RAMACO February 8. 2016 (30x emor Matthew ll. Mead Office of the Governor State of yoming 2323 Care} Axe. Che} enne. Wyoming 83801 Re: Policy Implications of Attorney General?s Interpretation on Form 8 Written Consent Requirements Dear Gowrnor Mead. i am writing to )ou again. frankly at the prompting ot?your min DLQ staff. Ramaco"s permit group. in the course of a normal meeting last Friday was made aware ot?deep reservations. which the icon] DEQ has on the implications of the Attorney General's new interpretation of the consent requirements to mining permit issuance. amendment and modi?cation in W1. oming. The law oi??unintendcd consequences? is that this new interpretation ot?the Attorney General. by unintended design. isill pl'm ide a "Trojan horse? that could be used by those opposed to mining in Vt oming (or those who seek a ?nancial windfall). The UFO stuff feels that it will potentiall} be used to stop or delay both existing. as well as proposed mines. Instead ot??tighting for coal? the State vii ll become an unwitting adversary delivering "friendly tire? to those mining interests attempting to operate in the Qatatc. Since you have an overwhelming number of matters before you. I felt it incumbent to eleiatc these concerns of the DEQ directl} to you. i have also attached a policy paper prepared for you and )our stai?t?to rex icvx and consider. Basically the prior practice of the DFQ was to allow a deed containing a surface mining reservation to be ust in lieu of a new written Form 8 consent from a surface landowner (who had already protidcd consent in the deed). This applied to both new permits, as well as modi?cations to existing permits. When confronted by our counsel last week with this prior practice. the Attorney General responded that in his \iew the BBQ had previously and mistakenly acted in violation ot?thc law He further stated that any contraiy advice rendered by the Attorney Generals predecessors was a mistake. The outshot is now that a surface owner's prior consent would basically be invalidated and a nevi mitten consent would be required. I will not detail here all of the scenarios and negative implications. which this new interpretation. could trigger. 1 would refer you to the policy paper as a good start. i would further add. as stated. that your own DEQ staff in a meeting last l-iriday expressed deep concern on this approach. They felt that under this interpretation. a new written Form 8 consent from a surface owner could be 1101 Sugarviow Dr., Suite 201, Sheridan, Wyoming 82801 required. both when there has been a new surface land transfer. or whenever an existing permit required modification. either major or minor. This would be the case. even when a surface owner had pier iously prox ided such consent in the past. This opens a Pandora?s box. which could and would be used to impede. delay or even stop nev. or existing mining in Wyoming. It could also be used to impede both new or modi?ed mining permits to dramatic effect. I would urge you to carefully consider that the Attorney General is perhaps unwittingly creating a potentially amenable hurtle for Wyoming mining interests. 1 say this not only on behalf oi? our narrows interesr in seeing the Brook Mine permit to be allowed for public comment. but also for the rest of the mining industry. Indeed. my impetus in writing this letter was the concerns espresst in the last few days by your own DFQ staff as to this new interpretations impact on Wyoming mining generally. You have positioned yourself as a far?sighted champion for the Wyoming coal industry. It~ the implications of the position of your Attorney General are not properly judged and considered. this may create a dangerous new prom-dent. which may be used against that industry. ordially yours. Ramaco, a ?eas. . Randall W. Atkins Chief Executiie Oi?lieer t'e: Ixari in Gray Honorable Rosie Berger 1101 Sugarview D13, Suite 201, Sheridan. Wyoming 82801 DEPARTMENT OF EWIRONMENTAL TO RECOGNIZE CONTRACTUAL LANDOWNER CONSENT: SUMMARY or POTENTIAL IMPACTS Ramaco Wyoming Coal. has been advised by the oming Attorney tieneral?s Of?ce (AG). that it will deem Brook?s mine permit application deficient because ol?a failure to obtain written landowner conSent approving its mine and reclamation plan. The AG has concluded that Brook's reliance on its reserved surface rights in the deed to purchase the property. while arguably suf?cient to grant surface access for mining. does not satisfy the requirements ol?the Environmental Quality Act.1 Within the past week. members of local staff have expressed concerns directly to Ramaco?s permit team criticizing the potentiall) far?reaching negative impact of the apparently ?new policy Speci?cally, in addition to the severe impact ?ndings could cause to Brook Mines pro?iectz, there are signi?cant and far?reaching negative consequences that could affect hundreds of existing and future mining projects. This policy paper is being presented so that the appropriate arms of the Wyoming State government can consider the negatix?e ?unintended consequences" of the new policy interpretation. BBQ and the AG have made the perfect. the enemy of the good. '2 his new policy could also create :1 rojan I lorse" to he LtSed by interests oppOSed to mining to either delay or potentiall} stop both new or existing. mining in Wyoming. As Sol forth in Rarnaco?s previous responses to BBQ and AG Comments. Brook strongly disagrees with the new interpretation and distinct shift in policy which would no? impOse the requirement ot?a new written landowner consent. This shift is contrary to the prior practice in approving both coal and other mining permits and permit amendments. as well as accepted Wyoming case law. By Virtue of its dominant mineral estate and the broad. unambiguous surface use reservation, additional surface on ner consent to the mine and reclamation plans is neither necessary nor appropriate. I Speci?cally. the Ab ?nds that Wyo. Stat. 35?] requires speci?c written landowner consent to the proposed mine plan and the proposed reclamation plan even when the surface owner does not hat the right to exclude the owner ot?the mineral estate from the property. 3 in exchange for their consent. the two non?consenting surface owners have demanded compensation far in excess ol?thc land value at issue. 'lNhese demands could render Brook?s project uneconomical. The following is a summary of these potential consequences: I. Landowner Consent Would Be Required for Existing Permit Modi?cations As the explained to Brook. DEQ will now require prool?by an executed Form 8. that current surface owners consent to both a mine plan and reclamation plan submitted for permit ret iew. When confronted with evidence of historic practice ol?allowing a deed or other legally binding document to be submitted in lieu of specific surface owner consent. the AG responded that the had previously mistakenly acted in violation ofthe law and that an}: contrary advice from the predecessors was a mistake. Thus. under this new interpretation. both new permit applications as well as modifications of existing permits must include an explicit surface owner consent on DiriQ's official Form 8. If the DEQ non interprets the Environmental Quality Act as 211? a) requiring a new written consent. even if other documents (such as a deed) demonstrate some Form 01? previous consent. then permit modi?cation requests will require new consent regardless of the scope of the modification. Big or small. an), request to change an existing permit would open the door for a surface owner to extort new payments for consent. indeed. this is the same dilemma. which Ramaco faces in heing asked to pa} tens of millions ot?dollars in return for a new consent ith landou ners already subject to a surface mining reset?. ation. It might also he noted. that under this new approach any permit modi?cation on surface and mineral lands leased from the BLM would require the Federal government to provide a neu written consent. Such consent would potentially involve political and environmental interests. which do not want mining to occur in Vt }omiitg. on its face. this policy change presents significant problems. on nets are empowered to oppose mining projects despite the existence ot?ent?orceable surface aceess rights in deeds or other instruments. then there is no limit on how demands could escalate. Vi ith no way to predetermined rights. surface ouners could arbitrarily withhold consent to the mine and reclamation plans. Dle?s policy shill would significantly increase the risk for a compan} currently engaged in mining in Wyoming to modify its permit. Given the everwinercasing risks that mining companies face. adding neu risk makes no regulatory or economic sense. if a landon refuses to consent. then a potential expansion ol?a job and res-'enuocr'eating project would be 10st. 2. Requirement for New Consent from a Surface Transferee Il?the ALPS new interpretation ofthc Form 8 consent requirement is applied then there an; a variety of situations where surlace owners could impede or stop existing or proposed mining in Wyoming. [examples would include: ll'a surface owner passes away and does not perpetuate hisi'her consent via a will or other document (that can be inserted into the permit) then a mining operator would be required to seek a consent from the new estate holder for any permit amendments or project 2 modifications. i.e. the prior consent will neutered oi" the prior rights it conveyed. ll?thc surface of an existing operation is sold either in whole or part. then consent must be requested of the new landowners it?there is any permit modification. political or other groups intent on delaying. impeding or even stopping mining in \Moming. could use this new policy to suggest to landowners that the} have not prei iously gix en consent on any permit changes that have occurred since their original consent. This could be applied to wreak havoc on existing mining operations throughout oming. Reclaimed surface lands sold without full bond release EN ould require consent oi?the new owner to the mine and reclamation plan. in the event ot?a modi?cation or amendment. The public comment period will no longer be utilized as the forum for previously consenting surface on. ners to rais: objections to their prior consent. 3. Ike?evaluation of Permit Application Completeness Presently . the permit application process is designed to allow onwgoing plan modi?cations aimed at developing a project. potentially ox er decades. that takes into account potential impacts to all stakehoiders. It is a d) namic process involt ing numerous changes to accommodate the needs ol?all intohed. As an initial part of that DEQ makes a detennination whether the permit application is complete. l-Iistorically. an application would be deemed. complete with either a l-orm 8 Surface Owner Consent or some other document showing that surface owner cortSent was not required (Le. a deed in lieu of consent]. Presently, once a completeness detern'iination was made and the application vies no ice ed for technical adequacy. the application could he changed or modified without additional or new surtacc on consent. The new policy shift could grind this process to a halt. By requiring a Form 8 no matter the circumstances. cannot deem an application complete until the applicant gets that lrorm 8. This would delay the technical review process indeiinitel) . again increasing the risk a compam faces for trying to do business in Wyoming. 4. Linlimited Exposure for Existing Mine Permits .ts Ramaco discusses in its Round 4 Comment Rosponsc. the DH) has a long-histon of acceptint-I other documents like property deedsw?in lieu o'l?a Form 8 Surface Owner Consent. "l he AG's 180 degree change calls into question the validity, ol?potentiaily all prior permits or modi?cations and hill likely lead to litigation oi er whether DEQ had the authority to issue them. Put simply. all existing mine permits or modi?cations without a Form 8 would be suhiect to litigation and attacks claiming the permits were unlawfully issued. That litigation would affect more than just coal companies and would include other mineral interests. Ramaco?s Round 4 Comment Response shows that those existing permits span severai mining industries- ?all potentially subject to attack from surface owners or em ironmentalist groups interested in stopping all mineral extraction in the state.