- Associated Press - Thursday, February 11, 2016

HILLSBORO, Ill. (AP) - Some central Illinois residents are asking state regulators to reject a proposed expansion of a coal mine where an underground fire has smoldered for nearly a year.

Opponents of Foresight Energy’s planned Deer Run Mine expansion testified at a Thursday public hearing in Hillsboro that the company’s inability to quell the ongoing fire should lead the Illinois Department of Natural Resources to deny the request. The St. Louis-based company ceased mine production in early January because of the elevated carbon monoxide levels below ground as well a depressed market. It also responded by cutting 100 jobs and says it’s uncertain when - or if - production will resume.

“The coal market has been in a free fall,” said Mary Ellen DeClue of Litchfield, who like the 10 other speakers at the hearing urged the IDNR to deny Foresight Energy’s request for a 7,731-acre expansion into areas unaffected by the fire. “An expansion cannot be justified simply on the basis of helping a coal operator’s financial portfolio.”

DeClue was one of several speakers to raise concerns about the long-term fiscal health of Deer Run’s owners as the coal industry struggles amid tighter federal regulations and an industry shift toward cheaper natural gas. Five major coal companies have sought bankruptcy protection since 2014, while Foresight Energy is negotiating with lenders who seek repayment of $600 million in bonds amid a legal battle over the company’s planned acquisition by Murray Energy Corp.

On Thursday, industry leader Peabody Energy Corp. reported a fourth quarter 2015 loss of $518 million.

The federal Mine Safety and Health Administration has said the underground fire - a not uncommon occurrence in mines- poses no immediate threat, and a spokesman for the state agency indicated the fire likely won’t have a bearing on the permit expansion review. Company officials declined to discuss their efforts to quell the ongoing fire or the expansion request. Several Deer Run Mine officials attended the hearing but did not address the crowd.

Deer Run, which opened in 2011, operates as a longwall mine, a mechanized process in which enormous shearers slice coal from earthen panels that can stretch for several miles. The technique allows for greater coal extraction with fewer workers than traditional “room and pillar” mining while also causing the surface land above to sink by several feet.

State and federal laws require coal companies to compensate landowners for subsidence. But for mine expansion opponents, the possible long-term damage - cracked basement foundations, undulating roads, flooded farm fields and respiratory ailments caused by wind-blown coal dust - far outweighs the sorely needed economic jolt the industry provides to a region with deep mining roots.

The economic struggles are clear in Hillsboro, a town of 6,200 residents about 65 miles northeast of St. Louis where fast-food outlets have replaced small businesses, and a state prison is among the top local employers. Montgomery County officials say they have received more than $8 million in royalty payments since Deer Run opened - an amount that exceeds the county’s annual general fund.

“We’re not opposed to coal. The county needs coal,” said Bill Schroeder, a retired engineer and member of the statewide group Citizens Against Longwall Mining. “Coal is a necessity. But this is not the correct method in our area.”

“If they can’t do this right, what does that say about the rest of their operation?” he added, referring to the lingering fire.

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Follow Alan Scher Zagier on Twitter at http://twitter.com/azagier

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