Ben Binninger said his company has already spent more than ten years and around $20 million looking for potash in San Juan County. It is an investment in which he believes can result in a big return.
If the right grade of potash is found and his company K2O Utah is able to develop, he said that they will be able to produce two million metric tons per year. He said it would add 190 jobs that would generate $12 million a year in local income during a 25 to 50-year operation. Binninger estimated that the sales and use tax from a fully operational plant would be $578,000; but new tax revenue for San Juan County could be near $18 million.
While some specialists would be required for aspects of the operation and building of the site, Binninger said the majority of the jobs could be held by local residents.
There are a few hurdles for the company to overcome: Acquiring a Bureau of Land Management permit to drill exploration holes and waiting for the results of a BLM Master Leasing Plan (MLP) to find out if they could acquire a lease to mine.
The leasing area is also within the 1.4 million-acre Canyonlands National Monument proposed by the Outdoor Industry Association.
Potash Minerals Limited, an Australian company, owns 90 percent of K2O.
K2O Utah has already drilled exploration holes on state land near Hatch Point south of Moab. They are now waiting for permission to drill four exploration holes on Bureau of Land Management (BLM) land in the 100,000-acre area near Highway 191 and the Needles Overlook Road. BLM land makes up the majority of site, with 91,000 acres. The other 9,000 acres are managed by Student Institutional Trust Lands Administration.
A BLM environmental assessment of the project is now available to the public for comment. The comment period will close Friday.
“Getting these rights to drill the exploratory holes has been extraordinarily difficult and slow,” said Binninger, chief executive officer of K2O. “It has taken us a considerable amount of time just to get the prospecting permits.”
During an exploration drill, crews work to pull a core from about a mile deep in the earth.
“Then we analyze and close the hold back up. We restore the soil and restore the site. It is as though we were never there,” he said.
K2O would hire twenty to thirty people to do the four exploration holes. The rig would run 24 hours a day. It should take about six months to complete.
“If we find what we want we may do some further exploratory drilling, or if we have sufficient data, we will go to the government for a preference lease,” Benninger said. “It would take years to get the lease.”
Lynn Jackson, a potash consultant in the Moab area, said that companies exploring potash development know that they may never be able to develop, even if they find viable deposits due to the Master Leasing Plan (MLP) now being developed by the BLM.
“They can’t even consider development until the MLP is completed,” Jackson said.
Jackson is working with American Potash, which is exploring potash development north of Moab.
“They (BLM) came to an agreement with K20 and American Potash: ‘You can explore but have no guarantee,’” Jackson said.
The BLM Canyon Country District, which has jurisdiction over both the Monticello and Moab offices, completed a comprehensive Resource Management Plan (RMP) in 2008. Since then, the BLM has determined additional planning and analysis are necessary for considering new oil and gas leasing near national parks. Potash was added to the scope of the MLP due to interest in the area expressed by multiple mineral companies.
In May 2010 the BLM implemented leasing reforms to provide the public with increased opportunity for participation and to require a more thorough environmental review and documentation process, said Kaveh Sadeghzadeh, the former BLM Utah state external affairs chief.
“The development of MLPs, both here in Utah and in other states, is part of this much-larger package of oil and gas leasing reforms,” he said. “The December 2008 oil and gas lease sale was an impetus for those reforms; and the 2008 RMPs were an issue included in litigation associated with the December 2008 sale in Utah.”
Tim DeChristopher, an activist and co-founder of the environmental group Peaceful Uprising, protested the BLM Canyon Country District oil and gas lease sale in December 2008. When the parcels were not deferred, he bid $1.8 million he did not have for 14 parcels totaling 22,500 acres. In 2011 he was sentenced to two years in prison. He is now completing his time in a half-way home in Salt Lake City. He is scheduled to be released on April 21, 2013.
The Moab area plan is the largest master leasing plan in the country, encompassing 738,000 acres in Grand and San Juan Counties near Canyonlands National Park.
No new mineral leases will be allowed in the areas under review until the MLP process is completed. A draft should be available next summer. A final plan may be in place the summer of 2014, said Rock Smith, Moab BLM field manager.
Benninger believes the wait and investment it worth it.
“The US uses about 10 million tons of potash a year. Over 80 percent is imported, primarily from Canada,” Benniger said. “We’re trying to develop a mine that would partially meet the US requirements.”
Potash is used for adding potassium to fertilizer to improve water retention, yield, nutrient value, taste, color, texture, and disease resistance of food crops.
Benninger and K2O plan to use a method call “solution mining”.
“Basically what we want to do it put hot water down the ground, bring up the salt and put the table salt back,” Benninger said.
He said that his company would use non-potable water is already on site at approximately 1500 feet below the surface.
The salt is then separated from the solution through a process of heating, cooling, centrifuging and crystallizing. The water is removed from the solution. It is then recycled with the salt in the mine hole. Any remaining salt would be sold.
There would be no evaporation ponds like there are now at Intrepid Potash now operating at the end of State Route 279.
“Since the water and waste salt are returned to the ground, mine closure is ongoing during production,” Benninger said.
John Weisheit, conservation director of Living Waters, a Moab-based non-profit, is concerned about the water issues related to potash mining.
“The potash is there, but the water to get it isn’t there,” Weisheit said. “You need one as much as the other. They will deplete that groundwater.”
He said residents that live near Hole in the Rock, Wilson Arch and Looking Glass Rock will have to drill deeper wells and the water will be gone.
He isn’t concerned only about K2O’s proposed project. He said that there are up to five different potash proposals on either side of the Colorado River.
“If they are all permitted and they all start taking water, the river doesn’t have anything left to give. Demand is higher than supply. The resources aren’t there,” Weisheit said. “The BLM needs to find out now how bad it’s going to be. In the meantime it is all speculative. We shouldn’t be giving them a permit until they can prove they’re not damaging the water.
Weisheit is also concerned about views from national and state parks.
“Imagine you are at Dead Horse Point, or Grand View Point and you’re watching the sunset and enjoying the moment. When it gets dark you see the lights on the potash plants dotting the landscape,” Weisheit said. “This isn’t the only one proposed. There are a bunch of them.”
