Appalachian coal industry pursues suit against EPA coal permitting

Around the same time as a major victory against the U.S. Environmental Protection Agency in federal court, the state of West Virginia filed in the same court a brief in another lawsuit against EPA over its more stringent enforcement of Section 404 of the Clean Water Act.

A federal judge on March 23 reversed the EPA’s January 2011 ruling that revoked Mingo Logan Coal‘s Spruce No. 1 Section 404 permit in Logan County, W.Va. The permit was issued by the U.S. Army Corps of Engineers in 2007 after the company, which is a unit of Arch Coal (NYSE:ACI) worked 10 years to address environmental concerns in part expressed by the EPA. The Spruce No. 1 project, at that point the largest surface coal mine permit permitted by the West Virginia Department of Environmental Protection (DEP), at over 3,113 acres, had been the target of a late 1990s federal lawsuit filed by environmental groups.

EPA, under pressure from environmental groups and with a certain amount of cooperating agency authority in the Corps permitting process, vetoed a slimmed-down version of the permit as not being stringent enough. Ruling in favor of Mingo Logan on March 23, Judge Amy Berman Jackson out of the U.S. District Court for the District of Columbia concluded that the EPA did not have the authority to invalidate an existing permit, and that the EPA had exceeded its authority under the Clean Water Act.

In a parallel case, West Virginia Gov. Earl Ray Tomblin along with DEP Secretary Randy Huffman announced March 26 the filing of the final brief on the merits in their lawsuit against EPA and the Corps over federal policies that have hindered the issuance of new mining permits in the Appalachian Region.

Two years ago, the DEP, the National Mining Association and others filed suit against the EPA and the Corps, claiming the “Enhanced Coordination Process” lately being used to review dozens of Section 404 valley fill permits, and also the EPA’s 2010 Interim – and now Final – Guidance Document for issuing water quality permits, violated the Clean Water Act, the 1977 Surface Mining Control and Reclamation Act and the Administrative Procedures Act.

“This lawsuit is about the rights of our state to regulate itself within the scope of the existing federal and state laws,” Tomblin said in the March 26 statement. “The EPA has overstepped its bounds, taken that right away and we’re simply fighting to get it back. Just last week, a federal judge reversed the EPA’s decision on the Spruce No. 1 mine concluding that the federal agency did not have the authority to change course and exceeded its authority under the Clean Water Act. I believe that ruling further clarifies our position in this case: the EPA has gone too far.”

The brief was filed in the U.S. District Court for the District of Columbia. The case began under former Gov. Joe Manchin, now a U.S. Senator, and has been aggressively pursued under Tomblin.

West Virginia is the nation’s second-largest coal producing state. Various new EPA permitting policies have restricted coal production in the state, particularly from surface mines, and made mining generally more expensive to perform. That has caught the attention of coal-consuming power generators who are concerned about coal supply stability and pricing from the Central Appalachian region.

Plaintiffs won first legal round in 2011

Last year, U.S. District Judge Reggie Walton ruled in favor of the DEP and the state in their challenge to the EC Process. Walton said that by using the EC Process, the EPA had exceeded its statutory authority under the Clean Water Act because the Corps is the principal permitting authority for Section 404 permits. The court also held that the EPA had violated the Administrative Procedures Act by effectively amending the Section 404 permitting process by conferring additional reviewing authority on the EPA through the EC Process without engaging in notice-and-comment rulemaking. The court ordered the EC Process to be set aside, allowing Section 404 permits to return to normal processing.

Still pending in the District Court is the state’s challenge to the EPA’s Final Guidance Document, which was issued in July 2010. The state claims the Guidance Document is the EPA’s attempt to promulgate water quality standards outside of the normal rule-making procedures. The EPA has used the document to impose conductivity and other restrictive standards to water quality permits, delaying the issuance of permits throughout Appalachia. A hearing on the state’s challenge to the Guidance Document is scheduled for June 1.

Tomblin praised Judge Walton for his previous ruling in favor of West Virginia and its mining industry. “I expect a similarly favorable result in this second half of our challenge to the EPA,” Tomblin said. “The EPA continues to exceed the authority granted to it by Congress in regulating water quality in the Appalachian Basin and it must stop.”

Huffman said that drafting a water quality permit for coal mining that requires EPA approval is a grind. “But even more frustrating is that we’re trying to hit a moving target” he added. “We’re recognized by the EPA as having one of the best permitting programs in our region, but the EPA’s actions don’t reflect that.”

EPA, plaintiffs square off in court arguments

The brief in question, lodged with the court on March 22, was jointly filed by the National Mining Association, the DEP, the Kentucky Coal Association, the Kentucky Energy and Environment Cabinet and the coalfield city of Pikeville, Ky.

“Just as they have done throughout this litigation, the Federal Defendants seek refuge in the carefully crafted words of agency documents (here, the Final Guidance) rather than address the practical effects of those words on state governments, the regulated community, and the governing legal framework,” said the March 22 brief. “They again seek to avoid judicial review with a barrage of arguments on finality, ripeness, and standing. Thus, Plaintiffs must once more present to this court the words of those affected by EPA’s actions. Those declarations, submitted with this response to counter defendants’ jurisdictional attacks, make clear that just as the Interim Guidance was final, binding, and ripe, so too is the Final Guidance, and it is causing redressable injury to plaintiffs.”

EPA on Feb. 23 had filed its memorandum in opposition to plaintiffs’ joint motion for partial summary judgment and in support of its own cross-motion for partial summary judgment in this matter.

“EPA issued the Guidance to its regional offices in Appalachia on July 21, 2011, to provide important information concerning their review of draft permits and permit applications required by Sections 402 and 404 of the Clean Water Act (‘CWA’) in connection with Appalachian surface coal mining operations,” said the EPA memorandum. “The purpose of the Guidance is to clarify EPA’s role in the exercise of its existing authority to coordinate with other federal agencies and with states in the review of draft permits and permit applications, and to assure more consistent, effective and timely EPA review of draft permits and permit applications. The Guidance is a statement of EPA’s current policy, based on the best available science. It is not a rule; it does not establish any new standards or requirements; and it is not binding on EPA, permitting authorities, or permit applicants.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.