Hearing Highlights EPA Overreach Impacts on Mining in U.S. & Appalachia

Press Release

Water Resources and Environment Subcommittee Chairman Bob Gibbs (R-OH) and members of the Transportation and Infrastructure Committee today urged a common sense, balanced approach to federal regulation of coal mining activities, rather than the heavy-handed federal regulatory overreach that stifles economic growth, threatens jobs, and ignores the proper rulemaking process.

The Subcommittee began a two-part series of hearings on recent Environmental Protection Agency (EPA) policy decisions affecting coal mining, and the impacts of the agency's actions on jobs and the economy of Appalachia.

"EPA is clearly ignoring the Clean Water Act and other laws as it relates to surface mining activities in Appalachia," said Gibbs. "EPA's continued imposition of interim guidance, interim rules, draft policy or reinterpretation of policy has led to uncertainty regarding actions taken by state and federal regulatory bodies.

"While the President and his Administration talk a good game about job creation and removing unnecessary governmental burdens on business, in reality, the Environmental Protection Agency is crippling economic growth with little or no benefit to the environment," Gibbs said.

Coal mining is critical to the United States and in particular the Appalachian region. Fifty percent of the power generated domestically comes from coal, and 33% of the coal used in the United States comes from Appalachia.

Recent extra-regulatory actions by EPA, which have significant consequences for mining in the United States and the Appalachian region, have raised serious questions about the extent of the agency's authority.

EPA recently revoked a permit for the Spruce No. 1 Surface Mine in West Virginia, three years after the permit was issued with EPA approval. "Even though the EPA is very much involved in the permit application process along with the state, the Corps of Engineers, and other federal agencies, the EPA is now revoking permits that have already been issued," Gibbs said. "This is not legal."

EPA also recently released so-called "guidance," which it is essentially using as de facto law, that substantively changes how the Clean Water Act applies to surface mining. This action is in violation of the proper, transparent rulemaking process as dictated by the Administrative Procedure Act.

Teresa Marks, Executive Director of the Arkansas Department of Environmental Quality, testified today on behalf of the Environmental Council of the States (ECOS) and all 50 states' environmental agencies.

Marks testified, "ECOS does not believe that EPA has ever attempted to require states to implement "interim guidance' until recently." She described the impossible position in which states are placed by EPA's action. "Requiring states to implement interim guidance puts each state in the position of deciding whether it will break federal law or state law," said Marks. "At the very least, this should be a good enough reason why a federal agency should never ask a state to implement something that is not final."

Dr. Leonard Peters, Secretary of Kentucky's Energy and Environment Cabinet, who holds a doctorate in chemical engineering, provided a practical example of how EPA's circumvention of the rulemaking process has impacted permitting activities in Kentucky. Peters explained, "Between December 21, 2009, and March 18, 2010, EPA issued comment letters on 29 individual draft Clean Water Act 402 coal permits proposed by the Cabinet's Division of Water. In response to EPA's comments and after extensive discussions with EPA, the Division of Water included additional requirements in the draft permits. EPA did not object to the revised draft permits, and the permits were issued beginning in March 2010. Then, on April 1, 2010, EPA issued its "Final Interim Guidance' for Appalachian coal mining operations in six states seeking to establish new Clean Water Act permitting requirements regarding in-stream conductivity. A little more than a month later, EPA issued Interim Objection letters on 11 of Kentucky's Clean Water Act 402 coal permits drafted by the Division of Water, despite the fact that these permits were drafted in the same manner as those permits issued immediately prior to the April 1 guidance that were deemed acceptable by EPA at that time."

Harold "Hal" Quinn, President of the National Mining Association, spoke about some of the economic implications of an overly zealous regulatory approach that fails to recognize its economic impacts, particularly on lower income families and jobs. "The collateral damage goes beyond the immediate supply chain and spreads to those who benefit from low-cost coal energy," Quinn said. "Households earning less than $50,000 -- 50 percent of U.S. households -- spend as much as 20 percent of their after-tax income on energy, nearly twice the national average.

"More expensive electricity further erodes their economic position and spending power for such things as food, housing or health care."

Quinn also stated, "We should all remember that any product that can be made today in the USA can be made elsewhere and imported. Kentucky, Ohio, Pennsylvania and West Virginia are industrial centers for automobile, chemical, steel and aluminum production -- all energy intensive sectors. Access to low-cost and reliable coal electricity keeps them globally competitive by offsetting higher labor and regulatory costs."

Witnesses also described EPA's recently implemented, extra-regulatory Enhanced Coordination Process, which created a new level of EPA review and has served to indefinitely delay some permits.

Michael Gardner of Oxford Resources Partners provided an example, describing the process for obtaining what is known as an NWP 49 permit, for which Oxford applied in 2008. According to Gardner's testimony, "It wasn't until March 5, 2010 that EPA finally authorized the Kaiser-Mathias permit. This was 6 months after our plea to EPA Administrator Jackson and after nine months of EPA-Enhanced Coordination of a permit that should never have been on EPA's radar to begin with; and a permit decision, which was quite literally a no-brainer. Members of the Subcommittee, that's EPA's Enhanced Coordination.

"But it doesn't stop there. Three days later, EPA published a Press Release taking credit for an 80% reduction in impacts to streams and a 70% reduction in impacts to wetland, all ostensibly as a result of Enhanced Coordination. The only problem with this self-serving Press Release was that the starting points for these claimed reductions are completely fabricated. Oxford could not have submitted an NWP 49 had it proposed the kind of impacts for which EPA claimed a reduction. And there was no mention in its Press Release that the application was for an NWP 49 permit, preauthorized for this type of mining. So much for transparency in EPA-Enhanced Coordination," said Gardner.

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