Stand Up To Coal

Sunrise Coal Mine, Carlisle, Indiana

Examining Sunrise Coal’s profit motive may help us see more clearly how Sunrise Coal would operate in our community and why citizens insist on preventing mining here.

A coal company’s general business model is to mine coal as efficiently and cheaply as possible while maximizing the amount of coal it can sell to its customers at a contracted price.

Of course, to make money, Sunrise has many expenses and many “vendors.” The only guarantees that Sunrise provides are in the contracts it makes with its customers and vendors. We know that Sunrise has many contracts with individual landowners for their mineral rights. In most cases, these were negotiated between a corporation and unrepresented landowners.

Sunrise also wants to contract for potable water and sewer with Homer for a gain up to a maximum of about $50,000 per year in revenue to Homer.

Sunrise does not make any contractual guarantees for jobs, residence growth, or business growth. Considerable evidence from other Illinois mining communities indicates that these vague promises don’t come true.

Also, Sunrise has no financial incentive to take care of our natural resources or local villages. And Sunrise has no financial incentive to leave the surface facility and mine area clean when it leaves. History has shown that is how mining companies operate – Murdock is a perfect example. The coal industry itself states that mining Illinois coal is only profitable because regulations are loosely enforced or ignored. Sunrise plans to store slurry from washing coal outside of Homer. Slurry contains mercury and arsenic. It is toxic and can contaminate our local drinking water.

As for employees, another large expense, Sunrise has a documented history of cutting corners on safety. According the Mine Safety and Health Administration, between 2006-2010, Sunrise paid nearly $1,000,000 in safety fines to the federal government. If there were a major accident at the Bulldog Mine, how would that benefit our community?

Some have stated that because a mine is coming, Homer will benefit. Homer is the first choice for water not because Sunrise wants to help the town but because it is the cheapest source. If Sunrise gets its water somewhere else, it will cost considerably more, both in terms of money and time.  Every opposing move that causes Sunrise to spend more money and time decreases the likelihood of the mine being financially viable because the expenses become higher compared to the risk and the market time window.

No one questions that it would be great to have a large industry, such as the potential Toyota plant in Fithian a couple of years ago, come to our area.  However, why should our community court an industry that has a finite life of 20-30 years and leaves behind environmental damage that takes generations to repair?

We need to make strategic decisions, not decisions under pressure from Sunrise. We don’t have to sell our water to just any company that wants to locate outside our city limits. We can decide ourselves which direction to grow, about which industries to attract and entice. We can decide whether we want to become a mining town with a huge slurry impoundment sitting outside our town forever. Now is the time to think about which kinds of industries we want to save our water for.

Worse, mining would damage the largest industry that we already have – agriculture. Agriculture employs many of our residents. It has been around for generations and will be around for generations to come.

Unfortunately, every service we agree to provide to a mine makes it one step closer to becoming a reality. We want the trustees and mayor of the Village of Homer to realize that real and lasting benefit to the Village of Homer and the surrounding area is unlikely to flow from mining and processing coal. We ask the trustees not to approve an agreement to sell water to Sunrise.

Sincerely,

Jonathan Ashbrook, Homer

Charles Goodall, Sidell

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Submitted to the Village of Homer January 25th, 2013

Deal faces significant hurdles and would open Homer ratepayers to potential liability

Homer, Il. – On Friday, Prairie Rivers Network and local residents concerned about Sunrise Coal’s proposed mine in southwest Vermilion County released memoranda and letters that have been circulated between their attorneys, the Village of Homer, and Sunrise Coal. The memo’s regarding the legality of the sale have been made available here for the benefit of the public:

• Memo from Homer’s attorney
• Memo from Prairie Rivers Network and local residents 
• Memo from Sunrise Coal 

“We want the residents of the Village of Homer and the community to be aware that the sale of water and providing sewage hookup has numerous potential legal ramifications that could haunt the village for years,” explained Keith Rohl, a rural Homer resident and farmer. “People need to be informed.”

Together, the documents raise serious questions about the legality of the water sale, and paint a cautionary picture of the risks and liabilities the Village may be exposed to as a result of a deal to sell water to the proposed coal mine.

“There does not appear to be express statutory authority for this arrangement, where the primary purpose of the additional wells and facilities would be to furnish water to Sunrise Coal Company, a non-resident located a substantial distance (6 +/- miles) from the Village and not within the waterworks system operated by the Village,” explained Paul Hendren, attorney for the Village of Homer, in his initial memo submitted on September 10^th.

“The only specific statutes that authorize the sale of water outside a municipality’s limits refer to ‘particular localities’ and ‘specified areas’ requesting service. The Village is not contemplating sales to localities or areas, but instead to a single, non-resident commercial entity,” affirmed Chad Beckett, attorney for Prairie Rivers Network and several local residents. “The absence of clear authority to sell water to Sunrise Coal under the circumstances contemplated still leaves that action open to legal challenge.”

Both attorneys also highlighted numerous other potential risks and liabilities that the Village could face if a water sale is approved. These include liability for damages to neighboring groundwater or surface water users and the cost of any associated litigation.

Additionally, both attorneys pointed out that the Sunrise’s ability to pay could change in the event of a bankruptcy, which could put the Village at risk of catastrophic financial loss if Sunrise Coal does not provide sufficient up-front payment to complete the project.

“As the preliminary report of Village Attorney Paul Hendren makes clear, there are literally dozens of ‘known unknowns’ that must be determined,” explained Mr. Beckett, in his memo to the Village of Homer. “The Village has better things to do than to worry about the repercussions of this non-essential, non-residential use of precious resource outside of its municipal boundaries. The request by Sunrise Coal for more than half a million gallons of water per day can (and should) simply be rejected.”

While offering no recommendations, Mr. Hendren similarly cautioned that, “It seems possible that this project is so substantial, costly, controversial and difficult that it may interfere with many other Village staff and projects which would impose a cost that would be hard to measure.”

At the meeting of the Homer Village Board on October 8^th, the Homer Village Board approved a reimbursement agreement with Sunrise Coal to provide up to $50,000 towards retaining a municipal utility legal expert to provide additional input on the question of the sale’s legality. Based on that information, Village Board members have indicated they will decide whether or not to proceed. However, local residents have called for the opportunity to provide input before any decisions are made.

“Considering the scope of Sunrise’s request for water, and the potential impact it may have on the area’s water resources, the Village Board needs to proceed cautiously to ensure that Village residents aren’t left on the hook to deal with unintended consequences,” said Brian Perbix, an organizer with Prairie Rivers Network. “Residents of the Village and surrounding areas should have the opportunity to decide whether or not the water sale should move forward.”

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Reproduced with permission from Prairie Rivers Network, a not-for-profit clean water advocacy group that works to protect Illinois’ rivers and streams for people, fish and wildlife.