OKLAHOMA CITY – The state Department of Mines has requested a “standstill” appropriation from the Legislature, at least in part because of a downturn in the mining industry last year, agency director Mary Ann Pritchard told House and Senate budget writers recently.
Coal mining in Oklahoma has “collapsed,” and revenues from minerals mining fell off 12% last year due to the economic slowdown caused by the coronavirus, Pritchard related.
The Legislature appropriated $769,933 to the department for Fiscal Year 2021, which was a 4% budget reduction ($32,081) from FY 2020. However, the state allocation constituted only 20% of the agency’s $3.75 million budget for FY ‘21; the bulk of the funding came from federal grants and revolving funds, ledgers reflect.
For example, the state Department of Mines receives approximately $1.3 million annually from the Office of Surface Mining Reclamation and Enforcement, a branch of the U.S. Department of the Interior.
MOST MINING IS FOR MINERALS
Production of non-coal materials has totaled 78 million to 80 million tons over the last three years, the department reports.
“We get a fee on that,” Pritchard said.
A non-coal mining permit fee is $175, and the production fee rate is .0125% per ton of material produced, agency records show. Among the minerals mined in Oklahoma are limestone, dimensional stone, sand and gravel, gypsum, clay and shale, granite, caliche, Tripoli, salt, iron ore, and chat. As of January 2021 the Department of Mines had issued permits for 789 non-coal mining operations in all 77 counties, Pritchard said.
Three dozen of those sites are in southwest Oklahoma, state records show:
- Comanche County: 12 sites (limestone, sand, gravel, gypsum, soil and clay, fill, topsoil and select fill and select material. Select fill and select material are more compactable and can meet engineering standards for construction, a department spokesperson explained.)
- Cotton County: three sites (sand and gravel).
- Jackson County: 10 sites (gypsum, sand and gravel).
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- Tillman County: one site (sand and gravel).
- Kiowa County: six sites (limestone, gabbro, granite, soil, and crushed rock).
- Stephens County: two sites (sand and select fill).
- Jefferson County: one site (sand, gravel, loam, clay and soil).
- Harmon County: one site (halite a/k/a rock salt).
In a related matter, Pritchard said that in 2018 or 2019 Oklahoma Secretary of Energy and Environment Kenneth Wagner asked her to develop “a time-frame matrix for our processes.” Because of those efforts, the average time for processing mineral mining applications last year was cut by 56%, Pritchard said: from 230 days to 111 days.
COAL MINING AT RECORD LOW
Oklahoma’s coal production peaked at 5.73 million tons in 1981 but plummeted to a record low of about 200,000 tons mined last year, state records reflect.
Coal-fired power plants used to consume enormous quantities of coal, but because of environmental concerns and economic factors many of those plants have been converted to natural gas or have been retired.
Public Service Co. of Oklahoma, which supplies electricity to 37 cities and towns in southwest Oklahoma, decommissioned and shut down its 34-year-old Oklaunion power plant near Vernon, Texas, about a half-hour drive southwest of Frederick, last fall.
The U.S. Energy Information Administration has reported that the nation’s power sector consumed 30% less coal in the first half of 2020 than during the same period of 2019. Demand for electricity declined due to the pandemic, and natural gas and renewable energy continued to siphon off market share from coal.
“Until recent years, the major consumption of Oklahoma coal was by out-of-state utilities,” Pritchard said. Today coal is sold primary in overseas markets and spot markets, she told the legislators.
At least 11 major coal companies across the nation filed for bankruptcy by October 30, 2019. Only four companies were mining coal in Oklahoma in 2019, and two of those have ceased coal mining activities in this state, Pritchard said.
Coal reserves have been identified in an area of approximately 8,000 square miles in 19 counties in eastern Oklahoma, Department of Mines records show. “Oklahoma contains the most significant deposits of bituminous coal between the Mississippi River and the Rocky Mountains,” the agency claims. “I hope that one of these days somebody can mine some of that,” Pritchard said.
The Surface Mining Control and Reclamation Act of 1977 created two programs: one for regulating active coal mines, which includes a requirement that reclamation occur in tandem with the mining operation, and a companion program for reclaiming abandoned mining lands.
Consequently, the Oklahoma Department of Mines has oversight of mining activities that have occurred since 1977, while the state Conservation Commission has oversight of land that was mined prior to 1977.
“We have very little” land where mining activities occur today “that doesn’t get reclaimed anymore,” Pritchard said. Contractors are required to post bonds which can be forfeited to underwrite reclamation projects. Almost $104 million in reclamation bonds had been posted with the Department of Mines as of December 2020 to ensure restoration of sites where minerals were being excavated, the agency reported.
INSPECTIONS, TRAINING, EXPLOSIVES
Employees in the state Department of Mines perform thousands of inspections each year, Pritchard said, and provide safety training and testing for coal/mineral mining industry employees.
In addition, the Department of Mines monitors the purchase of explosives and regulates the usage of explosives in Oklahoma and provides blasting certification.
“We had a lot of changes” last year, she told the legislators, not only because of the coronavirus pandemic but also because “about one-third of our staff retired over the last 18 months.”