Coal Tattoo investigates: Is there a MTR permit crisis?
To hear folks from the coal industry — and their politician friends — talk, you’d think that the Obama administration’s move to more closely review mountaintop removal permits has brought coal production across Appalachia to a halt — or at least driven mine operators to the brink of thousands of layoffs and economic ruin.
Take state Senate Majority Leader Truman Chafin, D-Mingo, who told a statewide radio audience in West Virginia yesterday:
We’re going to see layoffs like you’ve never seen before real soon.
Or state Senate President Earl Ray Tomblin, D-Logan, who warned the U.S. EPA in a letter last month:
It is of the utmost importance that this situation be resolved not in a matter of weeks, but days.
Such statements make local political leaders sound pretty tough — slapping around some bureaucrats in Washington, D.C., is always an easy thing for these guys to do.
These comments also fuel fear among hard-working coal miners and their families. They put pressure on regulatory agencies to back down, or make much quicker — and perhaps less thoughtful — decisions than a calmer, more reasoned debate might produce. They’ve helped the coal industry get out huge numbers of people at public meetings, and generated an atmosphere that is hardly healthy for a real discussion of mountaintop removal’s future.
But are these statements true? Is there a mountaintop removal permit crisis? Not if you believe what executives from the region’s largest publicly traded coal producers are telling industry analysts and corporate shareholders.
Over the last two weeks, coal company officials have repeatedly told stock analysts and their shareholders that they’re in pretty good shape for another year, maybe two … seems like plenty of time for everyone to sit down and come up with a workable solution without scaring workers and threatening environmental activists.
Take Massey Energy President Don Blankenship, for instance. During a conference call last week with coal industry stock analysts, Blankenship was asked about the impact of U.S. EPA’s permit reviews on Massey Energy operations:
They are very safe in detail in ‘10. In ‘11 if we had a issue with permitting on a surface mine, we would go to more deep mines … We will be and keep ourselves in a position to make those volumes or more irregardless of which way the permitting issue evolves.
But certainly if we get a lot of pressure from the permitting side that continues on into ‘11 we will begin to get restricted to some extent and we’ll probably see a little bit higher cost on surface mining because of the placement of the material and perhaps move a little bit more to deep mining.
That’s not to say there aren’t issues … but are they as serious as the National Mining Association and state-based coal lobby groups are trying to make it sound?
Mike Carey, president of the Ohio Coal Association, had this to say about EPA’s permit reviews:
EPA is playing with fire. More importantly, the agency is playing with people’s livelihoods. The implications of their delaying tactics will be felt throughout this state’s economy.
Bill Caylor of the Kentucky Coal Association said:
EPA’s hit list was compiled by people in Washington who are entirely insulated from the consequences of their actions and far removed from the families and communities affected by them.
And my buddy Bill Raney, president of the West Virginia Coal Association, said:
People all over West Virginia can’t believe this is happening. They don’t understand why Washington is willing to kill-off good paying jobs when our economy is still on the ropes and the unemployment rate is still unacceptably high.
Are things really as bad as Carey, Caylor and Raney make them sound?
One permit that’s gotten a lot of attention is the Spruce No. 1 Mine. Arch Coal subsidiary Mingo Logan Coal Co. has warned that at the Spruce Mine — the subject of a pending permit veto effort by EPA — it “must soon develop more fill capacity or cease operations.” But that mine currently lists just 26 workers. And its permit dispute with EPA didn’t even merit a mention in Arch Coal’s recent quarterly financial report or earnings conference call.
Or consider Patriot Coal subsidiary Hobet Mining’s Hobet 21 expansion project — called Hobet 45 — down along the Boone-Lincoln County line in Southern West Virginia. It’s one of the last large surface mines working under a United Mine Workers contract. It employs 325 people.
We’ve discussed this permit before, and reported on Patriot’s concerns that without the new permit its dragline would have to be shut down. But the company said it didn’t expect to lose much production until the second half of 2010, and that it was exploring options that could keep that mine working. More recently, state regulators reported that Patriot and EPA had reached a deal on this permit, averting layoffs at the Hobet operation.
During a conference call with industry analysts last week, Patriot CEO Rick Whiting said the permit hasn’t gotten final approval yet, but expressed some optimism about the situation:
We do not have it in hand. We continue to provide answers to questions and have meetings with the regulators and in fact I think we are going to make a new submittal, I guess, I’ll call it a partial submittal or an adjustment to previous submittal by the end of this week, and we continue to keep the dialogue open and respond to their request, and I believe we are making progress, but we do not have a permit at this point.
Of course, in an opening statement, Whiting gave the standard coal industry line about the EPA permit reviews:
Currently surface mining provides almost two-thirds of Central Appalachian thermal coal. So, we look with great concern on the EPA decision to further review all 79 surface mining permits pending with the Corps of Engineers.
If future permits are not granted and important source of low cost fuel for electricity will be eliminated that will mean higher utility cost for many Americans. Unfortunately the EPA’s decision adds further uncertainty for coal producers, our employees, our customers, and our investors.
But, one analyst asked, is Patriot facing serious problems with any specific permits other than Hobet 21? Whiting responded:
I think that anything else that we have in our lineup it becomes more of an issue [when] you get to mid 2011.
In fact, Whiting went on to say that Patriot already has some permit approvals in the area where it previously shut down its huge Samples Mine, and might seek more permits in that area, but not until probably 2012:
Obviously at some point in time we have other opportunities, what was Paint Creek, which is the area, where Samples previously operated, we have some other reserves already permitted out there and we have another large block that we would be seeking a permit for sometime in the future probably all those we get done in by 2012 up there we would be a good shape for that fits in to our strategic plan and when we think we would like to bring those terms online.
So, as we get in to 11 and 12 no permit scenario, we can’t run and hide from that any more than in the rest of the industry can. I think we are probably a typical profile that if our production drops down over the next three or four years, if we don’t get any permits, but I think anything that’s going to affect ‘10 is pretty well the Hobet 45 that has gotten so much fame of light.
The only layoffs that I’m aware of that have so far that have been attributed to EPA’s permit reviews were announced last month by International Coal Group Vice President and General Counsel Roger Nicholson during that crazy Army Corps of Engineers mountaintop removal public hearing here in Charleston.Nicholson said the Obama administration has enacted a “de facto moratorium” on new permits that is “strangling the Appalachian coal industry.” Nicholson said that at one ICG opreation, permit delays caused a sequencing problem, closure of certain equipment and loss of jobs.
After the hearing, I asked Roger for some more details on what happened. Here’s what he said:
… Delay or non-issuance of permits has directly contributed to layoffs at both our ICG Eastern operations (38 workers laid off) and ICG East Kentucky operations (10 workers laid off).
By way of explaining what permit delays mean to mine operators, he added:
The practical effect of delay in issuance of permits is that a mine is often forced to change its mining sequence when permits for logical extensions of an operation are delayed. This raises costs and can render an operation uneconomical, and, of course, permitted coal reserves can be exhausted, which can lead to closures and layoffs without the issuance of new permits for additional areas.
Over the last few weeks, I’ve repeatedly asked ICG for more details. I wanted to know exactly what happened at these operation, to understand specifically how EPA’s permit review contributed to the layoffs. Finally, I got this response from Roger yesterday:
We are not going to comment in detail about specific permits. Mining is a very complicated, engineering-intensive business. Permits are the life-blood of any mining company’s business, and companies plan specific operations, as well as subsequent mining areas for those crews to “go-to” when existing operational areas are exhausted, well in advance. The delays in mining permit issuance is a contributing factor to those operational changes that I mentioned in my initial statement. As we have stated publicly, the mining permit delays have not yet caused a material negative effect on ICG’s financial performance overall.
In a conference call last week, ICG President Ben Hatfield repeated this idea that there’s a “de facto permit moratorium” instituted by the Obama administration:
It is inevitable however, that all Appalachia and coal producers will face more significant operational difficulties unless the administration de facto moratorium on coal permit issuance is listed and permits for both surface and deep mining operations are issued without undue delay.
Hatfield also made what appears to be a perfectly reasonable point: That the coal industry wants clear direction from EPA about what is wrong with the permits is is reviewing and what needs to be done to fix them:
Our strategy would be easier to find, if could find some method to the madness part. Frankly, when they won’t even give us a good excuse of what they are looking for or what their problems are, we don’t, quite know how to react.
I’m hoping to discuss this particular issue in more detail in a future post. For now, though, it is important to look at what Hatfield said when asked about specific operational problems the EPA permit reviews were (or weren’t) causing his company:
Well, the short answer would be essentially our higher costs impact certainly. We do not see in the permits that are teed up for scrutiny at this point anything that’s likely to cause us to have to literally shutter production in that two year time horizon. But certainly there is a cost impact that even there as we speak in the current period, because when you don’t get permits for new valley fills that means you have to haul the material further.
We are fortunate to have locations, particularly at Hazard in ICG, Eastern locations, where we can haul the material little further and maintain our more or less our current production output. But there is a cost connected to that. So in the near term I would say more pressure on higher costs because we don’t have the permits approved and certainly over the more extended period I would say beyond the two year horizon, substantial risk of production shutting and quite literally as existing mines are depleted and the successor permits are simply not approved at that stage.
In addition, consider this:
But our overall plan as you know probably from following our… for a period of time, most of our growth is on the underground side. Beckley with a big piece of our growth, Center with a big piece of our growth and continuingly we expect to develop the Tygart project beginning in 2011. That’s another major step up on underground production.
Roger Nicholson would want me to point out here this quote from him regarding that Tygart Mine, an underground operation proposed for Taylor County, W.Va.:
Of course, as you are also aware, anti-mining extremists have been contesting the state permit for ICG Tygart Valley’s deep mine–one which will create hundreds of new jobs in Taylor County–for a couple of years now.
But overall, here’s what Hatfield said about the future:
So I think you would generally see our company particularly in the industry, in many cases favoring, bidding on both on the underground side as of somewhat safer haven so to speak because of the uncertainty as to how long it takes or even whether you can get a surface mine permit approved.
So I think that the short answer is moving more of our focus on expanding underground operations and looking particularly at our subs operations or locations where we can continue producing without new adequate, not letting not putting material back on existing bench or reusing an older field. So there are some strategies that help us bridge that period of time, but the industry overall is going to see a negative impact to production output and particular to surface mining in Appalachia.
Consider what the folks from CONSOL Energy had to say in a conference call with industry analysts two weeks ago. CONSOL President Brett Harvey explained that his company has some exposure to mountaintop removal mining permit issues because of its purchase two years ago or Amvest Corp. But, Harvey didn’t indicate any crisis there, even though at least one Amvest permit is among those being examined by EPA:
… That permit right now, we are running the biggest mines that we have in Amvest , and they are running on year to year permits. We had five other permits in the queue, and those permits were more expansive type, and we’ll continue to push for those permits, but it’s not in our 2010 plan at this point in time.
Harvey called the mountaintop removal issue in the Central Appalachian coalfields “a very poignant issue” and said it is “critical to get permits there.” But he also said:
We have low exposure to Central App, but we think it will affect Central App in a big way that could translate back into an advantage for Northern App because we have very big mines that are well capitalized and have 20 to 25 year lives … We would rather see everybody get permits and be competitive, but if there is a positive for us, it does push value back to Northern App if Central App continues to struggle based on permitting.
And, even Don Blankenship seemed to be saying that EPA was doing his company a favor by taking a closer look at some of the pending mountaintop removal permits held by his company’s competitors:
We believe we have a 100 million tons of thermal coal or surface mining coal permitted and that we have lots of opportunities to get permits in manners or in ways that comply with these laws, but we always worry about what EPA and others will do next, as far as frustrating that process.
But relative to other companies we feel very good and we think that at least in the short term that we would benefit from the permitting process being frustrated but we’re certainly not in favor.
Blankenship added:
I mean one of the reasons that we bought in prompt delivery coal in the third quarter and let our fixed coal volumes suffer was is that it allowed us to add a couple of mines that are fully permitted that were sort of left in storage in case the permit issue worsens and the prices improve.
58 comments
I love it when the truth is told!! Please, folks, let’s stop fighting amongst ourselves over who is causing layoffs - if any - to coal miners. Clearly, it is the decisions that these fat cat corporate execs & board members make - based on what increases or decreases THEIR profit margins - which affects the availability of jobs in West Virginia coal mines… always has been, and always will be. If you want to blame your neighbor who’s trying to preserve his land from being blasted away in a MTR operation, instead of those fat cats, go ahead… but you are deceiving yourselves.
The economic downturn and reduced electrical generation coupled with the increased production of natgas and resultant fuel switching, has caused the negative effects of the EPA’s actions to be substantially less than what it would be otherwise. If it was not for this, EPA’s actions would be causing major disruptions. Instead the major disruptions are only delayed. Also as indicated in some of the quarterly conference calls, mining costs will increase at operations which makes these mines less competitive and therefore subject to layoffs.
I’m sure that coal company executives are hopefully that the pending EPA permit veto of the Spruce Mine does not happen or at least does not become the modus operandi in future EPA actions. Execs certainly would be prudent to not alarm investors and remain cautiously optimistic and downplay some of this potential.
What the EPA appears to be doing, will have a major effect on WV employment and the state’s finances which is already moving to a deficit.
Thank you so much for going in-depth on this issue - the hysterical warnings of tens of thousands of job losses by the NMA and coal companies is just posturing. But the attempts by some companies to fuel anger of miners toward people trying to protect their homes and their drinking water is dangerous, irresponsible, and undermines any claim that they’re genuinely concerned about the welfare of people in the region.
Yesterday’s Coalfield Progress down in Southwest Virginia reported that A&G Coal is announcing lay-offs of an unstated number of workers in a letter that stated:
“[the environmentalists] victory brag is that they have taken away the right to work from our employees and support for their families. Most of these people don’t work and would not know what a hard day’s work is like. We have been asking for support from our community to help save our jobs.”
Nevermind that many of the people protesting the mining down in Virginia are retired union miners, the companies are trying to intimidate the Obama Administration with what amounts to “give us our permits or the little old lady gets it.”
The fact that US coal demand is down 9% this year, and that the delivered cost of Central Appalachian coal is far higher than any other coal region (on average, double Powder River Basin coal) makes blaming even a single job loss on permitting issues the height of cynicism. If a job loss didn’t happen in one place, then it would happen in another - there simply isn’t enough demand for high-priced CAPP coal.
The only way those jobs can be replaced is by bringing new industries into the region other than coal, and that should be the #1 priority of the Obama Administration right now in Central Appalachia. It’s discouraging that West Virginia’s political leaders show no leadership in this regard.
…”seems like plenty of time for everyone to sit down and come up with a workable solution without scaring workers and threatening environmental activists”.
The same could/SHOULD be said for global warming but change “workers” to “Americans” and “environmental activists” to “coal miners” .
There is really no difference between the two debates as expressed in your stories and the parallels are shocking. The hypocrisy is blatant !
…did Blankenship or Hatfield comment on how many jobs mining their underground reserves would create relative to MTR operations? The Tygart Valley deep mine would allegedly create “hundreds.”
civil joe —
No … neither commented on those job numbers. I did, however, link to transcripts of the conference calls, so you could read them and see if I missed that. Don’t think it’s there, though.
Fort,
I’m not sure I get what you’re saying … but there is a HUGE difference regarding climate change. Climate experts tell us that climate change is already happening, and is happening faster than they thought it would.
The U.S. already delayed any action on climate change for 20 years, and most of the available science says action to reduce emissions is needed now or it might be too late.
The analogy you’re drawing doesn’t work … Ken.
“EPA’s hit list was compiled by people in Washington who are entirely insulated from the consequences of their actions and far removed from the families and communities affected by them.”
Interesting because I thought that coal was the only thing that could keep the lights on in Washington, or anywhere from the sound of coal lobbyists. And who in Washington is insulated from Big Coal’s lobbying efforts anyways? All they talk about is electricity rate hikes, so how can anyone be insulated from these permitting effects?
Ken,
You’ve done a great job of weaving together what’s really being said.
The Outlook 2009 with Projections to 2030 (3/2009) for coal has dimmed: http://www.eia.doe.gov/oiaf/aeo/coal.html
http://www.eia.doe.gov/cneaf/coal/weekly/weekly_html/wcpmonth.html (Note that coal production in Missouri is up by nearly 85% to 327,000 tons so far this year.)
In fairness, coal mining companies — like all businesses — need to know how much effort and time is required to obtain operating permits. Even uncertainty is costly.
P.S. The money is going west.
November 3, 2009
CORRECT: Buffett’s Burlington Bid A Bet On Coal’s Continued Role
http://online.wsj.com/article/BT-CO-20091103-720973.html
(Excerpt) “As energy prices go up, it becomes more and more important to ship by rail–that’s a factor,” Buffett said in an interview with The Wall Street Journal. “It’s a factor in why the country has a huge interest in fostering rail.” He said that rails “carry a lot of coal, but 25 years from now they won’t be carrying as much.”
—-
http://www.archcoal.com/aboutus/history.aspx
(Excerpt) In October 2009, Arch Coal acquired Rio Tinto’s Jacobs Ranch mine and blended it with Black Thunder mine in the Powder River Basin of Wyoming, creating the largest single coal mine in the world.
—
Graphic: Montana coal production (with the Signal Peak Mine)
http://montanaenergy.mt.gov/img/chart/coalsignal.png
October 24, 2009
http://www.helenair.com/news/state-and-regional/article_2caa09a6-c0d8-11de-a928-001cc4c002e0.html
(Excerpt)
Despite the credit crunch, the Signal Peak Energy Mine south of Roundup charged full-steam ahead. In one year’s time — during the worst of the recession — contractors built a 36-mile rail spur and a high-tech coal mining operation with a $408 million investment from co-owners Boich Group and FirstEnergy, both of Ohio.
And Signal Peak, which beefed up its staff from a few dozen to 190 people, became a haven for miners who’d lost their jobs elsewhere.
May 19, 2009
http://www.billingsgazette.com/news/state-and-regional/montana/article_194ddb51-de3d-59f6-b758-b939ec7d5fe4.html?mode=story
(Excerpt)
Placha, whose resume includes the planning and design of coal mine surface facilities around the globe, said he sketched out the concept for Signal Peak’s Mine in the summer of 2007. Late last July, the Ohio-based Boich Cos. and FirstEnergy bought the property with plans to invest $450 million in developing both the mine and the related 31-mile railroad to Broadview. With completion slated for summer, the entire project will have gone from pencil to finished product in less than two years.
I like how everyone that’s wrote in this doesn’t seem like they have any experience in permitting. If any of you did, you would know it takes months for even a rushed small permit. Not 3 months, closer to a year. Do any of you know the amount of work that goes into making sure a permit passes the rules the coal industry knows about? That doesn’t include the ones that have magically appeared since the new administration.
Something else you all don’t know about because you don’t work in the industry, you need a very long timeline to plan ahead to keep things working. You all most likely don’t work on a big operation like a coal mine, but it takes a lot of work and planning to organize all of the work that goes on. You have so much to juggle at once. It’s not working at Walmart even though you seem to think it’s that simple. If you lose the permit you need for next year, you can’t work full force till it’s done. That wouldn’t allow for reclaiming the land. You have to let men go now. Life isn’t as simple and black and white as you make it out to be.
As always, it’s never the overbearing government’s fault on Coal Tattoo. It’s just the evil coal companies. Coal companies have to lay off some to keep employing others. I’m sure all of you would be happy to let everyone work for a for more months and shut all of the coal mines down, but that wouldn’t be good for anyone.
Daniel,
All I’ve done is quote the CEOs of most of the region’s major coal producers … perhaps you feel that they don’t know much about permitting. But my guess is they have a pretty good handle on what the production outlook is like for their companies.
Ken.
[…] Blogs @ The Charleston Gazette - » Coal Tattoo investigates: Is there a MTR permit crisis? blogs.wvgazette.com/coaltattoo/2009/11/04/coal-tattoo-investigates-is-there-a-mtr-permit-crisis – view page – cached To hear folks from the coal industry — and their politician friends — talk, you’d think that the Obama administration’s move to more closely review mountaintop removal permits has brought… Read moreTo hear folks from the coal industry — and their politician friends — talk, you’d think that the Obama administration’s move to more closely review mountaintop removal permits has brought coal production across Appalachia to a halt — or at least driven mine operators to the brink of thousands of layoffs and economic ruin. Read less […]
Ken,
It’s easy to take quotes and pull them out of their original context. Have you ever worked on anything with permitting at a coal mine? I have. Do you know how big the stack of paperwork is today compared to thirty years ago? I do. An older permit would be a stack of paper about an inch thick. Permits today take a stack of about a foot of paper at least for a small permit.
It’s easy to criticize something when you’re not involved in it.
Daniel,
Very good points. What is the lead time to get an electric shovel these days? Probably 12-18 months and 15-20 million dollars. In order to make an investment like that you need certainty, years out. These coal ceo’s are trying to sell coal in out years. The customers need to know they can count on reliable supply so companies have to have contingency plans. The fact is permit uncertainty now will affect mining in the future. As the wife of someone in the mining industry, I know the uncertainty is also psychologically damaging. We have 25 years left on our mortgage and 2 years of permitted reserves left.
AGF-C
Thank you, it just frustrates me that the argument is stacked against the coal industry and nobody that works in is actually given the chance to reply without being quoted out of context.
Sure, if the coal companies are forced to do things the difficult way some will. Most won’t though. Most will go out of business. Because you can do something the hard way doesn’t mean you should. Nobody drives the long way around town to go to the store. It’s a waste of time and money. That’s all this is, trying to make the “evil coal companies” burn out their time and money.
The frustration that people employed by mining companies are feeling about the rules and process seeming to change suddenly is very understandable. Anybody would feel the same. And who wants to deal with stacks of paperwork? Not me.
But blame toward the EPA and Obama Administration for that is misplaced - they haven’t changed any rules at this point, they’re enforcing them. The Bush Administration is who changed the rules and, just as importantly, didn’t allow the EPA to do its job of enforcing the Clean Water Act for 8 years. The blame goes to those who were unwilling to enforce the law like the political appointees that ran the EPA and the WVDEP (particularly those at the top - as with the EPA, I suspect there are many in the DEP who would love to be able to do their jobs).
But there are fish turning up with both eyes on the same side of the head from selenium poisoning, chronic violations of clean water laws all across Appalachia, hundreds of families with contaminated drinking water, the list goes on and on. That’s what happens when laws aren’t enforced, and the result would be unacceptable anywhere else in the country - why should it be different in Appalachia? Because the politicians are beholden to the coal industry? That should be none of the EPA’s concern - the Clean Water Act is a federal law and it applies, just like the Voting Rights Act or the first amendment, whether or not a state wants to enforce it.
It’s not about “evil” coal companies, it’s about companies pursuing a single-minded pursuit of profit, as many companies do, combined with an abominable failure of leadership in holding them accountable to environmental laws and basic standards of decency in how people are treated. And the fact that miners feel there are no opportunities outside of the coal industry is also the result of a lack of leadership. In most other states, members of Congress and Governors seek to build a strong and diverse economy in their states and their districts. West Virginia politicians have demonstrated nothing but an astounding ability to get re-elected, while their state and their districts fall deeper and deeper into economic distress.
With coal demand in the doldrums, the supply of economically recoverable coal dwindling fast, and billions of dollars of stimulus funds available to bring new jobs and new industries into the state, there could be no better time for West Virginia’s politicians to demonstrate some genuine leadership. Based on Manchin and Rockefeller’s recent rhetoric, that opportunity is likely to be squandered once again. And the people of Appalachia will pay the price once again. And the blame will be placed on the “tree-huggers” and the EPA once again. What a tragedy.
On the other hand Matt students of political discourse will find much to study in the modern implementation of the “divide and conquer” strategy utilized by villains of old throughout antiquity. Not sure what they can learn, except documenting how villains today throughout appalachia and probably any other Place where invested interests strategically utilize insider-outsider tensions, economic imperatives and philanthropic meddling to create bureaucratic limbo in which resource extraction may be maximized while minimizing liability.
Yes, that’s a paltry prize, but it’s probably what we are left with at this point. Until there are definitive decisions made regarding the fate of valley fills and spoil, the best we can do is consult the oracles. My oracles are telling me that coal companies will cut jobs beyond that necessary and blame the tree huggers, then at moments favorable for propaganda and outreach purposes (perhaps coincident with election results, or other developments) Lo! Jobs!
Call me a cynic? Maybe. But anyone who can look at dead muskies and not want Justice is a poor excuse for a citizen of my watershed, as far as I can see. That’s the kind of person that walks past a burning house on his own accord and doesn’t need any walking boss to tell him which way the wind blows.
Hope I’m Wrong!
Jason, I believe your predictions are wrong. Companies employ workers for one purpose and that is to make a profit. Cutting jobs beyond what is prudent would reduce the ROI and conflict with a financial entity’s goals.
The CEO’s conference calls certainly don’t say everything is fine in the regulation of mining. The economic downturn and some adjusting by companies are allowing the impacts to be lessened but there’s matter headed toward the fans. Daniel certainly knows what it is like having to constantly adjust mining plans and support these changes with regulatory paperwork. Tedious and frustrating especially if you don’t know what is expected from the regulators.
The Spruce Permit situation is far more concerning than requiring IP’s versus NWP21’s. Workers truly fear this happening to their jobs. AGF-C is a spouse of a worker that has real concerns on job security and paying a mortgage due to the permitting uncertainty from the Obama’s EPA. It is not the heads of coal companies dictating how these people feel. These are intelligence and perspective individuals.
Come on Matt. Who else is there to blame? MTR took place many years before George Bush was in office. We need a process instead of a black hole.
I know first hand that there is a permit crisis. I can’t get a NWP #18 404 permit for a single stream crossing on a haulroad to an underground mine. I can’t even get a comment letter from the ACOE. My permit application is just sitting in an office somewhere. I also have clients walking away from reserves because they don’t even want to try to get a 404 permit.
You are correct the CWA is a federal law and we desperately need to diversify our economies. The CWA should apply to everyone equally. Why are NWP #21s being done away with in Appalachia and not the rest of the country? I don’t think chopping the legs out from under the one industry you do have counts as diversification.
I regards to your comments concerning “companies pursuing a single-minded pursuit of profit” and “basic standards of decency in how people are treated”. Why would any company be in business other than to make a profit? What part of decency puts thousands of coal miners out of work?
Oops, perceptive individuals.
There are many-many permits (and studies) needed to be able to mine coal — or to do anything else — being good at it makes a company better than others.
I’m sure that WVDEP knows how many coal mining permits have been issued, but not yet started — probably even how many of them are MTRs.
Also, according to the most recent report from the U.S. Office of Surface Mining (Reclamation and Enforcement), WVDEP issued 52 permits (totally 8,654 acres permitted, not necessarily bonded) during the 12 months preceeding July 1, 2009. As of that date, there were 301,951 acres bonded — 9,998 acres less than a year earlier. See: http://arcc.osmre.gov/about_cfo.asp
Permitting about 14 square miles a year and having nearly 500 square miles bonded seems to be a lot.
P.S. Everything is getting harder so expect it.
Jason and Engineer,
Both of your comments illustrate important points. Engineer, there is little reason for any company to be in business other than to make a profit - I couldn’t agree more. And to Jason’s point, dividing communities, disobeying laws, and buying politicians is one way to increase those profits. That’s exactly what has been happening for a long time.
The coal industry in Appalachia is not much different than industries elsewhere, though I’d point out that there are also many industries content to make slightly lower margins and avoid poisoning peoples’ drinking water and devastating the environment and economic potential of the areas where they do business. I believe there are some mining companies that are willing to make that tradeoff, though the big ones in West Virginia prefer to treat the state like a business in liquidation.
But also to Jason’s point, it’s more complicated than a simple failure of leadership of state politicians - I agree. But when leaders fail to serve their constituents, then responsibility is kicked up the chain of command to the next level of leadership. The buck stops with the President. When Governor Wallace stood in the schoolhouse door in 1963 to prevent two black students from entering an Alabama schoolhouse, the responsibility became President Kennedy’s - and thankfully, he was up to the challenge.
The test of leadership in Appalachia now falls to President Obama - the Governor, Senators and Representatives have failed. One needs only to look at this year’s index of “well-being” put out by Gallup, which ranked West Virginia dead last and Nick Rahall’s district 432nd out of 435 districts, to know that.
Obama has shown a willingness to enforce laws under the rules rigged by the Bush Administration, but he has yet to demonstrate leadership in proactively seeking to improve the welfare of people in Appalachia who have been failed by their elected officials and were failed by both Presidents Bush and Clinton. It’s a tough spot with Sen. Rockefeller all but threatening to hold Obama’s legislative agenda hostage in order to keep the race to the bottom going in West Virginia (why not? Rockefeller keeps getting elected and seems to have done quite well for himself). But this is a real test of leadership for Obama the way that racial desegregation in the South was a test of Kennedy’s.
Between his nomination of Pizarchik to head the OSM, kicking the stream buffer zone rule down the road until 2011, and his unwillingness to revisit the Bush Fill Rule in his first year in office, he’s not looking much like a Kennedy at this point. But its never too late to show leadership - the same applies to Byrd and Rahall - it’s just that the consequences of delay grow greater all the time.
And the people of Appalachia will pay the price.
Daniel,
In response to your concerns that I’ve taken something out of context … that’s why I linked to the transcripts of the conference calls in which those statements were made.
Feel free to read the transcripts (or go to each company’s Web site and listen to the calls) and then provide Coal Tattoo readers specific examples of where anything that these corporate execs have said was taken out of context.
Also, this post includes quotes from these company execs where they explain the very sorts of issues you’re talking about …
The point here is that there is not a crisis, and I’m defining that as layoffs about to be made tomorrow, by any of these major coal producers because of delays in permitting. That means that there’s no need to — as Earl Ray Tomblin suggested — solve this in a matter of days, not weeks. There is time for everyone to have their say and for the new administration to decide exactly what policies it wants to propose and seek to implement.
And to answer your question — no, I have never permitted a coal mine. I haven’t worked at a coal mine. I haven’t worked for a regulatory agency that processes permits. I haven’t worked for a consulting firm that writes permit applications.
But, I am very aware of the amount of paperwork that is involved in one of these permits. I stopped counting a long time ago, but I’ve reviewed — as a reporter covering the coal industry — literally hundreds of permit applications filed with the Corps and with WVDEP.
But again, if you feel I’ve taken something out of context — please, by all means, read those conference call transcripts and provide concrete examples.
Thanks, Ken.
Coal will be mined in West Virginia for many decades to come and — good or bad — some of that will be done by Mountain Top Removal.
(Personally, I am more concerned about there being adequate flood protection which more encompassing issue.)
The hardships of Appalachia have continued for many decades even though there have been many programs and efforts to lessen them.
As my Appalachian materal grandfather (who lived in SE Ohio) told me: During the Great Depression there wasn’t anything to depress so it didn’t make a difference there.
Helping to make things better is needed — not arm-waving and shouting are not.
Right now keeping people working while quickly transistioning to cleaner and efficient energies has to be the focus.
The State of West Virginia and its citizenry have rights that need to be respected.
P.S. The KISS Principle is always applicable.
By definition I believe it is a crisis. It is a turning point, an unstable situation, an emotionally stressful situation, and a point where conflict reaches its highest tension and must be resolved.
Ken,
If you were the head of a major company with thousands of employee spending millions of dollars a year, would you tell your investors the end is near? That would drive all investors away, drive away potential employees, and make you hit the bottom of the list of importance in just about all matters. Nobody wants to hear they are investing in a sinking ship.
If the Obama administration is all about transparency (like he stated during his run for election), why aren’t there clear rules to follow? If the rules were clear, mining companies wouldn’t be hurting right now. You can’t solve a problem if you don’t know what it is. I doubt you have friends that work at a MTR mine, but every single one that works at a MTR mine is supporting himself, most are supporting a family. These men aren’t supporting themselves on fast food wages. High paying jobs in our state are few and far in between, especially without a college degree.
It is a crisis that needs to be solved. Not today, not tomorrow, it should have been already solved. If you seem to think that it isn’t a crisis because massive layoffs aren’t happening today, than neither is global warming. According to you (and I’m sure you’ll reply with according to many global warming scientist) global warming is happening today and is a long process that needs fixed now, not in days, weeks, or months. How is it fair to be so headstrong on this issue that we don’t see everyday, but it’s ok for good men to lose their way to support their family? Men have already lost their jobs in our state due to the strain the government is putting on the coal companies. No, that isn’t the only source of troubles, but if the industry wasn’t having to watch it’s back for the mystery future standards, it could afford to keep mines open. The industry is preparing for a “hard, cold, long winter” and you have to make some sacrifices today to prepare for tomorrow.
You can’t expect to live for today and prosper tomorrow like you’re expecting the coal companies to do. If you understood the big picture of the mining process, you’d understand my point of view. You need to line up permits today to keep a strong business for years to come.
Daniel,
I take it you aren’t able to show where I’ve taken anything any of those corporate execs said out of context?
Ken.
According the Corps, which take many months and up to many years to review a 404 permit, has NEVER denied a surface mining permit in Appalachia. If anyone can prove this claim wrong, I would gladly welcome it. The Corps’ job is to issue permits, period. Otherwise, it would be considered “takings” and they would likely be sued for monetary damages. Meanwhile forests, mountains, and streams continue to be blown away in the name of cheap energy and progress. EPA’s place in the regulatory world is oversight to ensure the resource, in this case “waters of the United States,” is protected to the maximum extent possible. In rare (12 times since 1972, and not once yet for a coal mine) occurrences EPA will veto a permit application based on unacceptable harm to the environment. While EPA has largely been absent at the table, this has been due to, at least in Region 4, restrictions in funding, staff, and lack of support from the administration. This is changing but like most government mandates, is moving alot slower than most would prefer; miners and environmentalists alike. The law has not changed but the referees are now back on the field and the players are gonna have to get used to playing by the rules again, even it means learning them. What has also changed is what EPA is likely to consider unacceptable harm to the environment. The cumulative effects of this egregious practice of blowing up mountains and streams for a few years worth of coal is now becoming obviously apparent not just to environmentalists and locals but to the regulated community as well. Mitigation and reclamation may be working in a few examples but is largely a joke and the industry is now being forced to recognize this. The industry balked at the inception of SMCRA in 1977 that coal mining would be impossible with the new law in place. 30+ years later more coal than ever is being mined and the environmental damage is more widespread than ever. If EPA finds a way to raise the bar by applying and enforcing the laws already on the books, the coal industry will find a way to overcome it. They may whine for a while and claim job loss here, and profit loss there, and a rise in electricity rates, but they have proven they can meet the challenge every time and continue to mine. Why would this time be any different?
Great discourse here…I will continue to read each chance
Daniel not only has failed to substantiate his comment but has directly implied that company CEOs are liars. I wonder…
Hey I agree, Obama administration has not been transparent as promised. I for one never expected them to be for I think all politicians (as you may extend to CEOs) lie. Perhaps by omission. It doesn’t matter.
Now, as for “mystery future standards” why doesn’t the coal industry adopt, for the time being, the Bragg vs Robertson ruling? Seems clear that accepting that decision would go a long ways towards mitigating the EPA and whatever it is that you call folks who advocate for clean water.
You’ve got a standard. You’ve had a standard! Accept it!
Gazette Headline: Coal in Good Shape, Companies Say”. Some of the communications below seem to indicate that coal is NOT in good shape.
Headline: Coal producer Massey: Mine Permitting Hurts Growth
http://www.reuters.com/article/marketsNews/idAFN2830034820091028?rpc=44
Conference call statements:
Rick Whiting (PCX): “Additionally further constraining supply the delay and issuance of surface mining permits in Central Appalachia during 2008 and again this year in 2009 is almost certain they have a meaningful negative impact on surface production in 2010.” “Currently surface mining provides almost two-thirds of Central Appalachian thermal coal. So, we look with great concern on the EPA decision to further review all 79 surface mining permits pending with the core of engineers.If future permits are not granted and important source of low cost fuel for electricity will be eliminated that will mean higher utility cost for many Americans. ”
Ben Hatfield(ICO): “It is inevitable however, that all Appalachia and coal producers will face more significant operational difficulties unless the administration de facto moratorium on coal permit issuance is listed and permits for both surface and deep mining operations are issued without undue delay.” “So in the near term I would say more pressure on higher costs because we don’t have the permits approved and certainly over the more extended period I would say beyond the two year horizon, substantial list of production shutting and quite literally as existing mines are depleted and the success are permits simply on approved at that stage.” “So there are some strategies that help us bridge that period of time, but the industry overall is going to see a negative impact to production output and particular to surface mining in Appalachia.”
Doesn’t sound rosy to me. Again, the effects of the crisis are not immediate (unless you work or support the Spruce Mine) because of the recent great recession and a very slow initial recovery.
Casey,
yeah … I wasn’t especially happy with that headline (written by one of our copy editors).
if you read the story, though, the material is the same as in this blog post.
And both the story and the blog post point out that mine operators are concerned about the permitting situation — but don’t express that there is a “crisis” with impending layoffs.
And, if you read the blog post, the Spruce Mine situation was discussed.
I’d suggest that everybody who thinks I got this wrong should listen to the conference calls or read the transcripts, as I did, before you make that allegation.
Ken.
Casey,
In fact, my post included the very same quote from Ben Hatfield that you now cite:
It is inevitable however, that all Appalachia and coal producers will face more significant operational difficulties unless the administration de facto moratorium on coal permit issuance is listed and permits for both surface and deep mining operations are issued without undue delay.
And guess what … it included the VERY SAME quote from Rick Whiting, too:
Currently surface mining provides almost two-thirds of Central Appalachian thermal coal. So, we look with great concern on the EPA decision to further review all 79 surface mining permits pending with the Corps of Engineers.
If future permits are not granted and important source of low cost fuel for electricity will be eliminated that will mean higher utility cost for many Americans. Unfortunately the EPA’s decision adds further uncertainty for coal producers, our employees, our customers, and our investors.
So … thanks, Casey. You made a great point about what a balanced job I did of showing what the coal execs had to say about the permitting situation. I appreciate it.
Ken.
Ken,
You are welcome. I also obviously did not like the headlines either. I still think that the Obama’s EPA stance is a crisis. You know I re-read some of the company’s annual reports too but since I could not cut & paste them I didn’t include those comments. We are definitely at the crossroads and it’s big.
In general sometimes the headlines along with a picture, coupled with the first few paragraphs of a report, can represent a distorted picture of the story. Unfortunately this part of a report is all that a lot of people read and do not bother to read the whole, more balanced total story. You always include all or most all of the information. Your copy editors might be a little devious at times.
That blog certainly got a lot of interest as I don’t think I’ve seen so my comments without the comments getting turned off. You got people thinking and in a respectful fashion! All good.
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Are the publicly traded companies who have the earnings calls and comment to analysts a leading or lagging indicator of whether we have a crisis upon us. It seems that looking at the earning call comments from a several companies on the past quarter hardly reveals what is really upon us here. Their quotes all seem to say that going forward they see real problems for their companies and the industry with the current status quo. Of course these are just the larger companies that have the capacity to weather this standstill on permitting a bit longer than their smaller competitors. There are many companies who are feeling the pinch right now. And beyond them are all of the suppliers who have had equipment and supply orders cancelled or deferred leading to cutting back on workers hours and future investments in their businesses as well. This all ripples through the economy. Underemployment becomes unemployment.
As for the suggestion that the rules haven’t been changed–nonsensense. The process has been turned on its head. The rules on the books call for the Corps to receive permits, make decisions on whether they are sufficient to be processed, ask EPA and other agencies for their views and then the Corps makes the decision. This is not the process being followed. EPA is making the decisons up-front on whether a permit should be considered by the Corps in the first instance, how, when and under what circumstances–and still reserving the right to veto the Corps decison at the end of the day. Moreoever, I understand that few if any of the companies with the 79 permits have been told by EPA exactly why their specific application cannot be processed and the Corps has apparently not been given specific reasons for specific permits. All they have seen is some generic letter that EPA sent the Corps saying none of the 79 pass muster and need more work and simply parroting generic reasons. Beyond the 79, there are probably another 100+ permit applications languising in the eastern coal states. Lets see–this all began in March when EPA said it would look closer at a handful of permits. When it was called a moratorium, they protested that characterization. Here we are eight months later and the companies are still spinning their wheels trying to find out why their applications aren’t being processed. If “crisis” is only defined by “layoffs tomorrow” I guess the subprime mortgage bubble was not a crisis until it burst.
“Houston–I think we have a full blown moratorium here.” Five thousand+ people who showed up in Pikeville on a Wednesday night believe there is a crisis–now. They seem to be the best leading indicator on where we are headed.
FactsFirst,
I agree with you about a crisis-now because I work at a large mine that is in need of a permit very soon or miners will start to lose their jobs. This is going to happen regardless because even if a permit comes through for us the window for some equipment is closing as we speak. One machine will park if that window closes and will stay parked until preparation is made to move it to a new permitted area. That would take months to prepare and that could be at least 70 jobs. When that happens the cost per ton will begin to creep up because of lost production. When a major piece of equipment is idle you start to look for ways to save money fast. You cut overtime, control purchases more closely and change your schedule for just a few examples. Cost savings can carry you so far but with out the permit you become a competitor within your own company. Each operation is trying to stay alive and the numbers are the deciding factor. It doesn’t take long before someone is on the chopping block. Each violation or citation weather safety or environmental can put you job over the edge. When I here people talk about any type mining and they haven’t been a miner or in any company to see how it works they can only be na-sayers. We have pressure to do things right from pit Foreman, Superintendents, Operation Superintendents, Mine Managers, Maintenance Managers, Maintenance Superintendents, Safety Managers, Environmental Engineers all the way to General Managers. We are responsible people that have worked for years by the laws and regulations we have been governed under. Let us work and make changes from permit to permit. The coal industry in the US is being asked to do what? We don’t know. We haven’t been told what we are doing wrong and what we need to do about it. All the while China, India and other countries are going full blast in the same world we live in. We are going to be alone in a world going by us like a freight train and we have given them the tools to do it with.
When stifle our economy with delays and burockracy and are told it will be ok we should worry. Facts the numbers will grow to more than 5000+ very soon.
Factsfirst & Steve,
Great points. Furthermore what has changed and what rules are not being followed, are the permit review time frame by the Corps. These reviews are not being done timely and in compliance with law due to Obama’s EPA.
Jason,
Regarding your comment “You’ve got a standard. You’ve had a standard! Accept it!”.
The coal industry has made considerable changes and improvements in the way it does business which involves AOC, fill reductions, re-forestation, monitoring, flood analysis, and more. Also the permit applications have grown in size and content. So the industry has upped their standards, so why not up yours?
FACTS FIRST??
“As for the suggestion that the rules haven’t been changed–nonsensense. The process has been turned on its head. The rules on the books call for the Corps to receive permits, make decisions on whether they are sufficient to be processed, ask EPA and other agencies for their views and then the Corps makes the decision. This is not the process being followed.”
FACT: This IS the process currently being followed. The list of 79 permits is the remainder of over 150 permits that the Corps presented to the Council of Environmental Quality (CEQ) for further review in March of 2009. Of that list an initial 48 permits were given high priority of which 42 were immediately released by the EPA without ANY review (much to my chagrin). The current list of 79 permits is the remainder of a list of 108 permits that, once again the Corps, presented for further review to the CEQ. So once again another 29 permits were released for various reasons including applicant withdrawal, after the fact violations, or permits were not needed to begin with. Releasing 50 percent of surface mining permits can hardly be characterized as a moratorium. And not a single RULE or LAW has changed yet.
“EPA is making the decisons up-front on whether a permit should be considered by the Corps in the first instance, how, when and under what circumstances–and still reserving the right to veto the Corps decison at the end of the day.”
FACT: The Corps (Huntington, Pittsburgh, Louisville, and Nashville Districts) presented these permits to the CEQ for review. The EPA did NOT ask for these permits or single them out. Yes, EPA does reserve the right to veto a permit which it sees fit to veto but this a lengthy, resource intensive process that is very rarely used. A few permits in West Virginia have been held up by the EPA but that is the PURPOSE of EPA…to prevent environmental degradation to the waters of the United States.
“Moreover, I understand that few if any of the companies with the 79 permits have been told by EPA exactly why their specific application cannot be processed and the Corps has apparently not been given specific reasons for specific permits. All they have seen is some generic letter that EPA sent the Corps saying none of the 79 pass muster and need more work and simply parroting generic reasons.”
FACT: 49 of the 79 permits that reside in Kentucky have been, and continue to be held (hence the backlog) until HUC-8 level Cumulative Impact Assessments are completed for 8 watersheds in Kentucky. When the CIAs are finalized, and the Corps is ready to move on those permits, EPA stands ready to review them per the Enhanced Coordination Process MOU signed in June. Parroting generic reasons does not invalidate those reasons in any way. However, there are generic impacts occurring on most sites these projects are proposed on such as buried streams, inadequate mitigation for loss of headwaters, loss of water quality on-site and downstream, lack of returning overburden to approximate original contour, lack of Section 404 (b)(1) guidelines analysis, lack of fill minimization, lack of cumulative effects and alternatives analysis. Yeah these projects need a lot of work. All of which does not require a single change in the rules or the law.
The Corps, OSM, and EPA are committed to dealing with this problem…I’ve been meeting with all three groups every week for the past 4 months to do just that. However, keep in mind, this is government, and 3 agencies with 3 different missions are going to take some time in agreeing on how to deal with this problem of permit backlog. Thats the nature of the beast. Meanwhile there are still plenty of active and open mines destroying plenty of streams, forests, and mountains.
“The coal industry has made considerable changes and improvements in the way it does business which involves AOC, fill reductions, re-forestation, monitoring, flood analysis, and more. Also the permit applications have grown in size and content. So the industry has upped their standards, so why not up yours?”
FACT: The industry has balked at every step of the way claiming job loss, high energy prices, and bankrupt companies. It seems they only meet the bar when pressured with new laws or threatened with lawsuits. Not exactly willing changes I would say.
And the claim that we shouldn’t change because other countries are lax in their environmental standards is akin to a rapist asking the judge to go easy on sentencing because he’s not as a bad as a murderer.
Casey,
You write:
Furthermore what has changed and what rules are not being followed, are the permit review time frame by the Corps. These reviews are not being done timely and in compliance with law due to Obama’s EPA.
Please provide us with the section of the U.S. Code or Code of Federal Regulations that spells out the time frame for these permit reviews … what is the required time frame and where is it in the regulations?
Ken.
PD Juan, I didn’t imply that the listed improvements were implemented willingly by industry. It would be naive to expect that considering the highly competitive nature of a commodity business like coal.
All of these improvements and permit delays HAVE caused job loss, higher electrical costs and bankrupt companies in CAPP. More coal production has shifted to western states and overseas than what would have otherwise. I’m not saying that the changes weren’t needed but the fears did become reality. The permit delays and unknown permitting requirements are just not acceptable and are (and will be) causing unnecessary job losses, higher utility costs, and bankruptcies.
Ken, perhaps a more qualified person could assist in answering your question if you indeed do not already know the answer. But I did find this which may or may not be accurate.
“Types of Permits. There are two types of Section 404 permits issued by the Corps of Engineers, individual and general permits. The applicability of each type is described below.
Individual Permits. Activities in wetlands that involve more than minimal impacts require an individual permits. Most individual permits are issued through a process (see diagram), which begins with a permit application to a Corps office. Once a permit application is submitted, the Corps must notify the applicant of any deficiencies in the application within 15 days. After the applicant has supplied all required information the Corps will determine if the application is complete. Within 15 days of that determination, the Corps is required to issue a public notice of the application for posting at governmental offices, facilities near the proposed project site, and other appropriate sites. In the public notice, the Corps requires that any comments be provided within a specified period of time, usually 30 days.”
Casey,
Not to overly hassle you here … but you wrote:
Furthermore what has changed and what rules are not being followed, are the permit review time frame by the Corps. These reviews are not being done timely and in compliance with law due to Obama’s EPA.
And now, you’re admitting that you have no idea if that statement is true?
I don’t believe that the Clean Water Act or its implementing regulations set up a specific time frame during which EPA and the Corps must review and make decisions on permits.
But you said there is … were you just making that up?
Ken.
Casey,
If you would read the Corps’ 404 regulations (http://edocket.access.gpo.gov/cfr_2009/julqtr/33cfr325.2.htm ), there is language that generally requires District Engineers to make permit decisions within 60 days:
District engineers will decide on all applications not later
than 60 days after receipt of a complete application …
But right after that, the rules say:
… unless (i)
precluded as a matter of law or procedures required by law (see below),
(ii) The case must be referred to higher authority (see Sec. 325.8
of this part),
(iii) The comment period is extended,
(iv) A timely submittal of information or comments is not received from the applicant,
(v) The processing is suspended at the request of the applicant, or
(vi) Information needed by the district engineer for a decision on the application cannot reasonably be obtained within the 60-day period.
Once the cause for preventing the decision from being made within the normal 60-day period has been satisfied or eliminated, the 60-day clock will start running again from where it was suspended. For example, if the comment period is extended by 30 days, the district engineer will, absent other
restraints, decide on the application within 90 days of receipt of a complete application. Certain laws (e.g., the Clean Water Act, the CZM Act, the National Environmental Policy Act, the National Historic Preservation Act, the Preservation of Historical and Archeological Data Act, the Endangered Species Act, the Wild and Scenic Rivers Act, and the Marine Protection, Research and Sanctuaries Act) require procedures such as state or other federal agency certifications, public hearings, environmental impact statements, consultation, special studies, and testing which may prevent district engineers from being able to decide certain applications within 60 days.
I don’t believe that the Corps has EVER followed 60-day requirement for IPs for mining operations — under any administration — because many of the “unless” issues listed there would apply … more information is needed from the applicant, consultation with state 401 certifying agencies or with EPA is needed, etc.
In addition, these regulations do not prohibit EPA from extending its review of permits beyond this 60-day period — and in fact, consultation with EPA is one of the reasons the corps can go beyond that time frame. That’s exactly what’s happening now, the corps and EPA are consulting about the 79 permits on the list, rather than EPA simply starting 404(c) actions to veto them all.
Ken.
Casey, in addition, that section 325.8 listed there says:
District
engineers will refer the following applications to the division engineer
for resolution:
(1) When a referral is required by a written agreement between the
head of a Federal agency and the Secretary of the Army;
(2) When the recommended decision is contrary to the written
position of the Governor of the state in which the work would be
performed;
(3) When there is substantial doubt as to authority, law,
regulations, or policies applicable to the proposed activity;
(4) When higher authority requests the application be forwarded for
decision; or
(5) When the district engineer is precluded by law or procedures
required by law from taking final action on the application (e.g.
section 9 of the Rivers and Harbors Act of 1899, or territorial sea
baseline changes).
Ken,
I think the referenced extensions are intended to be days or weeks not months and years.
Also, how can a complete application be provided when they don’t ask for anything specific.
Engineer,
Obviously,the agency knew how to put time limits on things … the fact that it didn’t say those extensions were intended for days or weeks means that it wasn’t setting a time limit on those extensions. The rules mean what they say.
And, as I understand it, the applications in question were considered complete because public notices were issued. You’re mixing two different sets of the regulations there.
The 60-day clock starts AFTER the application is determined to be complete. A separate set of the regulations outlines the process for determining completeness:
(2) Within 15 days of receipt of an application the district
engineer will either determine that the application is complete (see 33
CFR 325.1(d)(9) and issue a public notice as described in Sec. 325.3 of
this part, unless specifically exempted by other provisions of this
regulation or that it is incomplete and notify the applicant of the
information necessary for a complete application. The district engineer
will issue a supplemental, revised, or corrected public notice if in his
view there is a change in the application data that would affect the
public’s review of the proposal.
In addition, it’s important to note that EPA can invoke its 404(c) authority to veto permits just about any time it wants to do so … My guess is if the fine folks in the coal industry really thought they had a case over what EPA is doing being contrary to law, they would have already gone to court.
Casey and Ken,
33 CFR 325.2(a)(1) District Engineer determines whether application is complete or incomplete within 15 days of receipt.
33 CFR 325.2 (d) Timing of Processing of Applications
1. Within 15 days of reciept of application District Engineer issues Public Notice allowing public and agency review; if incomplete District Engineer notifies applicant what information is necessary to complete the application.
2. Comment period–30 days
3. District Engineers will decide on all applications not later than 60 days after recipt of a complete application unless, e.g., the comment period is extended, processing is suspended at the request of the applicant or information needed by the District Engineer cannot be reasonable be obtained within the 60-day period.
So those are the timeframes in the rules. That is not to say that a permit decision will be issued within 60 days of receipt of a complete application, but the rules set out the process, the roles of other agencies in providing comments on the application during the review, and the Corps role as being responsible for reaching a decision on the merits of any application (33 CFR 35.2(a)(3).
Now here is the process that is being applied to permits that were pending as of March 2009 and had already received completeness determinations by the Corp and had Public Notices issued for public comment:
1. EPA directs the Corp to provide EPA regions additional information on pending permits (even though these permits were available for review in many cases for almost a year or more).
2. EPA given 45 days to reviw the permits after it received the addditional information from the Corps.
3. EPA issues an initial list of permits (79) of permits it has concerns with.
4. A 14 day “public availability” period then follows.
5. After 14 day public availability period expires–EPA issues final list of permits it has concerns with (same 79) that must .
6. These permits are then subjected to “additional coordination” period for 60 days but the 60 days does not start to run until the Corps decides when.
7. EPA to meet with applicants during the 60 day period –but each permit apparently has its own 60 day perioddepeding on when the Corps decides to start it. EPA may extend this 60 day period for a permit by 15 more days.
8. If permit applicant agrees with EPA’s demands, Corps can issue permit.
9. If permit applicant and EPA do not reach agreement, then Corps can still issue permit but must provide EPA with 10 days notice in advance along with draft permit.
10. Within 10 days after the prior 10-days notice period expires, EPA can begin to initiate veto process under the rules or to advise Corp it will plans no further action.
You won’t find this process in the Corps rules, it was set forth in a memo from Lisa Jackson. It is not just the time frames and the process that has changed, so has the role of the agencies–the Corp cannot proceed without waiting for EPA during these extra steps. Under the rules on the books, the Corps makes the decision on when and how to proceed, and it does not have to wait if EPA or another agency fails to comment during the comment period.
So PlethoDon Juan, you are correct–not a single law or rule has changed—but those in charge have decided to change “rules of the game” –that’s the point. By the way, the last two points you responded to in your post were not from my prior one–just to be clear. But I will note from your discussion it appears that you are deeply involved in this process. If that is the case, considering the tone of your remarks (e.g.,”Meanwhile, there are still plenty of active and open mines destroying pleanty of streams, forests and mountains.”) I can understand why there is great skepticism and anxiety in the coalfields that the federal agencies will be approaching the matter with any objectivity.
FactsFirst,
I believe that the memo you mention was actually from both Lisa Jackson of EPA and Rock Salt of the Corps of Engineers. It’s available online here:
http://www.epa.gov/owow/wetlands/pdf/Final_MTM_Permit_Coordination_Procedures_6-11-09.pdf
It’s important to note that the authority for EPA to veto Corps permit decisions has been on the books for many years … in Section 404(c) of the Clean Water Act. That hasn’t changed.
The alternative to the procedure laid out in the MOU is for EPA to simply initiative 404(c) actions for each one of these permits. Under the law and the rules, that in and of itself stops the Corps from being able to issue a permit.
Instead, the Corps agreed to this MOU process.
And it’s important to note that EPA’s ability to step in and veto permits is absolutely not limited to the public comment period.
In fact, one 4th Circuit Court of Appeals decision on this very issue held that:
Ultimately, however, recognizing the EPA’s expertise and concentrated concern with environmental matters, Congress gave the final decision whether to permit a project to that agency. Its authority to veto to protect the environment is practically unadorned.
That case is here:
http://openjurist.org/12/f3d/1330/james-city-county-virginia-v-environmental-protection-agency
Ken.
Ken, sorry I was away but I think you and FactsFirst thoroughly discussed the permit review time frames. I’m sure a lawyer could add to the remarks as it is obviously complicated.
In the past lawsuits and the threat of lawsuits by environmental groups slowed and stopped the permit process and now it’s coming from Obama’s EPA. How bad this crisis becomes could largely be determined by what EPA decides on the Spruce permit. 50 comments!!
Ken,
You are correct, EPA does have authority to veto the permit and I did not intend to imply otherwise. Indeed, my point was only that there is a process laid out for EPA’s engagement, and that has been changed. But it would be incorrect to say that EPA’s authority prevents the Corps from issuing the permit–the veto can only be issued once the Corps has issued the permit over EPA’s objections. What you correctly suggest is that perhaps EPA did not want to face the prospect of issuing many vetoes and preferred to set up a process that avoids such a scenario since that would obviously demonstrate tension between the two agencies. Clearly, EPA did not want to be confronted with dozens of situations like it confronts now with the Arch permit it is threatening to veto. So my point is not that EPA does not have a role–and a powerful one at that through the veto authority. But it seems obvious that EPA thinks that role at the end of the process does not match up well with what it would like to accomplish here. No doubt the view has changed on what constitutes unacceptable impacts–and I would suggest it is not a change from simply the last administration–but a change from all prior administrations since these types of mines have been permitted under the laws for decades. So in the end, the MOU is, as you suggest, an “alternative” process to avoid the confrontation at the end of the process through a veto. The only point is that it is a new process–to some a good one ,to others not so good, to many, apparently from the commentary on your blog and elsewhere, one they don’t understand.
Thanks for passing on the court decision. I agree with your assessment that the decision suggests that EPA has wide latitude when it exercises its veto authority.
Facts First,
You’re really making me earn my pay today … Thanks for a very detailed discussion …
You wrote:
But it would be incorrect to say that EPA’s authority prevents the Corps from issuing the permit–the veto can only be issued once the Corps has issued the permit over EPA’s objections.
I don’t think that’s correct … my reading of 40 CFR 231.3(2) is that once the formal notice that EPA is invoking the 404(c) authority — as has happened with the Spruce Mine — the Corps may not issue the permit in question … here’s that language:
Where the Regional Administrator has notified the District
Engineer under paragraph (a)(1) of this section that he is considering
exercising section 404(c) authority with respect to a particular
disposal site for which a permit application is pending but for which no
permit has been issued, the District Engineer, in accordance with 33 CFR
325.8, shall not issue the permit until final action is taken under this
part.
Ken.
FactsFirst,
One last thing from me this evening … you’re absolutely right — this is a process that clearly folks here in the coalfields don’t understand.
I’d say the media, local politicians, the coal industry, and environmental groups all share the blame for that.
My to-do list for next week now has a new entry: Write something that makes some sense of the process here … process being important..
Ken.
Ken,
You are correct and thank you for pointing out the EPA 404(c) rules. I was thrown by the decision you posted earlier that begins with the statment that the Corps “granted” a permit under 404(b) and EPA “vetoed” the permit under 404(c). I didn’t see in the Corps rules I pulled off the web any specific mention of a veto in advance of issuance, but going back to them now it appears that the EPA rule you cite would fall under the Corp provison that says the District Engineer will refer the application to the Chief Engineer if the District Engineer is precluded by law or procedures from taking final action on the application. 325.8(c)(4).
Look forward to your future posts on the process. I would only add one other entity to your list of those who have fallen short on explaining the process –the federal agencies. Thanks again.
The science demonstrating the cumulative impacts (that are “unacceptable” under the CWA) has only in the last 3 or 4 years become readily available. The idea that all of a sudden the Obama administration has changed their view of what is unacceptable is risible. On the other hand, we’ve known for over 10 years that the valley fill process is a violation of the original intent of the SMCRA. The scientific information necessary to demonstrate that those impacts violate the CWA is the issue has only recently come to light. Ironic that calls for a flexible regulatory process are really calls for overlooking flagrant violations of the spirit and intent of environmental protection laws. Adaptive management requires collecting and utilizing information as it becomes available.
Jason, I’m no expert but is your statement “the valley fill process is a violation of the original intent of the SMCRA” accurate? A quick search found a statement from the Corps “Congress enacted the Surface Mining Control and Reclamation Act (SMCRA) with the intent of balancing the energy needs of the nation with environmental protection. SMCRA allows for surface coal mining and mountaintop mining/valley fills (MTM/VF) was identified as an acceptable type of mining.” This is more in line with my understanding.
Hi Casey this is of course what all the fuss is about. But the Environmental Impact Statement implementing section 501(b) of the SMCRA said “the program should directly protect the quantity and quality of the waters within and downstream of the areas mined and habitat characteristics, including streambeds and velocities, on which aquatic species are dependent”. Clearly valley fills do not protect these attributes of streams. The loophole in the regulations, to my understanding, lies in a section 1265 of SMCRA, which discusses the necessary drains for fills with wetland seeps or springs. I am not a lawyer and I would love for a lawyer to weigh in here as there is a longer history regarding this particular phrase of this section, and it’s my understanding that this particular phrase is the keystone of the legal decisions allowing valley fills of streams and wetlands. This is important because this particular phrase is at odds with 1) the rest of the language in the SMCRA 2) the streamside buffer zone rule as originally formulated before rewrites redefined it out of existence 3) the Clean Water Act as it defines “fill” and “waste” under sections 402 and 404 and 4) the Environmental Impact Statement implementing SMCRA.
Valleyfills are a biological holocaust. Attempts to justify their use for surface coal mining by appealing to “balancing environmental protection” or “state sovereignty” are inhuman.
If we had full knowledge of what was being destroyed by valley fills in terms of the biodiversity that relies on upland seeps springs bogs and wet rock faces then no doubt the Endangered Species Act would preclude this type of surface coal mining. Unfortunately we know next to nothing regarding the systematics and taxonomy of aquatic insects that utilize these habitats, and hundreds of square miles of these habitats have already been destroyed. In my personal research I can point to several dozen species that are known from only a single collection or collections at a single site or watershed. These areas are hotspots for biological diversity and they are being reduced to elk pastures that aren’t even decent habitat for white footed mice much less orchids, plethodontid salamanders, ethnobotanicals etc etc.
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