Appeals court rules against CONSOL’s Fola Coal unit over clean water issues

A three-judge panel at the U.S. Fourth Circuit Court of Appeals on Jan. 4 rejected an appeal from the Fola Coal unit of CONSOL Energy (NYSE: CNX) over alleged violations of a Clean Water Act permit at a mining operation in West Virginia.

Several environmental groups, including the Ohio Valley Environmental Coalition, brought this action, alleging that the company had violated the Clean Water Act and seeking appropriate injunctive relief. After a bench trial, the district court found that the company had indeed violated the act and ordered it to take corrective measures. The company appealed, principally asserting that its National Pollution Discharge Elimination System (NPDES) permit shields it from liability.

Said the Jan. 4 court ruling: “Because the company did not comply with the conditions of its permit, the permit does not shield it from liability under the Clean Water Act, and the district court properly ordered appropriate remedial measures. Accordingly, we affirm the judgment of the district court.”

In 1996, Fola Coal obtained a West Virginia NPDES coal mine permit to discharge into Stillhouse Branch, a tributary of Twentymile Creek and a waterway adjacent to Fola’s surface mining facility in central West Virginia. Fola applied for and received a renewed NPDES permit in 2009. The provisions of that permit lie at the heart of this case.

In March 2013, theenvironmental groups filed this action under the Clean Water Act’s citizen suit provision. They alleged that Fola violated 5.1.f, a West Virginia regulation incorporated in Fola’s permit. At the time Fola’s renewal permit was issued in 2009, 5.1.f provided: The discharge or discharges covered by a WV/NPDES permit are to be of such quality so as not to cause violation of applicable water quality standards adopted by the Department of Environmental Protection.

The plaintiffs alleged that Fola violated 5.1.f by discharging ions and sulfates in sufficient quantities to cause increased conductivity in Stillhouse Branch, which resulted in a violation of water quality standards.

In response to the Coalition’s allegations, Fola pointed out that it disclosed the nature of its discharges when it applied for the 2009 renewal permit. At that time, Fola had stated that its discharges would include ions and therefore be highly conductive. Despite this disclosure, the West Virginia Department of Environmental Protection (WVDEP) set no specific limitations on conductivity in Fola’s permit. By declining to do so, Fola asserted, WVDEP made an affirmative choice not to impose any limit on conductivity. According to Fola, it followed that 5.1.f did not obligate Fola to limit the conductivity of its discharges even if that conductivity resulted in a violation of water quality standards. Fola reasoned that, because it complied with the effluent limits expressly set out in its permit, the permit shielded it from all liability under the Clean Water Act.

After a bench trial, at which the district court considered mountains of expert testimony, reports, and charts, the court issued a thorough written opinion. The court found that 5.1.f constituted an enforceable permit provision that required Fola to refrain from violating West Virginia’s water quality standards, including narrative water quality standards.

The Jan. 4 ruling said in part: “We must reject Fola’s attempts to transform the district court’s detailed fact-finding into rulemaking. After carefully assessing the record before it, the district court found as a fact that that a failing Index score indicated an impaired stream and that Fola’s mining caused the increased conductivity that resulted in that impairment. These findings are well supported by the record evidence. None are clearly erroneous.”

The ruling concluded: “In sum, Fola’s arguments as to why the district court erred in finding that Fola violated its permit, like Fola’s arguments as to the permit’s reach, uniformly fail.”

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.