Regulatory Update

1. Regulatory Update Jason Bostic April 10, 2007 West Virginia Mine Drainage Task Force

2. Introduction • Legislative Report • Regulatory Issues • Section 404 Issues • Outlook

3. 2007 Legislative Session • Year of Stream Lists • Defense on Safety Issues

4. 2007 Legislative Session • Tier 2.5 Streams -Anti-Deg Program • Trout Streams -Water Quality Standards Program

5. 2007 Legislative Session • Legislative Rulemaking Review • Anti-deg Rule and WQS Rule become legislation

6. 2007 Legislative Session • Legislative Battle -Farmers, Forestry, Oil & Gas, Manufacturers, Coal vs. WV DEP, Enviros -Tier 2.5 list amended in Senate Judiciary Committee to remove all but 38 streams from the list -Senate Judiciary Committee poised to delete proposed expansion of the trout stream list

7. 2007 Legislative Session • Meanwhile in the House of Delegates… -House Judiciary Committee considers all of WV DEP’s rules at once -prematurely “bundled” the rules into one single piece of legislation -Entire rule package passed without amendment to House floor

8. 2007 Legislative Session • Poised for a floor fight -Assembled enough votes on the floor to amend rules to delete most of the Tier 2.5 streams and to remove the expansion of the trout stream list -House leadership refused to add the bill to the special calendar so that it could proceed to amendment stage

9. 2007 Legislative Session • Meanwhile in the Senate… -All work on WV DEP Rules halts in anticipation of receiving House version of legislation -Normally, Senate would accept House version and make amendments

10. 2007 Legislative Session • House refuses to place WV DEP rules bill on special calendar • Senate has stopped working on the rules • DEADLOCK

11. 2007 Legislative Session • House Judiciary Committee Chair tries to broker compromise • No fewer than six compromises offered by the “anti-deg coalition” • Each one would address trout streams and other rule issues as well as tier 2.5 streams • WV DEP and administration consistently rejected compromise offers • WV DEP wants 156 tier 2.5 streams • Anti-deg coalition cannot accept all 156 streams

12. 2007 Legislative Session • What Happened? -Legislature adjourned without completing action on any of the WV DEP rules -Mining & Reclamation -Explosives & Blasting • What Happens Now? -Still hopeful for a compromise -All roads lead to the lawyers…

13. 2007 Legislative Session • Why do we care if the rules failed to pass? -ALUMINUM • But… -EPA approved the change as though it was permanent

14. 2007 Legislative Session No firewall between agencies on a rulemaking binge and the regulated community: Industry & the Public

15. 2007 Legislative Session • Other Bills -Greenhouse Gas Reporting -Passed during the last hours of the session -Coal Association opposed the bill -Coal mining operations exempt

16. 2007 Legislative Session • Coal Slurry Study Resolution -Reaction to hysteria campaign conducted by the extremists -Requires WV DEP to conduct a study of groundwater movement of injected slurry into domestic wells -Department of health to analyze chemical constituents of slurry • All of this has been done before, but not enough for the Other Side

17. 2007 Legislative Session • Bills that failed to pass -UMWA on surface mine board -Prohibition on use of belt air -Prohibition on longwall mining -Requirement that WV DEP perform complete title search on all lands associated with mining permit -Various safety related bills

18. Regulatory Issues Cascade of Legal Actions

19. Regulatory Issues • Notices of Intent to Sue Selenium -Clean Water Act -SMCRA -Material Damage -Individual Permit Holders

20. Regulatory Issues • Notice of Intent to Sue • Motion to Reopen Bonding Case -Alleges the Special Reclamation should hold NPDES permits at bond forfeiture sites -Coal mining effluent limits -Alleges the SRF is Insolvent -Legislature failed to act on recommendation to establish a trust fund -But SRF has enough $$$ to last until 2016

21. Regulatory Issues • Final OSM Tennessee Bonding Rule -No Resolution of the AMD Policy • EPA Re-evaluation of Coal Mining Effluents Limits • Re-submission of Material Damage Definition

22. Regulatory Issues • New Programmatic Section 404 General Permits -Nationwide Permit 21 Surface Coal Mining Operations -Nationwide Permit 49 Remining Operations -Nationwide Permit 50 Underground Mining Operations

23. Section 404 Issues • Chambers Case -Challenge of Corps’ Issuance of IPs to Four Massey Energy Subsidiaries -Coal Association Intervenes to Protect Programmatic Issues • Extremists Have Found a New Whipping Boy: U.S. Army Corps of Engineers

24. Section 404 Issues • Alleged Pre-mining Stream Assessment Inadequate • Alleged Mitigation Unproven and Unable to Offset Stream Losses • Alleged Impacts Significant– EIS Required • Alleged Even if EIS was Conducted, Corps Could not Issue Permits

25. Section 404 Issues • “Waste Treatment Exclusion” -Stream Length Between Toe of Fill and Sediment Pond -Extremists Argue that Segment is Being Illegally Used for Waste Assimilation -Corps, EPA Have Policy– Length is Part of a Waste Treatment System and Exempt from Section 402 Requirements

26. Section 404 Issues • March 23, 2007 Decision • Judge Usurped the Corps’ Authority; Inserted His Own Beliefs for the Discretion of the Agency -Corps Failed to Adequately Measure Stream Functions -Mitigation Cannot Offset Losses -Corps NEPA Analysis Should Extend to Uplands Areas

27. Section 404 Issues • Judge Rescinded the Four Permits • Decision Cuts Deep- -On-site Mitigation -Off-site Mitigation • Sets the Bar Too High; Ties the Corps’ Hands • Judge Bought the Plaintiffs’ Line w/ Respect to Stream Functions -Endorsed the Theories of Out-of-State Environmental Philosophers Over Professional Corps’ Staff

28. Section 404 Issues • Plaintiffs Trying to Add Other Permits to the Case -They Have Always Viewed the Case as a Programmatic One • Subsequent Ruling, Judge Prohibited Further Placement of Material in Already-Started Fills -Cannot Raise the Elevation of the Deck of the Fill Even Though Corps’ Jurisdiction has Terminated

29. Section 404 Issues • What Happens Now? -Major Slow Down in Corps Permitting (?) -Trying Our Best to Keep Decision From Becoming Programmatic (not much success) -Awaiting a Ruling on Waste Treatment Exclusion -Richmond, Here We Come!

30. Something Wicked This Way Comes • FOIAs Filed by Same Groups -Louisville District IPs & NWPs -Pittsburgh District IPs & NWPs -Huntington District NWPs

31. Section 404 Issues • Rapanos -Hopeful that Corps & EPA Finalize Jurisdictional Guidance Soon -Prospect of Each and Every Section 404 Permit Being Thrown Under the Wheels of the Legal System will Encourage Industry to Seek a Jurisdictional Challenge

32. Outlook (Hint: Think Legal Bills) • Enough is Enough • WVCA Challenges • Selenium • Category A • AMD Policy • WV Stream Condition Index • Jurisdictional Waters

33. Outlook • Refuse to Give Up and Resort Only to the Legal System -Work Through All of This

34. Outlook • WV DEP Funding Issues -Division of Mining & Reclamation Needs $$$ (well, maybe they need $$$) -Review the OSM Required Staffing Levels -Work on Resolution that Satisfies Everyone

35. Outlook • Selenium (the scientifically-indefensible standard) -Find a Treatment Solution -Site-Specific Criteria -Change the WQS • All of this Would be Easier if We Weren’t Fighting in Court

36. Outlook • If Selenium is a Problem in West Virginia, Why is it Not a Problem Elsewhere? • Why is Selenium Only a Problem Related to Coal Mining? • Show Me the Impacts

37. Outlook • Global Climate Change -Supreme Court has Fallen Victim to Hysteria -Back to EPA -Time for a Response

38. Outlook • Don’t Give Up • Not Going to be Easy • Going to Cost Money • In the End, We Will Prevail -Appalachian Coal Far Too Important • But Will We Prevail Soon Enough?