Vermont Law Top 10 Environmental Watch List 2013

Courts Block EPA Efforts to Reduce Damage from Appalachian Coal Mining

Federal judges in two cases have ruled that the Environmental Protection Agency exceeded its authority under the Clean Water Act in regulating the impacts of coal mining in Appalachia. The EPA has appealed both cases, the outcome of which could have major implications for the agency’s ability to control one of the most environmentally destructive practices in the country.

Mountaintop removal is a form of surface mining used extensively throughout Appalachia that uses explosives to remove the summits of mountains to expose coal seams. Excess rock and soil laden with toxic mining byproducts are often dumped into nearby valleys, in what are called “valley fills.” The practice has destroyed more than 500 mountaintops,[1] filled thousands of miles of streams and clear cut a million acres of highland forest.[2] Peer-reviewed studies show that mountaintop mining has serious environmental impacts, including loss of biodiversity and degradation of watersheds that mitigation practices cannot successfully address.[3]

The coal industry adopted mountaintop removal as a more efficient means of mining that requires fewer workers. Between 1973 and 2003, coal mining employment fell 40 percent[4] as massive earth-moving equipment replaced miners.[5] A study coauthored by a West Virginia University professor reports that coal mining in Appalachia costs five times more in premature deaths than the industry provides in jobs, taxes, and other economic benefits.[6]

On June 11, 2009, the Obama administration announced plans to toughen standards for mountaintop removal mining. Officials from the EPA, the Army Corps of Engineers, the Interior Department, and the White House Council on Environmental Quality announced a more rigorous environmental and legal review of pending and future permit applications. Under the Clean Water Act, the Corps of Engineers has lead responsibility for issuing permits. During the Bush administration, the corps was accused of rubber-stamping permits to dump mining waste into streams and wetlands. The Clean Water Act gives the EPA a strong oversight role in the permit process.[7] The EPA issued a “guidance” document in 2010 intended to “provide further clarification of the EPA’s roles” in coordinating with federal and state authorities.[8] At the same time, the EPA placed a “hold” on 17 permits to review their impacts and determine whether to exercise its “veto” authority under section 404 (c) of the Clean Water Act. Ultimately, after requiring additional mitigation measures, the EPA released the hold for all but one of the permits. However, the agency elected to veto the permit for the Spruce Mine, which would have been the largest new mine in Central Appalachia.

In a parallel action, the EPA issued a water quality “guidance document” establishing numerical benchmarks for conductivity as indicators of when dissolved minerals in streams pose a threat to aquatic life. Disposal of mining waste has been shown to raise salinity levels in downstream waters, causing significant impairment of water quality and interference with designated uses. The EPA instructed its regional offices to require that Clean Water Act permits include a minimum conductivity level for streams impacted by coal mining operations.[9]

Industry groups challenged both the Spruce Mine veto and the conductivity guidance in two different cases in the U.S. District Court for the District of Columbia.

Mingo Logan Coal Co. Inc. v. U.S. E.P.A[10]

In 2007, the Corps issued Mingo Logan a Clean Water Act permit for the Spruce No. 1 mountaintop coal mine in Logan County, West Virginia, allowing Mingo Logan to discharge “fill material” into stream segments. After unsuccessfully seeking modification of the Corps permit, the EPA initiated a 404 (c) action seeking to block the use of two stream disposal sites that encompassed a majority of Mingo Logan’s discharge area. Mingo Logan filed suit and the court ruled that once the corps issued the permit, the EPA lost its “veto” power. In a harshly worded opinion, Judge Amy Jackson accused the EPA of “magical thinking” in its interpretation of the Clean Water Act. Judge Jackson felt that the EPA’s position would create huge uncertainty among the regulated community if permits could be revoked “after the fact.”

Nat’l Min. Assn. v. Jackson[11]

In 2010, the National Mining Association (NMA), along with the states of West Virginia and Kentucky, challenged the EPA’s conductivity guidance in the Washington, D.C., District Court. Judge Reggie Walton rejected the EPA’s argument that the guidance was “non-binding” and cited evidence that the regional offices were in fact treating it as if it was mandatory. The court ruled that the EPA exceeded its authority under the Clean Water Act and the Surface Mining and Reclamation Act by imposing a stream water conductivity standard on permit requests for surface coal mines. Under the Clean Water Act, states may obtain the authority to issue National Pollutant Discharge Elimination System (NPDES) permits to discharge pollutants into navigable waters.[12] All Appalachian states have the EPA approval to administer NPDES permitting regimes for coal mining projects. Under the EPA’s rules,[13] states are to be given the first opportunity to determine whether discharges meet water quality standards. The EPA retains authority to review and object to permits that do not meet federal standards. By imposing the conductivity standards across the board, the EPA had “usurped“ the state’s prerogatives and overstepped its statutory and regulatory authority, Judge Walton ruled. However, the judge acknowledged that the agency could set binding water quality standards for conductivity though the formal rulemaking procedures of the Administrative Procedure Act.

Both cases have been appealed to the D.C. Circuit and will be argued in 2013. There is a good chance the Circuit Court will overturn the decision in the Mingo Logan case because the trial judge simply got the law wrong. The statute authorizes a veto whenever the EPA administrator “determines, after notice and opportunity for public hearings, that the discharge of such materials into such area will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas (including spawning and breeding areas), wildlife, or recreational areas.” Nothing in that language says or suggests that the EPA must exercise its veto before the permit is issued.

The outcome in National Mining Assn. is harder to call. The EPA’s best argument may be that the guidance is not a “final agency action” that is “ripe” for judicial review under the Administrative Procedure Act; and that any challenge must await the application of the guidance in a site specific case where actual economic harm to a regulated party can be demonstrated. Alternatively, the EPA could follow Judge Walton’s suggestion that it pursue a rulemaking to adopt the conductivity guidance as a federal water quality standard under section 303 of the Clean Water Act.

The broader question is the fate of mountaintop removal mining in Appalachia. Two economic forces are combining to reduce demand for Appalachian coal. One is the boom in shale gas development by means of hydraulic fracturing, which has made gas-fired electricity much cheaper than coal, at least for now.[14] The other is the diminishing coal reserves that are economically recoverable in Appalachia and the shift of industry investments to the Powder River Basin of Wyoming and Montana.[15] As part of a settlement of a Clean Water Act citizen suit, Patriot Coal, the second largest coal producer in central Appalachia, just announced that it would be phasing out mountaintop removal mining entirely. Thus, it would appear the era of blowing up mountains to exploit diminishing coal deposits may be winding down, and that is good news to the people of the communities that have been hard hit by this destructive practice.