By Allen Best
DKRW Advanced Fuels’ first proposed its Medicine Bow Fuel & Power coal-to-liquids complex in Carbon County about eight years ago. It’s supposed to be the first of its kind in the United States and, according to some, one of the cleanest energy plants in the world.
Yet, in eight years, the only environmental analysis of this next generation energy complex, and the environment in which it would operate for 30 years or more, has been divided among various state agencies.
Critics say the state’s piecemeal analysis and approval of the complex’s different components fails to consider broad environmental consequences of the project in its entirety. Far too little is known about the refinery’s consumption of water, for example, and the effects of pumping large volumes of groundwater, according to one outspoken geologist familiar with the area.
However, these critics may finally see the more comprehensive environmental review they’ve been demanding.
A federal environmental review under the National Environmental Policy Act that stalled out a few years ago will be restarted later this year.
The U.S. Bureau of Land Management (BLM) will launch a full environmental impact statement (EIS) “in a few months,” said Dennis Carpenter, manager of Wyoming BLM’s Rawlins Field Office.
The EIS provides an opportunity for organizations and individuals to learn more about the unique environmental conditions in the area, and opportunity to add their own analysis and critiques.
Perhaps nobody has more to say about this landscape and the Medicine Bow Fuel & Power project than a retired University of Wyoming professor for whom the area is one of his favorite haunts – Jay Lillegraven.
For most people, the area where DKRW wants to put a coal-to-gasoline plant wouldn’t be a matter of love on first sight. With Elk Mountain ever-vigilant in the distance, the landscape of eastern Carbon County has a difficult sparseness to it. Only over time do the more subtle textures become apparent.
It’s an uncluttered place. Except for maybe hunting season, it’s possible to go days in that country without seeing more than a few people, and most of them at a distance. Your most constant companion is wind, sometimes strong enough to blow over trucks on Interstate 80, which is five miles south of the two proposed coal mines and, perhaps one day, a refinery that DKRW says will produce 11,686 barrels per day of low-sulfur gasoline and 1,682 barrels per day of propane. The process has never before been used at commercial scale in the United States.
Even sagebrush has a hard time in this environment. In early November, walking the hillside 12 miles southwest of Medicine Bow, on the site of DKRW’s ambitions, I was struck by how dwarfed the sagebrush is. You walk over, not around, it.
“Probably the combination of wind and lack of precipitation,” said Jay Lillegraven, my tour guide.
We were a short distance from two concrete pads, the only physical evidence yet of the project that was first announced in 2004. Together, these two pads might accommodate an 18-wheeler. The first pad was poured in late 2010, apparently in order to fulfill a requirement by the Wyoming Industrial Siting Council that construction begin within two years of the permit. The permit had been issued in early 2008.
That’s little to show for all this talk. Some people in Wyoming see that as evidence that DKRW Advanced Fuels, the owner of Medicine Bow Fuel & Power, is perpetrating nothing more than an elaborate ruse, with no real intention of ever building anything substantial.
Lillegraven is not among them. He sees the project as all too real, and a threat to the landscape he loves. He has protested the proposed coal refinery and its feeder mines since late 2007, when developers first appeared before Wyoming’s Industrial Siting Council.
Aside from some opposition by environmental groups, Lillegraven and a handful of other locals constitute a fierce challenge to a project that would transform this area along the Medicine Bow River from pastoral to industrial.
His concerns are two-fold: what the proposed project will do to the basin’s delicate hydrology, and the dangers of attempting to operate an underground coal mine in an area laced with faults.
A licensed geologist in Wyoming, Lillegraven holds a Ph.D. in zoology and taught classes primarily in paleontology and paleogeography at the University of Wyoming beginning in 1974. Despite his close proximity to the Hanna/Carbon Basin, Lillegraven didn’t become absorbed in the basin’s geological story until he had been in Laramie for 15 years. It was a student, a Ph.D. candidate, who got him hooked.
The student took him to a place northwest of Medicine Bow described as a break, also called a badlands. It has deep gullies and slopes that in the sunlight of a summer morning are a prism of green and gray, gold and orange. There’s even a small sandstone arch. Lillegraven was smitten.
Ammonites and other fossils from Wyoming’s time as an interior sea had drawn many scientists, but Lillegraven returned because of something bigger: the geology. To understand how a species has evolved, a paleontologist must know the context. Geology is that context. But as he studied the Medicine Bow badlands, Lillegraven was mystified by the crumpled, exposed rocks that tilted and bent in ways that defied common geological explanation.
One thing led to another. From that original jigsaw puzzle created between 55 million and 61 million years ago in the Medicine Bow breaks, Lillegraven set out to piece together the geologic story more broadly of the Hanna and Carbon Basins. “I got more and more bored with the fossils and more and more excited about the geology,” he says.
At first, this excitement was confined to summer vacations. Mostly on foot, he set out to explore and map the geology of the basins. In 2004, after retiring from the University of Wyoming, he picked up the pace, expanding his field work into other seasons of the year.
“I spend so much time out there, I almost consider myself part of the landscape,” he wrote in one affidavit involving the DKRW project in 2009.
For geology, it’s an exciting place. The spine of the Rocky Mountains there abruptly takes a 67-degree turn, veering west toward South Pass and the Wind River Range.
“The complexity of this part of Wyoming exceeds any part of Wyoming and, probably, any other part of the Rocky Mountains,” he says. “There’s not a straight line out here.”
It is also a place riven with slippages. Marks indicating faults hash the maps that Lillegraven has compiled. He scoffs at one of the reports done for DKRW that says the closest fault lies 240 miles to the west. In his work, Lillegraven has found faults nearly everywhere.
Over time, Lillegraven concluded that the surface of the Carbon Basin was composed of something called a klippe. It’s a stew of materials, highly fractured and with little cohesion, that probably originated in the Freezeout Hills, more than a dozen miles away. About 45 million years ago, he hypothesizes, it slid over the Carbon Basin.
Those faults are at the heart of one of his quarrels with the state permits for the DKRW project.
The layer of coal targeted by the Saddleback Mine is the Johnson Seam, which is believed to range from zero to 30 feet in thickness. As deep as 600 feet underground, the coal from that seam would be extracted by workers underground using long-wall mining techniques. That mining, insists Lillegraven, would be uncommonly dangerous, perhaps as risky as the Crandall Canyon disaster in Utah of 2007 that killed seven miners and rescuers.
“The pervasiveness of rock fractures and faulted strata of the Carbon Basin’s strongly tilted Hanna Formation has led to a mine setting having conspicuous dangers from roof-rock instability and potential for premature collapse into voids developed during underground mining,” Lillegraven said in a Jan. 9, 2013, letter to the state’s Industrial Siting Division.
Lillegraven is invariably the careful scientist in his letters to state and federal regulators, precise in his language, assertive in his facts, and tart, even acerbic, in his observations.
Alluding to professional regulators in a letter to the Wyoming Department of Environmental Quality (DEQ) in January 2013, he asserted that they are “expected to make decisions based upon verifiable evidence, not upon unfounded ‘personal beliefs’ or acceptance of undocumented assertions.”
Nit-picking or butt-chewing? Either way, state officials in Cheyenne know that someone with eyes comparable to those of the golden eagles that sometimes cruise over the Carbon Basin are watching their every move.
Lillegraven is not alone in questioning the adequacy of Wyoming’s permitting process. Others, including John and Reese Johnson, the most immediate neighbors of the project, see the DKRW review, so far, as evidence that the state’s regulatory process has cracks. They allege a carelessness that masks an underlying bias in favor of developing fossil fuels at the risk of long-term environmental protections.
Wyoming officials bristle at such allegations.
“Governor (Matt) Mead is always looking for ways to make sure state agencies work well together,” Gov. Mead’s press secretary Renny MacKay told WyoFile. “However, agencies do meet regularly to facilitate good communication and efficient delivery of services. There are also initiatives being developed as part of the Governor’s energy strategy to improve agency coordination.”
A handful of state agencies and local governments will play an integral role in the federal EIS analysis in coming years. Yet critics such as Lillegraven and the Johnsons say the DKRW case, as it’s been examined so far over the past eight years, illustrates why Wyoming should update its regulatory process. The state can better protect vital assets by considering such complex projects as DKRW’s mine-and-refinery in their totality, rather than in piecemeal fashion, as dictated by the division of state and federal authorities.
Connie Wilbert, field organizer for the Sierra Club in Wyoming, says she finds Lillegraven’s critique of the permitting process and his broad geological knowledge to be “reasonably persuasive.” The Sierra Club has thus far filed a challenge of the project’s air quality permit, nothing related to Lillegraven’s concerns.
She says she finds the Wyoming regulatory field tilted toward industrial proposals. “It often seems that some of our regulatory agencies, like the Department of Environmental Quality, are more interested in helping industry than in looking out for the citizens,” she says.
(The DEQ includes the Industrial Siting agency as one of its divisions).
The coal-to-liquids plant proposed DKRW sailed through the Carbon County courthouse. A conditional-use permit was awarded in September 2007. Sid Fox, the county’s director of planning and development, says the county required no other major permits.
Since that approval, Carbon County has revised its permitting, requiring county commissioner approval of conditional-use permits and specifying a two-year sunset if construction has not started.
State agencies, rather than the counties, have long carried the burden of serious review of major new industrial projects. DKRW’s project is big enough to require a permit from Wyoming’s Industrial Siting Council. The council was created in the 1970s for the purpose of helping Wyoming communities cope with the influx of workers and increase in social service needs that come with large-scale industrial construction.
Currently, projects with an estimated capital cost of $191 million fall under the authority of the council, requiring a permit that mandates the applicant to work with local communities to plan for the influx of workers. the The applicant is directed to consult with up to 19 state agencies.
In the case of DKRW, the project needed to get an opinion from the state’s water supply experts, the State Engineer’s Office, as to the sufficiency of water from underground sources. Applicants for industrial siting permits are required to submit a water supply and water yield analysis for any facility that will use more than 800 acre-feet of water per year.
DKRW’s mine and refinery would need about twice that much water, 48,000 acre-feet spread out over its 30 years of operation, according to the final opinion issued by the State Engineer’s Office in October 2007.
Lisa Lindemann, the groundwater administrator in the state agency, said this figure was provided by URS Corporation, the consultant to DKRW, based on the need for 1,000 gallons per minute.
In its conclusion in 2007, the State Engineer’s Office said that “sufficient water exists in the Mesaverde aquifer” to provide that water. “Plans to drill 12 production wells in order to obtain a total yield of 1,000 gal/min are reasonable based on the very limited information obtained from pumping tests of two test wells. If well yields are less than the anticipated 90-100 gal/min, additional wells could be drilled,” said the agency.
“The proposed volumes are not insignificant,” said Lindemann, the groundwater administrator, in an e-mail to WyoFile. “In comparison with a state-wide water budget, the numbers are also not alarming.”
She said that the state engineer routinely approves irrigation permits for 1,400 to 1,500 gallons per minute, and permits for industrial uses that authorize 1,000 to 3,200 gallons per minute.
In reaching this conclusion, the water agency accepted the methodology of the URS Corporation, a consultant to DKRW. The consultant had drilled four wells, ranging in depth from 782 feet to 2,289 feet. URS said only two of the wells reached the Mesaverde, and it then operated the two wells for 24 hours each.
Few other wells have been drilled in the Carbon Basin, the report notes, so not a lot was known about either the quality or quantity of water available.
In its final opinion, the water agency noted too little information was available for “reliably predicting long-term well yields,” and added: “But that is all the data available.”
Lillegraven says DKRW’s consultant might be right as to the adequacy. But, he argues, there’s too little evidence to know for sure. Based on his study of the geology in the Carbon Basin and his study of the URS Corporation’s report, he insists that only one test well that was drilled actually reached the Mesaverde aquifer, which was the aquifer permitted for withdrawal. Lillegraven believes that the other wells didn’t go deep enough to reach the Mesaverde.
If Lillegraven is correct, the adequacy of water supply for this $2 billion operation might rest on one well that operated for 24 hours. And in his opinion, wells drilled to a more shallow depth run the risk of tapping groundwater near the surface, with impacts to surface vegetation and hence the carrying capacity of the land for cattle and wildlife.
Consulting hydrogeologists contacted by WyoFile were hesitant to say much because they had seen neither the State Engineer’s Office final opinion in this matter nor the URS report.
Chris Moody, a hydrogeologist based in Laramie, says that in general two weeks of test well operation, or perhaps longer, would be advised. But almost everything depends upon the drilling records.
“In the first blush, it seems a little brief, but that’s not to say they didn’t make a decision based on some logic that they felt they could defend,” says Moody.
Bern Hinckley, also a consulting hydrogeologist in Laramie, says this region of Wyoming does not lend itself to extensive groundwater development. “There are other aquifers deeper, but whether they are productive at that location is not known,” he says.
He said it would be prudent for a $2 billion enterprise to have ascertained the sufficiency of water. But that’s not to imply that DKRW hasn’t done so, he added. Like Moody, he didn’t see the reports.
Reese Johnson and her husband, John Johnson, work a ranch headquartered along the Medicine Bow River, just a few miles from the plant site and adjacent to a gravel road that links Elk Mountain and Medicine Bow.
The Johnsons live in a two-story house, built in the 1880s, about the time that Owen Wister first arrived in Wyoming to draw inspiration for his best-known book, “The Virginian.” Their dining room has a large table, which you could imagine being crowded with elbows during haying season or branding days. The day I visited, it had a silver iMac sitting on it. The couple had shipped their calves the day before, and that day had spent their time checking on the pregnancy of their cows.
John Johnson disputes any characterization of the Medicine Bow Valley as a hard place to make a living. “You just have to manage it right,” he says. “At 6,500 to 7,000 feet (elevation) and with annual precipitation of 13 inches, there’s not a lot of row crops around. But it’s a good place to make a living if you treat your environment with care and passion and do it right.”
The Johnson’s have a conflicted view of DKRW’s proposal. Their ambivalence is partly explained by work with The Nature Conservancy to put a conservation easement on 7,200 acres covering 15 linear miles of the Medicine Bow River and a tributary, as well as adjacent hay meadows. The Johnsons say they were paid for a portion of the easement but also donated a portion.
“We looked at it and said ‘heck yeah, this is a great piece of ground,’” says Brent Lathrop, director for the Southeast Wyoming Program of The Nature Conservancy. The organization is concerned about the impact of coal and natural gas development, which would not be stopped by a conservation easement, but went ahead anyway, he said.
In the 1990s, the Johnsons were also party to a land deal that, indirectly, has made possible DKRW’s coal-to-liquid proposal. The landscape there had checkerboard ownership, the result of the federal government’s subsidy of Union Pacific for its part in completing the transcontinental railroad in the 1860s. The current owner, Arch Coal of Wyoming, in the 1990s swapped parcels and provided compensation, all in the interests of improving the company’s ability to mine a set of contiguous parcels over what is called the Johnson Seam. In turn, the Johnsons got a more consolidated ranch that now totals 10,000 acres of private land and permits for grazing 30,000 acres of federal land. Arch has a 24 percent stake in the DKRW project, which is now slated for Arch’s consolidated coal properties.
John Johnson, who in November was appointed as a commissioner of Carbon County, admits limited enthusiasm about the prospect of a coal mine in his backyard. “I’m not excited about it,” says Johnson, a fifth-generation resident of the county, but adds that he would be hypocritical to oppose it. In addition to enabling the exchange with Arch, his great-grandfather owned a coal mine. And he has nice things to say about Arch Coal. “They’re a quality operation.”
The Johnsons see the coal-to-liquids plant differently from the mine. They’d prefer to see the mine without a conversion plant attached. To them, the plant poses long-term environmental risks to the landscape they love. Like Lillegraven, they contend that governmental reviews have been conducted with kid gloves.
“It feels like a snowball. You’re pitted against such powerful players, the county, state and federal governments, who want to get behind this new use for coal, and they don’t want anything to slow that down,” said Reese Johnson when we met in early November.
“This is the first of its kind in the country, and you’d think they’d be taking a really close look,” she said. “But it seems really cursory. That is what frustrates us.”
Industrial Siting Council
Whatever the State Engineer’s Office determines as to water sufficiency, it must be accepted at face value by DEQ’s Industrial Siting Council. “We rely on their expertise,” says Luke Esch, administrator of the siting division.
The council, according to the guiding statute, must find that “the granting of a permit will not result in a significant detriment to, or significant impairment of, the environment …” However, neither “significant” detriment or impairment is defined by the law – those are issues for the siting council to decide, based on evidence presented to it by the company, the agency staff, and any protestors.
Lillegraven argues the impacts to the ranchlands used by locals for grazing would rise to that level, based upon his understanding of the fractured geology.
What he says may happen is that as water is withdrawn from the aquifers, water near the surface will in turn trickle down to replace it. Unlike many places, he sees no lids for the aquifers, what is called cap rock. The net result is that there is less underground water emerging in seeps, upon which wildlife depends. In this scenario, the extraction of water for the plant could mean that a difficult land becomes even more hostile to life.
“Prolonged pumping could very well lead to excessive lowering of the land-surface’s water table, subsequently resulting in landscape desertification,” says Lillegraven. This is an issue the Industrial Siting Council must weigh, Lillegraven says.
The suggestion implicit in Lillegraven’s challenge is that Wyoming permitting agencies are tilted in favor of economic development at the expense of the environment.
Sandy Shuptrine, a member of the Industrial Siting Council, dismisses that perceived tilt as incorrect. Politically independent, she lives near Jackson and joined the council in 2003. “It felt like there was perhaps more emphasis on expeditiousness than on thoroughness,” she says of her first impressions of the board. That’s no longer the case – and hasn’t been for a long time, she added in an October interview.
She remembers when Lillegraven appeared before the Siting Council in 2007. “I cannot recall him presenting evidence other than his own, which doesn’t mean it’s not valid. But it’s nothing other than his professional advice,” she says.
But Lillegraven’s argument does suggest a gap, she says. The Industrial Siting Council has no in-house geological expertise. For that matter, neither do the non-profit watchdogs such as the Wyoming Outdoor Council, for which Shuptrine has served on the board of directors. Such nonprofit groups do often contract professional analysis for their comments on such projects, however.
Todd Parfitt, executive director of the DEQ, says siting permits are not a forgone conclusion. “Our mission is to ensure that they meet the necessary requirements as specified by law,” he says of applicants.
Wyoming’s review process, both for industrial siting and the broader Department of Environmental Quality, provides many opportunities for public review and comment. The laws and regulations governing industrial siting were updated as recently as 2009 and 2010, identifying 19 state agencies that must be consulted.
The industrial-siting process has yielded 48 permits for everything from coal plants to wind farms, reports Parfitt, and anticipates large and complex projects. “The process that has been established seems to accommodate what we are seeing with the DKRW project,” he says. But it is the Industrial Siting Council, the appointed board, that issues permits, not the division itself.
Environmental groups have been engaged in the DKRW review, but it hasn’t exactly been among their priorities. Most prominently, the Sierra Club challenged the project’s air-quality permit in 2010, arguing that the state had failed to consider significant emissions of sulfur dioxide and fine particulate matter. The Wyoming Supreme Court in 2011 rejected the argument, ruling that DEQ had properly calculated possible emissions.
Love at First Sight
Lillegraven first glimpsed this country around Medicine Bow as a youngster. He grew up in the Manhattan Beach section of Los Angeles. Even in the 1940s and early 1950s, L.A. was crowded but also smoggy, far worse than now.
In summers he escaped. His parents put him on a bus from the time he could be trusted to travel alone, he thinks probably nine or 10, to visit grandparents on their Minnesota farm. It was all wonderful, but Wyoming was the best. By chance, his buses went through Medicine Bow, both coming and going, in the late afternoons, when the landscape filled out with long shadows.
“I remember that this was just magical to me,” he explained one morning in early November while he drove west from Laramie. “I thought that this was what all of Wyoming is like.”
If, in his eyes, other areas of Wyoming have been defiled by industrial development, while this area remains largely unspoiled. “This is still a working land, with real ranches,” he said.
A college instructor, both enthusiastic and imaginative, caused a casino of lights to begin glowing in the young Lillegraven’s head. He got degrees first in California, then South Dakota and Kansas before he learned of a faculty position at the University of Wyoming. He jumped at the opportunity. That was in 1976.
Jay Lillegraven at the restored sheepherder’s wagon he conducts work in, which he has named Prairie Argo. (Allen Best/WyoFile — click to view)
“I like people, but in limited quantities,” he says. He also believes his Norwegian ancestry plays a role in his preferences. “I like winter a lot better than summer,” he says. “Wyoming seemed to be the place.”
Lillegraven doesn’t just abide hard winds. He embraces them just as much as he does wide open spaces. On a mild November day, the burly wind only occasionally trying to muscle away his carefully constructed geologic maps, Lillegraven pointed to rocks evident on hills above the DKRW project site, explaining their relationship to the Simpson Ridge anticline and the bend in the rocks thousands of feet below us. Always methodical, he’s usually patient, but you can see that he would tolerate little slacking in the classroom.
After retirement, he decided to expand his time in the field to five months a year, to map the geological structure of the Carbon Basin and eastern Hanna Basin. It only makes sense to camp in the field. Spying an old sheepherder’s wagon at a local ranch, he obtained the owners’ permission to restore it. For a man who loves broad expanses, the wagon would seem cramped. He’s six feet tall, and the wagon is barely that wide. It works just fine, he says. No space is wasted. A washbasin hangs from the interior door, and a chest provides space for his pick and other tools of the geologic trade. He calls it the Prairie Argo, a play on his given name: Jason (and the Argonauts).
Typically, Lillegraven rides an ATV to get to a more remote location and then walks for most of the day. By about 5 o’clock, the afternoon shadows make it harder to see the rock outcroppings on the sagebrush-covered ground that evidence the structures below. Back at the sheepherder’s wagon, he has a beer, washes up, and eats, usually in that order, before going to bed.
Rattlesnakes are rare, badgers more frequent. Lightning is what he fears, but he forces a stoic attitude when caught in the open. “There’s not much you can do but keep walking,” he says.
The Bigger Picture
One strong theme in the critique from both Lillegraven and nearby ranchers Reese and John Johnson is that government agencies have reviewed the project in its disparate parts, when all should be considered together to understand its total, cumulative impact.
Lillegraven made that argument after the U.S. Army Corps of Engineers announced in May 2012 that it might issue a Section 404 permit for disturbance of wetlands caused by both Saddleback Hills, the underground mine, and a surface mine to the west called Elk Mountain. The Corps determined displacement of just 1.14 acres of ephemeral stream channel within the 1,829-acre DKRW project area.
Both mines could supply DKRW’s coal-to-liquids plant. Lillegraven argued that wetlands impacts of both coal mining and the water demands of the coal-to-liquids plant must be linked and considered together.
The agency rejected the argument. Matthew A. Bilodeau, program manger for the Wyoming Regulatory Office of the Army Corps of Engineers, rejected the argument. Arch Coal of Wyoming “has the ability to deliver coal to other customers,” Bilodeau said in a June 13, 2012, letter. As such, the coal mining plan is not dependent on construction of the coal-to-liquids plant. By the same logic, said Bilodeau, the water impacts of the coal mines can be analyzed independent of the impact of the plant.
That defies common sense, retorted Lillegraven in a response to the federal agency.
Lillegraven and the Johnsons have the same quarrel with Wyoming. The state has divided jurisdiction for the coal mine and the coal-to-liquids refinery into separate regulatory oversight within Wyoming DEQ. The two projects are intimately related and should be treated as one and the same industrial project, Lillegraven said in a January letter.
“It’s an indefensible position,” say the Johnsons. They say the project should not be allowed to continue, in any way, until the federal environmental review is done.
DKRW had previously assembled a preliminary draft EIS that ran 900 pages when the company intended to seek a loan from the U.S. Department of Energy. DKRW claims that the DOE has cooled on coal projects. DKRW officials said in 2012 they were no longer actively seeking a loan guarantee through DOE, so they had to ask the U.S. Bureau of Land Management to take up the EIS instead.
Wyoming BLM officials said an EIS is required because pipelines, powerlines and other facilities related to the project cross federal lands. The delay in launching an EIS was due to the assumption that it would happen under the Department of Energy.
Attitudes in Carbon County, meanwhile, have been turning. In a sharp reversal from past actions, the county commissioners last week approved a letter that protests a delay requested by DKRW for an April 1 hearing before the Industrial Siting Council. Essentially, the letter calls for DKRW to put up or shut up.
Given his understanding of the geology of the Carbon Basin, Lillegraven sees no good coming out of any of the plans for either the underground coal mine or the refinery. He’s a careful scientist, a stickler for detail. You might say he’s careful to a fault.
And faulting is his point. The Hanna Basin, he says, has faults everywhere. That’s why he believes governmental reviews so far have let too many things fall through the cracks.
— Allen Best is a freelance journalist living in Colorado. He has written previously for WyoFile about rare earth mining, the Green River pipeline proposal, and other topics having to do with energy, water and transportation.