Methodology for quantifying uncertainty in coal assessments with an application to a Texas lignite deposit

A common practice for characterizing uncertainty in coal resource assessments has been the itemization of tonnage at the mining unit level and the classification of such units according to distance to drilling holes. Distance criteria, such as those used in U.S. Geological Survey Circular 891, are still widely used for public disclosure. A major deficiency of distance methods is that they do not provide a quantitative measure of uncertainty. Additionally, relying on distance between data points alone does not take into consideration other factors known to have an influence on uncertainty, such as spatial correlation, type of probability distribution followed by the data, geological discontinuities, and boundary of the deposit. Several geostatistical methods have been combined to formulate a quantitative characterization for appraising uncertainty. Drill hole datasets ranging from widespread exploration drilling to detailed development drilling from a lignite deposit in Texas were used to illustrate the modeling. The results show that distance to the nearest drill hole is almost completely unrelated to uncertainty, which confirms the inadequacy of characterizing uncertainty based solely on a simple classification of resources by distance classes. The more complex statistical methods used in this study quantify uncertainty and show good agreement between confidence intervals in the uncertainty predictions and data from additional drilling.