone (801) 538-5340. facsimile (801) 359-3940 . TTY (801) 538-7458. www.ogm.utah.gov

Sincerely,

ecJor, Mining6nference Officer

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BEFORE THE DIVISION OF OIL, GAS AND MININGCOAL REGULATORY PROGRAM

DEPARTMENT OF NATURAL RESOURCESSTATE OF UTAH

---ooOoo---

INFORMAL CONFERENCEFor N05-53-l -1

FINDINGS, CONCLUSIONSAND ORDER

CAUSE NO. CIO4I|OOO?

On January 31,2006,the Division of Oil, Gas and Mining ("OGM") held an Informal

Conference concerning the Fact of Violation N05-53-1-1, issued to the Canyon Fuel LLC, Sufco

Mine, Sevier County, Utah. The following individuals attended: Ken May and Chris Hansen for

CFC and Steve Fluke, Wayne Hedberg, Pam Grubaugh-Littig, Dana Dean, Peter Hess for OGM

and Jeff Studenka of the State Division of Water Quality.

IN THE MATTER OF THE SUFCOMine, Canyon Fuel Company (CFC),LLC, SEVIER COUNTY, UTAH

Presiding:

Petitioner:

Mary Ann WrightAssociate Director, MiningDivision of Oil, Gas and Mining

Canyon Fuel Company,LLC, SUFCO Mine, Ken May &Chris Hansen

---ooOoo---

:

The Findings, Conclusions, and Order in this matter are based on information provided by

the Petitioner in connection with this informal conference, and on information presented by Mr.

Steve Fluke, which is in OGM files. A copy of this information was provided to the Petitioner.

FACTS PRESENTED: Fact of the Violation

l. By letter dated January 5,2006,Mr. Kenneth E. Muy, General Manager of Sufco Mine

requested an informal conference to discuss the fact of violation for ViolationN05-53-l-1 .

P:\GROUPS\COAL\WP\041002.CON\FINAL\findingInfConf.do. I

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2. Pursuant to Utah Code Ann. Section 40-10-20 and Utah Administrative Rules R645-401-700, notice of the informal conference was properly given and an informal conference inthe matter was held on January 31,2A06.

3. The Violationwas issued onNovember 14,2005 forthe existence of coal fines inthe

North Fork of Quitchupah Creek, observed by OGM on October 13,2005. The source of

the slouded water in the stream was presumed to have originated from the Mine's

UPDES discharge pipe, 0034.

The Violation was abated by the submittal of a preventive action plan. The violation was

subsequently terminated by OGM on December 14,2005.

Mr. Steve Fluke presented a package including: a chronology of events, a location map of

the water sample locations, photos of the coal in the stream, photos of the water samples,

copies of the water analyses, the citizencomplaint, notice of violation, the assessment for

the violation, and the SUFCO plan to abate the violation. Mr. Fluke went through the

package and explained the information provided. He explained that on October 5, 2005,

Division of Water Quality (DWQ) field samplers observed coal fine-laden water in the

North Fork of Quitchupah Creek downstream of the Sufco UPDES 003A discharge. The

DWQ reported atotal suspended solids (TSS) concentration of 458.7 mglL for a sample

collected from the North Fork of Quitchupah Creek at that location. Mr. Fluke visited the

creek with DWQ on October 13 and collected samples above and below the 0034

discharge point. The water sample collected below the discharge point contained coal

fines. Laboratory analysis of the samples revealed TSS concentrations of 16 mglL and

49.2 mg|r- for the samples collected above and below the discharge point, respectively.

Photos taken on October 13 showed coal fines settled onto the streambed of Quitchupah

Creek. Standard mine samples taken at the discharge point, 003A, were <5 mglL for TSS

on September 28, and again on October 5, the same day that the samples downstream

were collected by DWQ.

4.

5 .

P :\GROUPS\COAL\WP\04 I 002. CON\FINAL\trndinglnfl onf. doc

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6. The Petitioners, stated that the mine discharge from 0034. was sampled on September 28

and again on October 5, 2005 and found to be clear and in compliance. He presented

photos showing the coal fines in Quitchupah Creek on October 13, and the clearwater

coming from the 003,4. discharge pipe on October 18. He petitioner stated that mine

personnel walked the stream to determine if the coal in the stream had come from another

source besides the discharge pipe. No other source of the coal fines or black water could

be found. Given that no direct witness to the coal fine discharge event at 0034. could be

made, the fact of the violation was questioned. Mr. May and Mr. Chris Hansen asserted

that CFC takes this matter very seriously and the permittee has taken further steps,

beyond their initial plan, to prevent coal fines from entering the creek. They presented a

proposed plan to reroute mine water to a location underground where it would be difficult

for water contaminated by sedimentation from a roof fall or other entry of gob material to

exit the mine without an appropriate settling time. This plan was being presented to CFC

management.

CONCLUSIONS

. Coal fines were sampled in Quitchupah Creek on October 5 and October 13,2005.

. No other possible source of the suspended coal fines could be identified.

. OGM was correct in issuing the violation to Sufco Mine for coal fines in the Creek

downstream of the discharge point, 003A.

r The Fact of the Violation should stand.

ORDER

NOW THEREFORE, it is ordered that:

' The Fact of the violation is upheld.

Mary Ann Wri Assoifate Di , MiningInformal ce OfficerDivision of Oil!State of Utah

P :\GROUPS\COAL\WP\04 I 002. CON\FINAL\findinglnfConf.doc

and Mining

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0 0 2 6"Ji\ ir I11 ( r\: i

t . - t , t . ' l

I L ' - i ; L ' - ' " , t -

Mike Davis, Environmental Engineer397 South 800 WestSalina, UT 84654(435)286421 -Office(€5) 2864499 - Fax

RECElVENMAR 2 0 2006

DlV,0F OlL' GA$ & Mii ' ir: '

Canyon FuelCompany, LLc.

Sufco MireA SnbCdnry dArdr lfeetarn Biumircue Gru,rp, LLC.

" March 17 ,2006

Coal Regulatory ProgramAttn.: Pam Grubaugh-LittigUtah Division of Oil, Gas and Mining1594 West North Temple, Suite 1210P. O. Box 145801

--salr Lake city, urah 84IL4-5801 _

Re: Civil Penalty - Division Violation N05-53-1-1, Canyon Fuel Company, LLC, SUFCOMine Cl04ll002

Dear Ms. Grubaugh-Littig:

As a follow-up to our phone conversation on Friday March 17,2006, please find enclosed checkno. 1 57 4 for the civil penalty for Division violation N05-53- 1- 1 in the amount of $264.00.

As I explained on the phone I have been out of my office until today and this check was sent tome at the minesite instead of to the Division of Oil, Gas and Mine. Since it was due today Icalled to get approval to mail the civil penalty check to the Division instead of having to drive toSalt Lake City to hand deliver it. A scanned copy of this letter and check was emailed to theDivision on March 17,2006.

Thanks for the consideration and help.

Sincerely,CANYON FUEL COMPANY, LLCSUFCO Mine

ru/fuMichael L. Davis,Environmental Ensineer

Encl.

Sufpub/govt2006/dogm-coor/Pam Grubaugh-Littig.ltr 03 1 706.doc

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fl*Pff-*

r CANYON FUEL COMPANY, LLCCITY PLACE ONE, SUITE 3OO

sT. LOU|S, MO &3141

PAY TO THEORDER9p D i v i s i ono f O i l .GasandMin - i nq I $ 264

I57 4

31-5/1240DATE March 14, 2006 54

CANYON FUEL COMPANY. LLCsT. LOUTS, MO 63141

ZTONS BANK'Zioss Fir* Natinat Ba*tuIitu Offtce P.O. Bor rnMitu, UtuhA654uuw.ziotbank nm

v- $,*'t't- -6-r .OO I5 ? lnr r . t : I eLOOOO 5hr : O 51. O lO ? I S t t .

DETACH A]ID RETAIII THIS STATETEIITTHE ATTACHED CHECK IS IN PAYMENT OF ITEMS OESCRIBED BELOW

IF NOT CORRECT, PLEASE NOTIFY US PROMPTLY. NO RECEIPT DESIRED

,,rffiDATE AMOUNT

$264.00Civ i I Pena l t y D i v i s i on V io l a t i on N05 -53 -1 -1

RECEIVENMAR 2 0 2006

DIV OF OIL, GAS & MINifuTJ

q;;bu*r

4r+tf oca''''

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0012 I

i+ CONSOL€N€RGY* Consolidation Coal CompanyP.O. Box 566Sesser, IL 62884Phone: (618) 625-2041Fax: (618) 625-6844

April 7 ,,2006

Vickie SouthwickUtah Division of Oil, Gas and MiningCoal Program1594 West North Temple, Suite 1210Box 145801Salt Lake city, utah 84114-5801

Re: Emery Deep Mine Permit Cl0l5l015State Violation No. NO6-39-2-lAssessment paymenet

Dear Mrs. Southwick:

Please consider this payment for the civil penalty assessment for the above mentioned violation.Check Number: 1520180166 $880.00

If you have any questions please call me at (618) 625-6850.

CC: Steve Demczak - DOGM-Price Field Office-with attachmentsDaron R. Haddock - DOGM- Salt Lake CiW-with attachments

Artachments

JAG/j ag emery4theast. sampler.NOVassessment.doc

F RECEIVED iI no6tI nPRll"!

DIV. OF OIL, GAS & MINING

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PAY

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