Ky. Energy and Environment Cabinet Response to NOI re: Frasure Creek Mining, LLC

The Cabinet was notified by attorneys representing various environmental organizations at 10:00 am Monday, Nov. 17, 2014 of a Notice of Intent (NOI) to sue Frasure Creek Mining, LLC and Trinity Coal Corporation, alleging violations reported on Discharge Monitoring Reports (DMRs) to the agency.

The Cabinet had previously initiated enforcement action against Frasure Creek that ultimately resulted in a Consent Judgment being filed with Franklin Circuit Court in December 2010. That action was opposed by the same environmental organizations that sent the NOI today and the action is still pending in Franklin Circuit Court.

In light of the litigation and in order to establish a formal enforcement mechanism against Frasure Creek to remedy ongoing violations, the Cabinet subsequently initiated another enforcement action against Frasure Creek that resulted in the entry of an Agreed Order in April 2013. The Order required a corrective action plan by Frasure Creek to resolve the violations, assessed a civil penalty, and established stipulated penalties in the Agreed Order for any subsequent violations that may occur on DMRs submitted to the agency. The April 2013 Agreed Order was also opposed by the same environmental organizations and is also pending in Franklin Circuit Court while the agency continues to enforce the requirements contained therein.

The Division of Enforcement within the Cabinet has been monitoring compliance with the April 13, 2013 Agreed Order with Frasure Creek and initiated an internal compliance review in January 2014 that has identified violations as submitted on DMRs to the agency. Administrative action on those violations is ongoing and is pending within the agency.

Additionally, Frasure Creek Mining, LLC, was the subject of an involuntary bankruptcy petition filed in February 2013 by other creditors of the company.  As part of the bankruptcy process, all of Frasure Creek’s mining equipment was sold at auction and a reorganization plan entered by the bankruptcy court in November 2013.  The reorganized company was placed under the requirements of the previous orders in addition to orders with the cabinet’s Department for Natural Resources.  Under those orders, Frasure Creek performed some reclamation work and posted new reclamation bonds in the amount of $7.4 million. DNR has continued to cite violations by the company as they have occurred and those are in the administrative enforcement process for those violations.

Contrary to inaccurate and inflammatory statements directed at the Cabinet in the NOI, the agency has been actively monitoring compliance with Frasure Creek and other coal mining operations in Kentucky. Since 2011 the Division of Enforcement has reviewed approximately 179,000 DMRs involving 78 coal companies and over 2,200 mining permits, assessed civil penalties in excess of $3,697,000, and has entered into 67 enforcement settlements with coal companies in Kentucky. The agency has and continues to proactively review and take appropriate enforcement actions to resolve violations identified during the inspection and review of coal mining operations.